In recent months the meteoric price rise of cryptocurrencies such as Bitcoin, Litecoin and Ethereum has led to more and more readers approaching Finance Magnates staff with requests for help getting into this market.
The number of possibilities, different opinions and new technologies can seem overwhelming and prevents many from even getting started. To provide you with an easy and simple solution we created this guide for buying your first Bitcoin.
Find an exchange
The first step is to find an exchange that will accept your fiat currency (USD/EUR/GBP…) with a transfer method that is available to you. There are a great deal of such exchanges, some regulated some not, all over the world, and it is highly advised that you check for yourself which one you trust with your money. Two popular options that you can look at are localbitcoins.com and Coinbase.
Coinbase is a San Francisco based company licensed by New York’s Department of Financial Services, to offer Bitcoin, Ethereum and Litecoin. It has over 8 million clients and serves over 30 countries including the US, Canada, Australia, Singapore and much of Europe. It accepts PayPal, bank transfers and credit/debit cards. For a special deal for Finance Magnates readers click here.
If you are not willing or able to send a bank transfer or credit card payments you still have the option of buying in person with cash using localbitcoins.com. This person-to-person service supports all currencies and many payment methods such as cash, Neteller, Webmoney, Skrill, Moneybookers, PayPal, Western Union and more. For a special deal for Finance Magnates readers click here.
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Get a wallet
Exchanges are not considered a safe place to store your cryptocurrency long term, for that you will need a ‘wallet’. This means a piece of software, a hardware device or an online service which stores your private keys to your crypto funds.
There are a lot of options for cryptocurrency wallets and many have proven in the past to be insecure or fraudulent, therefore it is best to keep an eye on the wallet provider you use and always follow best practices for securing your wallet. These include picking a strong password that you will remember, enabling multi-signature, encrypting the wallet and routinely backing it up on several locations such as on USB keys.
KeepKey works with the wallet software on your computer by taking over the management of private key generation, private key storage, and transaction signing. It supports Bitcoin, Ethereum, Litecoin, Dogecoin, Dash and Namecoin.
TREZOR was created by the Prague-based firm SatoshiLabs, known for its Slush mining pool. It supports Bitcoin, Litecoin, Ethereum, Dash, Ethereum Classic and ZCash.