A Beginner’s Guide to Buying Bitcoin
Before we begin, if you haven’t already, I recommend reading my previous article entitled: A Beginner’s Guide to Bitcoin. There you’ll find my answers to the most common introductory questions people new to bitcoin tend to have.
In 2015 Drake released his album “If You’re Reading This It’s Too Late.” Fortunately for you, if you’re reading this, it’s not too late to buy Bitcoin. However, because Bitcoin is still technically in its early stages of development, the task can seem a bit daunting. This article is my attempt to create a simple, comprehensive guide for buying and storing the digital currency.
What do companies like Uber, Amazon, Squarespace, and Google have in common? Simplicity. These tech giants specialize in simplifying the customer experience by cutting through the clutter and delivering what consumers want; whether it’s hailing a ride with the click of a button or creating a website in less than an hour, convenience is today’s consumer’s first priority.
Enter Coinbase. The San Francisco-based broker has established itself as one of the best, if not the premier, place for first-time buyers to enter the market. Their user-friendly interface and simple payment platform are appealing, and registering for an account and verifying your identity is strangely similar to opening up a bank account. That’s because, for all intents and purposes, Coinbase operates like a traditional financial institution. While those who have been in crypto for awhile lament this fact, I personally believe they play an important role in bridging the gap between the unregulated, decentralized world of Bitcoin while the highly-regulated world of banking.
Signing up is easy and only takes a few minutes. As a bonus, if you register using this link and spend $100, we both get an additional $10 worth of Bitcoin. After verifying your email you’ll be taken to the dashboard:
The dashboard conveniently shows the price chart for any given amount of time (1 hour, 1 day, 1 month, etc). As you can see from this chart alone, the price of Bitcoin has grown a whopping 56.47% since last month, with one major correction around November 12th. While it’s tempting to just play around with the charts and fantasize about having bought a year ago, I recommend moving onto the next step: adding a payment method.
Coinbase currently offers two payment methods: paying directly from your bank account or with your credit or debit card. Each has their pros and cons, primarily when it comes to fees and the speed of the transaction. Purchasing directly from your bank card has a lower fee of 1.49%. However, this can take up to 3–5 business days, meaning if you bought on a Monday morning, it might take until Friday before your bitcoin arrives. On the other hand, purchases made with a debit or credit card are instantaneous, meaning the coin you purchase will show up instantly in your digital wallet; the kicker is that these purchases are charged a fee of 3.99%. Ultimately, you’ll have to decide if you’re willing to pay extra to have your coins immediately or if you’re willing to wait a few days for them to be deposited to your account.
It’s important to mention here that you don’t have to purchase an entire coin. This is perhaps one of the most common misconceptions I come across. Just like 1 US dollar is made up off 100 cents, 1 Bitcoin is made up 100,000,000 satoshis (named after Satoshi Nakamoto; the anonymous founder of Bitcoin). The current price of Bitcoin is $10,474 (crazy). If you purchase $1,000 worth, then you would receive .09547451 BTC (1,000÷10,474). I tend to be a bit OCD, so I would probably pay $1,047 to receive exactly .1 BTC. The fractions and decimals can be a little odd at first, but you get used to it after a while.
Once you’ve officially purchased your first cryptocurrency (congrats), you’ll find it in your new digital wallet, which brings us to our next step: storing it.