“You can’t stop things like Bitcoin. It will be everywhere and the world will have to readjust. World governments will have to readjust” — John McAfee, Founder of McAfee
Now that you are here, two things are clear :
1. You have heard about Bitcoin, and people making money through it
2. You want to know how to be a part of this opportunity of a lifetime
Before I take you through the process, I would like to advice the following:
a) Cryptocurrencies like Bitcoin are highly volatile in price. So, Start small with the intent to understand the space before dreaming of making millions.
b) Take every “expert” advice on Bitcoin price speculation with a pinch of salt. Experts sitting on either side of the fence are trying to predict prices of Bitcoin. But you need too know that the space is changing rapidly and its hard to predict what will happen 1, 2 or 5 years down the line.
Now, let’s get to the 3 steps of buying your first Bitcoins.
Step #1: Choose an Exchange
Why do I need a specialized cryptocurrency exchange?
You need an exchange because, you are exchanging your ‘FIAT’ currency (govt. backed money like INR, USD, EUR etc) into cryptocurrency like Bitcoin, Ethereum. To start with, it’s preferable that you only buy Bitcoin or Ethereum at first.
In order to buy Bitcoin, you need a find a cryptocurrency exchange in your country which can enable purchase of Bitcoin with the FIAT available. These exchanges also let you change one cryptocurrency into other.
As a Bitcoin investor from India, I am listing down prominent Indian exchanges:
1) Koinex.in — It has look and feel of a trading platform. Easy for traders. Better exchange prices in comparison to other exchanges.
2) Unocoin.com — One of the first Indian exchanges. Good track record. Browser and mobile app functionality.
3) Zebpay.com — Also one of the earliest exchanges. Good track record. Mobile only platform.
Read later: Which exchange do I prefer and why?
For my global readers, with FIAT as USD or Euro, you may register at the following exchanges
1) Coinbase.com — A very trustworthy exchange valued at over $1Billion. Only USD transaction. US Based. Considered more expensive than others . Supports 26 countries. Not for Indian residents as of now.
2) CEX.IO — Close second and equally trustworthy. USD, EUR transactions enabled. UK based exchange, better pricing. Supports more than 30 countries.
Step #2: Authenticate your account
These above exchanges will need you to submit your KYC with them to link your bank account with the exchange account. This is mandatory and a norm for any exchange. DONT FORGET TO SET UP TWO FACTOR AUTHENTICATION.
Step #3: Buying the Bitcoin
Once you have created and authenticated your account, the exchange itself will create an internal bitcoin wallet for you. This is called an exchange wallet. Whenever you buy bitcoin, it will show up in this wallet.
You can now buy Bitcoin through credit card or wire transfer from your bank account. However credit card transaction has an additional charge which varies between 5–7% depending on the exchange.
Well Done! You are now a Bitcoin Investor..
So there you have it! You have successfully bought your first Bitcoin and it is there in your exchange wallet.
But we never trust the exchanges to keep our digital currencies safe for us. You need to secure them by using Desktop wallets and some other options.