What is the right time to buy Bitcoin?
Bitcoin became a hot topic in mass media. Different experts urge you to buy a cryptocurrency and get rid of depreciating fiat money as soon as possible. A lot of people are confused and don’t know when is the right time to go to the bitcoin crypto exchange.
Now it resembles stock trading, and the rule to never buy bitcoin at the top has not been lost. Even though you clearly distrust the current institutions of government, you buy bitcoin because you become aware that the current price is unsustainable and will likely soon begin a long correction if and when the market recognizes this. Also, you are hoping that some kind of financial revolution will result from this correction which could improve your life and expand your options.
In order to trade Bitcoins for a short-term benefit, you need trading experience and knowledge of various Bitcoin trading strategies, which are quite risky!
If you’re just interested in Bitcoin because of technology itself and its promising future, here are two options:
Dollar-Cost Averaging is a method of trade when you buy bitcoin on a regular schedule, regardless of price. It allows a trader to invest a fixed amount of money in equal budgeted investments at regular intervals. Contrast this with a lump sum investment where the investor faces price uncertainty at the time of the initial investment.
DCA allows you to set aside funds periodically, like a regular transfer from your checking account to your investment accounts, as opposed to investing in large chunks of capital.
Entering the market on current prices
People believe that cryptocurrencies are asset class tools like real estate, stocks, and bonds. They are investing and holding for the long term. To them, crypto is a deflationary asset, which means it has the potential to appreciate in value over time as the number of units in circulation declines. They intend to buy bitcoin at any current price and wait a long period of time for increased value.
If you’re just getting started, stick with DCA because it will make it easy to get through the process, and then in the future, you can change the plan.
Recommended Bitcoin Exchange platforms
It’s not easy to pick a Bitcoin exchange. Each of them has its own set of rules, agreed payment mechanisms, and fees. Keep the following things in mind:
- Supported countries – exchange may deny service according to geolocation data, so check if your country is supported.
- Payment methods – vary from debit card to wire transfer.
- Different types of fees – conversion, withdrawal, Bitcoin network, and transaction fee. Each one is unique and has an impact on the overall amount of money you get.
- The exchange rate – differs from one platform to another (allowing to do arbitrage). The final amount you pay is determined by the mix of exchange rate and fees.
- Limits on sales – spending cap is calculated by your payment system as well as an identity authentication procedure. Any exchanges would not authorize buying a significant number of bitcoins due to buying caps.
- Reputation – The number of complaints on certain exchanges and customer support resolving problems.
There is no exchange for unfavorable feedback. Pay attention to the frequency, the essence of such reviews, and the way customer support handles them.
Bitcoin exchange guide
To assist you in choosing the best exchange, we must discern between traders, trading sites, and peer-to-peer platforms.
A broker is a website that allows you to buy bitcoin and other cryptocurrencies through its platform at a price determined by the platform. Although their prices are higher than other exchanges, brokers are very popular because they are the easiest to use. Some examples of brokers are Coinmama, Coinbase, Gemini, and Robinhood Crypto.
- Platforms for trading
A trading platform, in simple terms, is an indirect link between buyers and sellers of the cryptocurrency. Sell orders are placed by the seller, and buy orders are received by the buyer, but there is no direct communication between the two. A small fee is charged by the platform for providing services.
Exchange platforms such as Bitstamp or Kraken are generally the cheapest way to buy bitcoin and other crypto, but they are not the easiest to use.
For starters, order fulfillment relies on finding a seller willing to accept the price you offer, which can take some time. Additionally, some platforms, like BitMex, offer advanced trading options, such as stop and limit orders, which can be confusing for novice traders.
- Platforms for peer-to-peer transactions
P2P platforms allow buyers to communicate directly with sellers and vice versa. This open line of contact encourages the two parties to work out a price of a cryptocurrency.
However, since you are basically sending money to an unknown vendor, this direct contact carries danger. P2P networks, on the other hand, typically have advantages such as distribution in different locations, more payment options, and so on. Paxful and LocalBitcoins are two common peer-to-peer sites.
The most common ways to Buy Bitcoin
- Credit Cards and Debit Cards
Obviously, transferring money from your bank account is the most popular way to buy and sell cryptocurrencies. Many exchanges now allow you to buy bitcoin with your credit card. Coinmama, Cex.io, Coinbase, and eToro are the most common.
Purchasing bitcoins with a credit card bank transfer will still necessitate some kind of identification and will, in most situations, be very costly. Although, the authentication process of bank transfer is nowadays rapid.
- PayPal and Skrill
As of now, Paypal does not allow to buy and sell bitcoin and other cryptocurrencies via its platform. As well as similar service Skrill.
But as usual, users found loopholes in these restrictions letting you buy and sell bitcoin and other cryptocurrencies using the Paypal platform. As well as Skrill.
