You need a Bitcoin wallet before you buy coins.
A Bitcoin wallet closely resembles your bank account in that it allows you to send, receive and store bitcoins. All wallets are classified as either hot or cold.
There are several types of wallets and they vary in features and devices on which they can be used. It is advisable to know these categories so that you always choose one that suits you. Your wallet does not STORE your Bitcoins. It holds a secret piece of data called a private key or seed, which is used to sign transactions and provide mathematical proof that they have come from the owner of the wallet.
Provided on the cloud by third party wallet service companies and only accessible through an internet connection – like Coinbase and Circle.
A wallet that is connected to the internet or is online is said to be ‘hot’ and suitable for frequently accessed funds in small amounts.
‘Cold’ means offline or disconnected from the internet and is considered the most secure, thus, recommended for storing large amounts of bitcoins.
Designed to be downloaded and used on laptops and personal computers. Easy access and use even when not connected to the internet.
Tailored for your Smartphone, convenient and usually has enhanced security features. QR code capability enables instant payments.
Paper wallets are physical and securely hold bitcoins in cold storage. Can be stored in a safety deposit box along with your other valuables.
Portable physical vaults that are incredibly small devices using top grade cryptography. Secure for storing, sending and receiving transactions online.
BTC Client Wallet
Original bitcoin wallets used by first adopters. Computers installed with these wallets form part of the core network and have access to all transactions on the blockchain.
Special bitcoin wallet requiring more than one private key to sign transactions. Most setups involve three parties – the sender, recipient, and escrow agent.
Looks like an ordinary ATM but it allows users to buy and sell Bitcoins for cash. More expensive than online transactions, but easy to use and requires no bank account to use.
What is a BTM?
Bitcoin ATMs aren’t really ATMs but rather are physical centers or kiosks where you can buy Bitcoins with fiat money – Bitcoin Teller Machines (BTMs). BTMs are meant to offer access to Bitcoins to those who are not a part of the banking system, as well as those less tech-savvy.
There is an estimated 3500+ Bitcoin ATMs worldwide, an exponential rise from just January 2016 when the number hovered around 500.
What is required to use BTMs?
Some machines support two-way transactions between Bitcoin and currency, allowing you to buy as well as sell Bitcoin. Most support only currency-to-Bitcoin transactions that allow you to buy Bitcoin with cash money.
Very few BTMs allow buying Bitcoins without any ID at all. A phone number of some other ID detail depending on the manufacturer will be required, as well as some other personal data to meet compliance requirements and to keep Bitcoins secure. Some BTMs might require you to use the BTM scanner to provide a driver’s license, passport, or other commonly used types of ID.
It looks very much like an ordinary ATM. You may be required to key in your phone number, and after verification using your “One Time Password” (OTP) you can buy Bitcoin.
How do you use a BTM?
Once you’ve registered and your identity is verified, you can buy some Bitcoins. Enter the dollar amount you wish to spend, and slide in the currency notes one by one into the machine’s deposit slot. Some machines allow you to send the Bitcoins purchased to your own wallet and will allow you to scan a QR code representing your wallet address using the BTM scanner.
Once you deposit the money, the machine will either print an offline paper wallet for you – or send the Bitcoins to your own wallet. Some machines offer the choice to receive your Bitcoin by email, and a QR code is sent to your email. This method of receipt is not recommended unless you have encrypted email.
What happens after using a BTM?
Once you’ve purchased Bitcoins, you can use them or hold them – move them to a different wallet or send them to someone else. You own the Bitcoins as long as you securely store them.
Why is ID required to use BTMs?
The BTMs save Know Your Customer (KYC)/Anti Money Laundering (AMC) details, scrutinize them and report suspicious activity to appropriate regulatory authorities. After obtaining these details, the machines allow you to buy Bitcoin. The operators buy Bitcoin from exchanges and allow BTM users to withdraw Bitcoin from their wallets. One can buy as much Bitcoin as the operator holds.
In most locations operating a BTM isn’t easy. BTM operators have to meet stringent regulatory requirements. For example, in the U.S. operators must register under the federal financial crimes enforcement network (FinCen) and obtain a state-specific money transmitter license.
Bitcoin Gift Cards
Paying for Bitcoin can be confusing for some buyers, as they take time and are slightly complicated. Buying Bitcoin vouchers or gift cards disconnects the “payment” part from the “obtain bitcoin” part and can make the process easier for less tech-savvy buyers or those buying cryptocurrency as a gift for someone.
What are Gift Vouchers?
Bitcoin gift vouchers or gift cards are an easy way to give bitcoins as a gift. Recipients can easily redeem the gift card against bitcoins at any time based on the exchange rate at that time. So, if you buy a gift card with Bitcoin rate at say, $6,500 – and it is redeemed when the rate is say, $8,200 – the gain is realized by the recipient.
How does exchange rate affect gift cards?
Bitcoin gift card or voucher recipients can easily redeem the gift card against bitcoins at any time based on the exchange rate at that time. So, if you buy a $200 USD gift card when the Bitcoin rate is $8,500 – and it is redeemed at a rate of $7,600 – the recipient receives more bitcoins than if it were redeemed immediately after receipt.
Bitcoin’s volatile exchange rate can be controlled because the recipient can redeem the voucher whenever they see fit, and may profit considerably by waiting for a drop in price before redeeming.
How Do You Buy Bitcoin Gift Cards?
The first step is to buy Bitcoin. Purchasing cryptocurrency on Bitit is very simple, and ideal for newbies not wanting to worry about more advanced exchanges that can be confusing to newcomers. Buying Bitcoin is as simple as clicking the “Buy” button.
