Bitcoin beginners guide - How to buy your first bitcoin
Buy Your First Bitcoin in Less Than 30 Minutes
Here's a statistic to make you cry.
One hundred dollars invested in Bitcoin in 2011 would be worth $5.7 million in 2018.
If you had known how that particular currency was going to take off - well, let's just it would have been a heck of a retirement plan. With Bitcoin now running at almost $15,000 (at time of writing), it might be tempting to think the party is over. Maybe, but probably not.
The good news is you can buy tiny fractions of a single coin, which means almost anyone with a smartphone, government identification, and credit or debit card with a little extra cash on it can get a piece of the action.
In fact, by following the steps below, you could be a proud Bitcoin owner 30 minutes from now, give or take a few minutes.
BORING BUT CRITICAL DISCLAIMER
By the way, despite the fact that early Bitcoin investors are now millionaires many times over, please don't play with what you can't afford to lose, like this week's grocery money, your retirement fund, or the kids' college education. Likewise, we beg you also refrain from selling a kidney or liver on the black market for trading funds. Seriously. That's a terrible idea. With that disclaimer out of the way, who wants to own Bitcoin?
Let's Get Started
One thing should be clear. The Federal Deposit Insurance Corporation (FDIC) nor any government for that matter do not back cryptocurrencies.
This means if you get scammed or do something stupid out there, your money is gone. No amount of crying or pitching a fit will bring it back. The reason we mention that is to say this. Don't choose a brand new exchange or one no one has ever heard of when buying a digital currency like Bitcoin. Coinbase has stood the test of time in this fledgeling industry, supports trading in the significant cryptocurrencies, and has as good a reputation as any. A caveat: Coinbase, like any other exchange, has been known to go offline when the action gets heavy. Sorry. That's just the nature of the beast.
(STEP #1) OPEN AN ACCOUNT
The first thing to do is either download and install the Coinbase app on a smartphone or mobile device or surf over to Coinbase.com and create an account.
At some point, you'll be asked to agree to the terms. We've already given you the short version - you can lose your entire investment, but here's hoping you don't. The next thing you should see is a screen (hope you like the colour blue) with a chart that shows recent and current prices.
The option to create an account is at the bottom of the screen. Fill in the usual information - first and last name, email address, and create a password - and wait for the confirmation email to hit your mailbox. Select the state you live in, and you'll be brought to a screen with colour. You're making progress!
(STEP #2) VERIFICATION AND PAYMENT METHOD
The next step is to activate a higher level of security by entering your phone number. You'll receive a verification code by text. Enter it.
Now it's time to do some serious thinking.
Coinbase and every other cryptocurrency exchange hope you'll choose to link your bank account to your Coinbase account. This can come in handy if you plan to make large purchases, but if you're just getting your feet wet, it's no crime to choose to use a credit/debit for small trades only. You will need to supply standard card info at this point. If you go the bank route, there may be a delay of several days while the verification process plays out.
THOSE DIRTY ROTTEN FEES
The following won't count towards your goal of buying Bitcoin in 30 minutes or less but the following is information you need to have.
You didn't think cryptocurrency exchanges operated as a public service, did you?
Just like you pay all kinds of broker and exchange fees in the stock and Forex market, so you will do the same to buy or sell Bitcoin or any other cryptocurrency.
Here are the sorts of costs you can expect to run into:
Transaction Fees: Any time you buy or sell Bitcoin in an amount below $80, you are going to pay a flat $2.99 fee. Above that will cost 3.99% of the transaction amount. These fees are applied differently depending on whether you buy or sell.
Bank Fees: Your bank might choose to classify buying or selling Bitcoin as a foreign transaction and slap on up to a 3% fee.
Miscellaneous Fees: If any other fees might apply to a particular transaction, Coinbase will let you know about them before you place the order. It behoves you not to go flying through the order screen until you see exactly what fees apply.
(STEP #3) BUY, BUY, BUY!
At this point, if you're only planning to make a small initial purchase, you should be ready to click that BUY button. Make sure to choose the cryptocurrency you want to purchase and in what quantity. Your bank might get suspicious of the unusual activity and call you, but there should be no issue after that. There you have it. You're the proud owner of a brand new baby bitcoin (or some portion thereof). Good luck and may the market zoom ever upward.
Smart readers will notice we mentioned having some form of government identification ready to go. You might not need it, but if you choose a different exchange than Coinbase and/or want to trade a different cryptocurrency than Bitcoin, you might be asked to fax or email a copy of that document at some point in the process. Sometimes a request to withdraw money from your digital account triggers a request for further identification. Unless you're living under an assumed identity or are a fugitive from the law, this shouldn't be a big deal.