- Wire Transfers
During this type of purchasing bitcoins via a wire transfer, the money cannot be charged back once it was received by the opposite side. Many sellers, understandably, recommend that you pay them by wire transfer.
Purchases made with wire bank transfers are normally less expensive than those made with credit cards. A wire transfer, on the other hand, takes much longer to finish the exchange and takes several days to complete.
- Western Union
WU is one of the most popular methods to send money anywhere in the world. The payment service is rich in local offices (in banks, merchants, financial institutions, postal offices, and other places), and it has an online version that can accept a credit card.
You’ll need to get an account on a Peer2Peer platform such as Paxful or Localbitcoins. Once the account is created, find a seller accepting WU and open a trade with them.
There are platforms, such as Paxful, that bring together buyers and sellers in the same area to execute face-to-face Bitcoin transactions. Buying bitcoins with cash is, of course, faster and generally less expensive.
The disadvantage of using cash for purchases is that you must communicate with the individual in person. When it comes to real-life cash exchange, you never know whom you will meet, so it’s important to take precautions measures.
- Bitcoin ATM
These devices look like regular ATMs, but instead of connecting you with your bank, they connect you with your crypto wallets. They accept cash and debit cards. Right now, they are not widespread all over the world and mostly installed in big US cities like San Francisco, but over time they’ll become more ubiquitous.
Whatever payment method you select, you’ll almost certainly be asked to include personal information, such as your registered address and identification. In certain circumstances, even the origin of your income. Don’t be afraid!
These procedures are demanded by the government, known as Know Your Customer (KYC), to prevent scammers from using your credit card, and the exchanges follow it. These measures begin to appear with Bitcoin’s mainstream growth.
How to Choose a Bitcoin Wallet
A crypto wallet is a secure digital way of storing, sending, and receiving cryptocurrency like Bitcoin. When you purchase Bitcoin on an exchange, it is highly recommended that you transfer it to your own personal wallet so that you have complete leverage of your funds.
If you don’t, you risk losing your cryptocurrency if the exchange gets hacked or even if it closes down (there were cases).
There are more than 20 different types of Bitcoin wallets to choose from, and comparing them all can be a little confusing. Here are some of the most common choices:
Private Key and Bitcoin address
- A private key is another name for your seed phrase. This is similar to your wallet’s password. Anyone who finds it out will take possession of your Bitcoins, so keep it in secret. Some bitcoin exchanges like Coinbase stores your private key; this type of storing of cryptocurrency is called an exchange wallet.
- Bitcoin address. It is used by other people to send you Bitcoins, much like your email address. It’s a series of letters and numbers that begin with the letters “1” or “3.” It may look like this: 1BvBMSEYstWetqTFn5Au4m4GFg7xJaNVN2. It does not need to be hidden and can be viewed online.
Types of Bitcoin wallets
A non-custodial wallet means you are the only possessor of your bitcoins and are not entrusting them to someone else. Non-custodial wallets come in a variety of types. The Bitcoin Core wallet, for example, is the oldest non-custodial wallet.
Since using a non-custodial wallet is thought to be safer, it also means that you are solely responsible for the protection of the cryptocurrency, so you must take the necessary security measures.
Non-custodial wallets are connected to a specific gadget and can be reached only from it.
Another consideration is that non-custodial wallets are usually more difficult to set up than third-party wallets (also known as custodial wallets). You also risk your cryptocurrency if you lose the private key to your non-custodial wallet. Nobody will be able to return them to you. (This guy can confirm)
When someone other than you controls third-party accounts, it means that you have a custodial wallet. Traditionally it is a company or a stock exchange (Xapo).
Since they are also more targeted toward beginners, using this type of bitcoin storing is easier. It’s also accessible from everywhere on the internet. They are, however, more vulnerable to hacks as a result of this.
If you entrust the fate of your cryptocurrencies to someone else while you use a custodial wallet, it must be a reputable third-party provider.
All players of wallet providing market now employ adequate authentication mechanisms to ensure that the account is not hacked. Two-factor authentication is one of these safeguards.
By requiring you to enter not only your username and password but also a one-time password (OTP) sent to a computer you own via text message or email, 2FA lets the wallet check your identity.
- Multi-Signature Bitcoin wallets
A multi-signature wallet is one that has many owners, and the cryptocurrencies inside it can only be reached if a certain number of owners consent.
If a business creates a multisig wallet of three owners: the CEO and two other executives, they establish such rules for this account that at least two owners allow a transaction. If the CEO wishes to transfer bitcoins to others, he or she must enlist the help of at least one other manager.
Multisig wallets provide more security because even though one of the wallet’s keys is taken, the wallet’s funds cannot normally be accessed without the knowledge of the other member’s password.