BitIt accepts a long list of payment methods not found on other cryptocurrency exchanges. Credit cards, e-wallets, wire transfers, or even cash is accepted, as well as specific methods such as Maestro, Mastercard, Visa, TrustPay, CashLib, and Neosurf.
What are BitIt Gift Cards?
If you want to give cryptocurrency as a gift, you can buy a BitIt Gift Card. BitIt has several partners that sell the gift cards, including The Good Gift, Avangarde, and Ma Carte Cadeau. Gift cards are received via email or snail mail, depending on your preference. Once you have the gift card, it can be redeemed on BitIt.io for the cryptocurrency of the recipient’s choice. Options include BTC, ETH, LTC, XRP, ETC, BCH, DASH, and CVC.
Same as buying crypto locally, cryptocurrency will be delivered within minutes after recipient redeems a gift card.
As gift card support expands, BitIt will become even more useful, making it simple to buy your favorite cryptocurrency with cash.
More About BTC Gift Cards
When looking to “gift” someone an actual Bitcoin Gift Card, it is important to realize that most platforms allow you to BUY gift cards using Bitcoin, but they do not allow you to SELL or REDEEM the gift cards for Bitcoins.
So, if your intent is for the recipient to actually own Bitcoin – you must carefully read the platform instructions. The only platform we’ve found that allows one to buy a Bitcoin gift card, send it to someone, and that recipient can redeem the gift card for actual Bitcoin…is BitIt.
We also like the fact that BitIt allows you to add wallet addresses for different cryptocurrencies that are off-site. This means none of your funds are stored with BitIt. Upon purchase, your crypto-coins will be sent to the addresses you specify and there is less chance of hacking or other problems associated with hot wallets as provided by other exchanges. BitIt does more than the typical platform by also offering some features more common to a marketplace. While the rates are higher, if you are a beginner to cryptocurrency, it may be worth a few dollars more for the convenience and ease of use.
Trading on Exchanges
Exchanges provide widely varying degrees of security, privacy, and control over cryptocurrency funds and personal data. Perform your own due diligence and choose a wallet where your bitcoin will be stored before selecting an exchange. Do not store your coins on an exchange.
Basics of Trading Bitcoin
If you buy Bitcoins at one price, then sell them for a higher price, a profit is realized on the difference between the two prices, less any transaction fees. If the price goes down, you can either sell at a loss, or hodl (hold) until the price goes back up while risking higher losses if it doesn’t.
Sounds easy, right? Trading cryptocurrency is anything BUT easy. The market moves at warp speed and a good trade can go straight to the toilet with an unexpected news story.
Two Types of Traders
There are two major types of traders – “long-term” and “short-term”, depending upon how long they wish to hold onto a position.
Long-term traders study price trends over time and this dictates their decision to buy and hold Bitcoin for long periods with the hope of taking profit at a higher price than their entry point. Given that cryptocurrency is still in the developmental state, many long-term traders feel that it is a good time to buy, regardless of today’s price.
Short-term traders analyze the intraday Bitcoin price behavior and try to take advantage of the swings in price – thus they thrive on the volatility of the market. As adoption of cryptocurrency has increased, price volatility has decreased considerably and many experts feel it is easier to trade than in the earlier days when every little event within the crypto-space had a serious impact on the price.
Risks, Rules and Rewards
It is critical to research and understand the basics of cryptocurrency before making an investment. After doing so, you may decide to try trading crypto as a way of increasing your Bitcoin. There are several risks associated with investing or trading cryptocurrency, just as there is with any asset, but trading can be extremely profitable if certain rules for those new to trading are followed.
- Break your capital into smaller lots for multiple positions at different price levels.
- Never invest your life savings or money that may change your life drastically should a trade result in a loss.
- Take full advantage of available technical tools in order to gain maximum profit.
- Understand the market is a continuous process and requires a lot of time, concentration, and effort.
- Do your own research and stay up to date with current trends.
- Know when to cash out and take profit. It is important to stay focused, unemotional and professional – avoid being greedy.
- Losing, just as much as winning, is an integral part of trading. It is the cumulative end gains that count.
Cryptocurrency is an emerging technology in its infancy. Some will change the world, and some will fail spectacularly. Not every crypto-coin will stand the test of time, and there is no one who can tell you which, if any, will last or even retain its value to any degree. Only time will tell, and meanwhile, the space is filled with scammers just waiting to separate you from your money.
Technical savvy is a requirement. If you are “not good with computers” then don’t jump into cryptocurrency trading. The interfaces are not user-friendly and there is no recourse for your mistakes. You mess up – you lose your crypto-coins…period. You are 100% accountable for your own actions in this space. Really…we cannot stress this enough.
If you want to participate but are not tech-savvy, your best option is to get someone you trust to trade for you or put in the time to teach yourself using minimal amounts.
Expect Glitches & Surprises
Broker and platform technology risk based on the unknown. Again, emerging technology means there will be bugs and scaling issues, glitches, and events that will surprise systems. Everyone knows that Forex brokers are risky, and you should think of cryptocurrency brokers as being at least twice as risky.
Therefore, don’t keep a lot of crypto-coins on the trading platforms. When you make gains, move your coins to your own secure wallet.
Step #1: Wallets
You will actually need two wallets – one on the exchange where you intend to purchase crypto, and one that is secure and completely under your control.
Step #2: Hodl or Trade
Determine your investment goals before you make a buy. If the intent is long-term take steps to create a secure cold wallet. If you intend to trade crypto – study, study, study.
Step #3: Buy Bitcoin
After setting up your wallets and determining your intent, it’s time to buy Bitcoin. Choose an exchange carefully based on your location and the features important to you.
Denver, Co | Mooresville, NC
+1 (888) 210 9215