Buying bitcoin or any cryptocurrency can seem incredibly complicated at first but don’t get discouraged. After you learn the basics it all becomes quite intuitive and makes a lot more sense. Just like when you were learning how to drive a car and it seemed nearly impossible and so much was going on, soon enough you’ll get the hang of it. This quick guide will show you how to get started. If you want to read more there are sections on this website that go into detail about each step.
Step 1: Signing Up for an Exchange
First you will need a place to buy cryptocurrency. Most people start off with a site like Coinbase. There are a lot of exchanges to choose from but not all of them let you deposit money from your bank to buy cryptocurrency. Some exchanges only let you send cryptocurrencies from your wallet (we will describe wallets later) to the exchange in order to trade them for other cryptocurrencies. Coinbase is the starting point for this. You can buy bitcoin, ethereum, litecoin, or bitcoin cash with your money and either keep them or send them somewhere else to trade with other cryptocurrencies.
Step 2: Select Your Payment Method
During the registration you will be asked for your banking info or credit card number in order to fund your account. This account will be used whenever you make a purchase. If using Coinbase, they will make two small transactions on your account and you will need to enter these transactions into a form provided on their website to prove it is your bank account. These charges will be reversed and they are only for about a dollar each.
Step 3: Verify Your Account
You will also be asked to confirm your identity before you can buy or sell any cryptocurrency. This is required as per regulations for a financial company. This is usually in the form of either a driver’s license, photo ID, or passport
Step 4: Buy Bitcoin or Other Cryptocurrency
Once your account is set up and verified you are off to the races. There are usually limits for new users on how much they can purchase per week. These limits can be raised by more verifications or simply by making purchases over time (The same goes for withdrawals).
* If you plan on keeping the cryptocurrency for a long time *
Step 5.1: Download a Wallet
If you are going to transfer your cryptocurrency to another exchange to trade it you can skip this step. Also, this step is optional but recommended. Any cryptocurrency that sits on an exchange is vulnerable to any security breaches or account suspensions. The more control you have over your cryptocurrency the better. Keep in mind there are withdrawal fees that the exchange will charge to take it off the exchange and into your own wallet. Transfering the cryptocurrency to your wallet will take a couple minutes of reading but it’s definitely worth it.
* If you plan on trading cryptocurrencies *
Step 5.2: Transfer Cryptocurrency to Another Exchange
If you plan on trading cryptocurrencies you will need to sign up for another exchange that has trading pairs that allows you to trade one cryptocurrency for another. Again, there are multiple exchanges to choose from and it will depend on where you are located. One popular exchange with good fees is Binance. It is also common to initially buy either Ethereum or Litecoin instead of bitcoin because of the high fees and slower transaction speed of bitcoin. Litecoin is not used as a base trading pair on Binance, however, so Ethereum or BitcoinCash are the best options here. In order to transfer the cryptocurrency you will need to get the wallet address on Binance and enter that into the address to send it to in Coinbase.
Step 6: Trade Cryptocurrencies
And now the fun part… trading. This is completely up to you. If you are using Binance, consider updating your settings to use Binance Coin to pay fees and your fees will be cut in half (make sure you buy some Binance Coin or it won’t work).
Step 7: Withdrawing Profits
Hopefully you’ll make profit on your trades or simply by holding and you’ll eventually want to cash out. A common practice is to make some profit and take out your initial investment and keep the rest to play with. Eliminating the mental stress of losing money and simply playing with extra money is a good feeling compared to playing with your hard earned money. Unless the exchange that you are trading on has withdrawals to fiat (ie. money to your bank account) you will need to transfer the cryptocurreny back to your main exchange and then withdraw from there. Keep in mind there will be withdrawal/transfer fees on the trading exchange and then another fee to withdraw to your bank account.