Sep 17 (PR): So, you’ve done your research on cryptocurrencies, saw that bitcoin is the best cryptocurrency for you, read up on bitcoin and its value, and now, it’s time to make your first bitcoin purchase.
Now, you just have to figure out how to safely buy bitcoin. You don’t want to fall into a trap and end up giving your money to a scammer. This article aims to provide you with the needed information on how to safely buy bitcoin!
Buying With A Prepaid Card
Prepaid cards, also known as pay-as-you-go or daily cards, can be used in a similar manner to debit and credit cards in order to pay for products and services. Nevertheless, there are significant distinctions between prepaid cards and credit or debit cards that contribute to the former’s greater use for day-to-day activities than the latter.
In recent years, people have started to use prepaid card to buy BTC and it has gained popularity with several investors. Prepaid cards typically incur greater costs at cryptocurrency exchanges than other payment methods do; however, prepaid cards offer a number of significant benefits that other payment methods do not:
? In contrast to wire transfers, you can instantly purchase bitcoin using a prepaid card,
? It’s a more practical and open way to purchase cryptocurrencies,
? The risk of incurring debt is reduced because you can only use the money that is on your card,
? As a result, it’s a more safe approach to purchase BTC since you reveal less information about yourself,
? Even if your prepaid card is compromised, the money on it can only be used; your bank accounts are safe.
Buying With A Credit Card
When paying with a credit card, the buyer may be required to pay additional processing fees in addition to the transaction fees that the exchange has already paid. Credit card companies consider purchases made with bitcoin to be cash advances, and as a result, they increase interest rates and surcharges on cash advances.
Buying With PayPal
PayPal allows you to purchase bitcoin in two ways: either by transferring funds from your credit or debit card into your PayPal account or by using the balance you have in your account to fund the cryptocurrency purchase.
If you purchase bitcoin straight through PayPal, the company makes money off of the cryptocurrency spread, which is the difference between the price of bitcoin on the market and the price of bitcoin when converted to your native currency. Additionally, the business charges a transaction fee on each and every purchase. These charges are based on a percentage of the total purchase cost.
One of the disadvantages of purchasing cryptocurrencies via PayPal is that an investor is unable to transfer the cryptocurrency outside of the platform of the payment processor to an external crypto wallet or personal wallet. Additionally, only a small number of online traders and exchanges permit the use of the payment processor to purchase payment.
Steps Taken To Buy Bitcoin
1. Choose Between An Exchange Or Broker
Exchanges frequently have low fees, but they typically have more complicated user interfaces, a wide variety of transaction types, and sophisticated performance charts, which can be intimidating to novice cryptocurrency investors.
The ease of use, however, does not come without a cost, as the beginner-friendly options charge far more than it would cost to buy the same cryptocurrency using each site’s standard trading interface. You should probably strive to study enough to be able to use the conventional trading platforms before you make your first bitcoin purchase—or not too long after. This will help you save money.
Cryptocurrency brokers, who offer user-friendly interfaces and manage all essential interactions with exchanges on your behalf, greatly simplify the process of buying cryptocurrency. Some of them charge higher fees than exchanges do.
Others will claim to be “free,” but they will profit from you in one of two ways: either they will sell large brokerages or fund the details of what you and other traders are buying and selling, or they will fail to execute your trade at the best price on the market.
You must exercise caution when working with brokers despite the fact that there is no denying their usefulness because there may be restrictions on your ability to take your bitcoin holdings off the platform.
At first look, this might not seem like a major deal, but seasoned cryptocurrency investors usually keep their money in a digital wallet for increased security. Some users choose physical bitcoin wallets that are not linked to the internet as an extra measure of security.
2. Link Your Exchange To A Payment Option
You can connect to your prepaid card, debit card, or PayPal account. In order for this step to be completed, you might be asked to verify your identity by sending a picture of your ID card or a picture of yourself.
This is done to verify that the information you have submitted matches with your official documents.
3. Place An Order
Exchanges for cryptocurrencies have progressed to the point where they imitate the same level of features as their stock brokerage equivalents. Cryptocurrency exchanges typically provide a wide variety of order types and investment opportunities. Nearly every cryptocurrency exchange provides customers with the ability to place market, limit, and stop-loss orders, with the exception of a few.
4. Safely Store Your Bitcoin
Wallets can be used to store digital assets in a more secure manner, and Bitcoin and other cryptocurrencies are examples of such wallets. Keeping cryptocurrency outside of an exchange and in a personal wallet gives investors more control over the private key to their funds than using an exchange. Although an exchange wallet is available, using it for holding large amounts of cryptocurrency or for an extended period of time is not advised.
Alternative Ways To Buy Bitcoin
Bitcoin ATMs perform the same function as traditional in-person Bitcoin exchanges. People can buy bitcoin by putting cash into a machine and then using that money to buy bitcoin, which is then sent to online wallets that customers have. Recently, there has been a rise in demand for Bitcoin ATMs all across the world.
Bitcoin purchases made using an ATM incur not one but two fees: the first is a purchase cost, and the second is a conversion fee for turning local cash into bitcoin. Both of these costs are relatively high in comparison to those of other available choices.
There are certain peer-to-peer (P2P) exchange systems that offer users a more direct connection with one another.
P2P exchanges do not provide users with the same level of anonymity as decentralized exchanges do, but they do give consumers the chance to compare prices and find the best bargain possible. Many of these exchanges also include rating systems, giving users the ability to assess possible business partners before engaging in any kind of transaction with them.
There are several ways you can safely purchase bitcoin, be it using the more traditional methods like prepaid cards and PayPal, or using alternative modes such as bitcoin ATMs. Some people might have a false narrative about buying bitcoin and might see it as a shady business, but if you choose the right methods, then you have nothing to worry about!
Make sure to follow the instructions carefully so you don’t get stuck on a step and can finalize the process sooner!