By Hannah Parker
Established in 2009 by Satoshi Nakamoto, the presumed pseudonymous person or persons who developed the first Bitcoin, Bitcoin became the first cryptocurrency in the world, leading to the creation of many other cryptocurrencies that exist to date. What exactly is Bitcoin? Well, Bitcoin is a digital currency that operates free of central control or third parties, including governments or the oversight of banks and central control. Digital currency depends on peer-to-peer software and cryptography to allow transactions to be anonymous, secure, and “trustless,” which means you don’t need to know anything about a person to safely transact with them.
Is Bitcoin valuable?
Yes, Bitcoin is quite valuable for several reasons. Apart from its functioning as and becoming a popular medium of exchange, Bitcoin is valuable as it derives its value in the same way as traditional currencies and fulfils the six characteristics of money: durability, portability, divisibility, fungibility, scarcity, and acceptability. Moreover, Bitcoin is valuable as it is the most widely held cryptocurrency in the crypto market. Although its value can be quite volatile due to the hourly fluctuation of crypto, in comparison to other cryptocurrencies, Bitcoin has proven to be sustainable through its record of increasing value over time.
Before purchasing cryptocurrency, interested investors must conduct in-depth research to ensure that they are well aware of the value, benefits, and risks of investing in crypto, not just Bitcoin. There are many complex and often overwhelming amounts of cryptocurrency information. However, trusted crypto news sources and websites such as this Bitsoft 360 are great resources for beginners and those advanced in crypto for current news, market analysis, and guides on different cryptocurrencies.
Prior to investing in Bitcoin
Before investing funds and purchasing Bitcoin, there are a few factors one needs to take into consideration:
Choose an exchange platform.
Crypto can only be bought through an exchange. A crypto exchange platform allows for the buying and selling of cryptocurrencies. Moreover, the platform also offers trading services and price discovery through trading activity and crypto storage. It is imperative to choose the right crypto exchange platform. This includes determining important factors that will benefit you, most importantly the overall reputation of the exchange platform, security, and fees.
It is important to determine just how secure your crypto exchange platform is. Compared to traditional currencies, digital currency is not backed by a government, bank or central authority. This means that should your account be compromised or the platform you decided to store your coins gets hacked, you risk losing your digital investment. It is thus important to ensure that you choose a long-standing and reputable platform with heightened security measures that have evidence of working. Reading reviews from other users during your research will be a good indicator of a platform’s security.
Should you decide to keep your crypto with an exchange platform, ensure that the platform uses offline, cold storage and has rigid safety measures against theft. As an extra security measure, some exchange platforms offer independent insurance policies to protect investors from potential hacking.
It is imperative for all investors to know what fees they will be charged on whichever crypto exchange platform they opt for, including what determines the value of the fees charged. Exchange fees vary greatly and are based on factors including price volatility, the number of transactions, spread, or margin on top of the market price, and base fees on a flat rate or percentage of the total purchase, which all vary due to location, payment method, and other factors. Security is another factor. Should an exchange have intense protection and overall heightened security measures, the fees might be slightly higher, which is worth it.
Is a crypto exchange the same thing as a crypto wallet?
No, a crypto exchange and a crypto wallet are not the same and do not have the same functions. A crypto wallet is a program that essentially allows an investor to store all their cryptocurrency. On the other hand, a cryptocurrency exchange refers to a website or service where one can sell or buy digital currency or convert fiat currency (money backed by a country’s government instead of a physical commodity or financial instrument.) into digital currency.
Top 3 exchange platforms to buy Bitcoin.
1. Coinbase –
Coinbase is a great crypto exchange platform for beginners, especially for purchasing Bitcoin. The platform is beginner-friendly as it does not have a complex interface but one that is clean, straightforward, and easy to understand. Operating in more than 100+ countries apart from the US, the site allows you to open an account with ease and will require verification with ACH (Automated Clearing House, a U.S. financial network used for electronic payments and money transfers, also known as direct payments) at no cost.
Once money has been deposited and credited to your Coinbase account, you can proceed to buy Bitcoin at a rate of 1.49%. Furthermore, Coinbase charges even more when purchasing Bitcoin with a debit/credit card. The commission can amount to approximately 4% more; however, this option allows instant buying of Bitcoin.
Coinbase is not just a great exchange platform but a secure option to store your Bitcoin tokens. What makes it secure? Well, the site requires all users to pass a two-step verification process in order to log in. Moreover, 98% of all client funds are kept in cold wallets, and attempting to log in from a new device or IP address requires an extra verification step.
2. eToro –
This platform is considered the best place to buy Bitcoin in 2022. Launched in 2007, eToro is a popular investment platform with 27 million clients on its server. Bitcoin can be purchased on this site with low fees, and one can store their BTC tokens in the eToro money crypto wallet.
The platform is regulated by the SEC, FCA, ASIC, and CySEC and registered with FINRA. You can easily open an account in less than five minutes and deposit US dollars with a debit/credit card, ACH, or a bank wire. You can buy Bitcoin with a bank account, e-wallet, or debit card. This variety makes eToro inexpensive in comparison to other platforms. Once a deposit is made, you can buy cryptocurrency spread-only, which is the difference between the bid and ask price. Moreover, this platform is not just limited to cryptocurrencies but further allows users to invest in the best Bitcoin ETFs on the market.
3. Binance –
Binance is another popular crypto exchange platform. Although one of the newest” in the industry, as it was launched in 2017, the platform currently has more than 100 million people subscribed and facilitates billions of dollars worth of daily trading volume. Binance is one of the slightly pricey crypto exchange platforms. Bitcoin can be bought at 4.5% of the transaction amount and supports debit and credit card deposits.
I have chosen an exchange platform. What now?
Fund your account
After choosing and registering with your desired crypto exchange platform, transfer money into your account and convert that money (whichever currency you are using) into Bitcoin tokens. Most exchanges allow for the connection of bank account and debit/credit details with an exchange, making it easier to transfer and convert money into Bitcoins or desired cryptocurrency. Note that fees may vary depending on the method used to fund an account, bank transfers usually cost less than card options.
Once a payment option has been chosen and connected with the exchange account, you can purchase Bitcoin. However, the purchase process differs depending on the crypto exchange platform chosen. Using an exchange platform like Coinbase or PayPal is as simple as entering the amount you want to trade for Bitcoin in dollars and buying at the current rate (after paying for any surplus fees). Bitcoin is purchased at a fractional share of a coin. The value and price are constantly fluctuating. However, Bitcoin’s price has grown in strength over the years and is relatively steady compared to other cryptocurrencies.
As any financial investment comes with risks and opportunities, so does investing in cryptocurrency. Bitcoin and cryptocurrency overall has proven to be sustainable and expansive, this is evident due to the ongoing growth in popularity of crypto, especially Bitcoin and Ethereum. With that said, it is also important to note that crypto assets are highly volatile and unregulated. However, crypto is taking the world by storm and is infiltrating various markets and industries. Looking at how the world is ever-evolving, making an investment could be hugely beneficial. Place money on the side that you are “willing to lose,’’ invest in crypto, and trade.
SOURCE Vestigo Finance