How to Buy Bitcoin Online
The process of buying Bitcoin can definitely be confusing if you’re new to cryptocurrency.
With this guide, you’ll learn how to buy Bitcoin using some of the most popular Bitcoin buying options and exchanges, store your Bitcoin safely, track your Bitcoin buying, analyze the market, and use your Bitcoin if and when the time comes.
How To Choose a Bitcoin Wallet
In order to store your Bitcoin, you’ll need what’s known as a Bitcoin “wallet”.
Since Bitcoin is virtual (doesn’t physically exist), a Bitcoin wallet is virtual as well.
There are tons of different Bitcoin wallets that you can choose from.
The main types of Bitcoin wallets include desktop wallets, mobile wallets, web wallets, hardware wallets, and paper wallets.
* When creating any type of Bitcoin wallet, make sure that you make a note of your private key (if the wallet provides one) and any other crucial information, such as passwords and recovery phrases! Most wallets DO NOT offer “Forget your password?” or other similar recovery options. With great power comes great responsibility.
As the name suggests, desktop wallets are software for your desktop or laptop that allow you to store your Bitcoin. Desktop wallets can be a convenient way to store your Bitcoin and are considered safer than mobile and web wallets. However, the desktop wallet is as secure as your desktop – if your desktop is infected with malware, it’s possible that malicious actors can compromise your funds.
Electrum is one of the most popular desktop wallets for Bitcoin because it is easy to use yet offers advanced options for power users.
(For example, instead of selling Bitcoin for dollars or other fiat currencies, you could sell it for cryptocurrencies like Walton).
Mobile wallets are great since you can access your Bitcoin on the go, or whenever you have your phone. However, again, your funds are only as safe as your device. Though you can recover your Bitcoin if you lose your phone using your private key and/or recovery phrase, it’s recommended that you only carry small amounts of Bitcoin on a mobile wallet at any given time.
Breadwallet is a mobile Bitcoin wallet known for its simplicity.
Web wallets are Bitcoin wallets that allow you to access your Bitcoin from a website. While this can be more convenient than storing your Bitcoin on a desktop, mobile, hardware, or paper wallet, web wallets are probably the least secure type of Bitcoin wallet and should only be used if you don’t have access to another type of wallet or if you are going to make a transaction quickly.
Examples of web wallets include web wallets, such as GreenAddress, which also offers mobile apps and a Chrome extension.
Exchange wallets would also fall under the category of Bitcoin web wallets. For example, users could store their Bitcoin on Coinbase or another exchange. However, with exchanges, you are usually not in control of your private key. If the exchange gets compromised, such as in the case of Mt. Gox, you cannot restore your Bitcoin by entering your private key into another wallet that interfaces with the Bitcoin network.
Hardware wallets are one of the most secure ways to store your Bitcoin (along with paper wallets) and should be considered by those who hold significant amounts of Bitcoin. With a hardware wallet, your private key never leaves the device, making it much more secure than other options.
The Ledger Nano S is a popular Bitcoin hardware wallet.
Paper wallets are pieces of paper that have your private key. Paper wallets are considered to be the most secure type of Bitcoin wallet but are more suitable for long-term storage.
Bitaddress is a popular option for creating paper wallets. Save the page as an HTML file to your computer and move that HTML file to an offline computer via USB to generate the paper wallet and print it. Be sure to make copies of the paper wallet and store them in safe locations!
See Bitcoin.org’s list of Bitcoin wallets for more Bitcoin wallets (list not exhaustive). Be sure to research reviews for any wallet that you decide to use so that you don’t get scammed and lose your Bitcoin.
Where to Buy Bitcoin Online
You can buy Bitcoin through tons of avenues, but we’ll cover the most popular ones.
Buying Bitcoin on Coinbase
Coinbase is many users’ preferred option for buying Bitcoin. Coinbase is a San Francisco-based cryptocurrency exchange that is known for its ease of use. The exchange also offers a handy mobile app.
After signing up, go to the Buy/Sell page to add payment options like bank account or credit card, and purchase Bitcoin. Note that to purchase higher amounts of Bitcoin, you will need to provide more ID for verification purposes. This is the case on most exchanges.
Buying Bitcoin on Binance
Binance is another popular place to buy Bitcoin. However, Binance is cryptocurrency only – that is, you can only purchase Bitcoin with other cryptocurrencies, such as Ethereum, Litecoin, and so on.
Binance is known for its huge selection of cryptocurrencies and is a user favorite when it comes to altcoin (cryptocurrencies that aren’t Bitcoin) exchanges.
The interface isn’t as simple as Coinbase’s and is more geared towards users that are familiar with trading platforms. Also, technically you can’t buy Bitcoin directly on Binance but you can sell other cryptos for Bitcoin.