Giving yourself two keys and one to someone you trust is a smart way to use a multi-sig wallet, so even if one key is compromised, the bitcoins are still secure and open. Multisig is available in some wallets, such as Electrum.
- Hardware and paper and wallets
You can put your wallet on a physical device such as a USB flash drive or a specialized hardware wallet such as Trezor or Ledger, and in some cases a paper. At the fundamental level, the most important piece of information in Bitcoin and cryptocurrencies in general in the blockchain is your private key. Writing it down on paper creates a paper wallet.
Bitcoin wallet based on hardware is safe because it’s unconnected from the internet and thus can’t be stolen. These types of bitcoin storing belong to the non-custodial category and cold wallets.
Picking the best wallet
Before creating a crypto wallet in order to pick the most suitable for you, keep in mind these parameters
- Usage frequency
If you want to use bitcoin as a payment option and buy and sell stuff on the internet or accept random donations, you will need the one with ease of access based on a mobile device app such as Ledger Nano X or Edge.
On the other hand, if you want to buy Bitcoin as an appreciating asset without frequently using it, hardware and paper options will be more preferable due to their safety.
- Amount of bitcoins you want to buy
If you plan to try out cryptocurrency and purchase a small amount of Bitcoin, the type of storage is basically irrelevant. There is not a lot at stake.
But if you take it seriously and plan to obtain a large amount of crypto, consider a multisig or hardware variant.
The concept of cryptocurrency is over a decade long, and some wallet managers are left behind in terms of usability. If you got scared by some geeky interface and didn’t know what to do, pick a more modern service.
If you want not only to use cryptocurrency but also stay undetected so nobody could trace your transactions pick the wallets that provide such functionality (Samourai, Wasabi)
How much money would you like to invest?
After picking a wallet and the way of buying Bitcoin, you must ask yourself a critical question: how much money are you willing to put into Bitcoin?
It is a highly speculative investment. You should buy the number of cryptocurrencies you can handle losing. If you’re buying Bitcoins for the first time, pick a number that won’t put you in financial jeopardy if the price falls to zero.
When it comes to investing, we have a tendency to be too positive and overlook the possible risk of a negative outcome. My own rule of thumb is to never spend more than 5% of my overall wealth.
Is it possible to buy Bitcoins for less than one bitcoin?
Really, you can purchase bitcoins for less than one bitcoin. Up to eight decimal places can be used to split a bitcoin. This means you can buy a half-billionth of a bitcoin, a quarter-billionth of a bitcoin, or even a hundredth of a bitcoin. A “Satoshi” is the smallest sum of Bitcoin, equaling 0.00000001 Bitcoin.
Purchasing a huge number of Bitcoins
If you want to buy a big volume of Bitcoin, maybe more than $10,000, there are specific exchanges and brokers that specialize in such transactions. These are referred to as over-the-counter (OTC) utilities (Over The Counter).
Other options for purchasing
If none of the above methods work for you, there are a few other choices for purchasing Bitcoins.
ATMs that accept bitcoin
Bitcoin ATMs are devices that accept cash and exchange it for bitcoins. Some ATMs would only encourage you to purchase bitcoins, while others would allow you to exchange the bitcoins for cash.
Many people choose to use ATMs because they have relative privacy during the transaction. You are not required to wait for lengthy identity authentication procedures to be completed. Simply enter your funds and get your coins immediately.
Companies who operate Bitcoin ATMs normally charge a fee for their services, but make sure you know what that fee is when you use it.
Purchasing from private persons
Some people would rather buy bitcoins from a private seller rather than an auction. There are a few items to be aware of in this case:
Examine if you can confirm the seller’s name. Few people want to stay anonymous, which is great, but checking someone’s name reduces the chances of being scammed significantly.
Consider using an escrow program to keep the funds until the vendor gives you the coins. If that isn’t an option, stick to cash and speak with the person in person. In either case, before collecting your coin, avoid using permanent payment mechanisms such as wire transfers.
Before you deem the Bitcoin transaction complete, you can wait for at least two to three confirmations. Of course, the sum of money you’re sharing determines this. Smaller sums can be verified by only one confirmation.
Keep in mind that buying from a person normally entails a great deal of risk, and it’s not always worth the few dollars you’ll save.
You may also hear the term Bitcoin Cash. It is a kind of controversial topic, few details of which are worth mentioning.
In 2017 complexity of calculation to transfer Bitcoins grew to a point when transactions took days to be completed. There were two schools of thought among the bitcoin community. The first fraction thought that people should buy bitcoin to store value, while another group of developers wanted to see Bitcoin as a means of daily exchange.
In order to achieve a faster speed of transactions increasing the block-size limit was needed. This product development did not find the support of the majority of the Bitcoin community, and Bitcoin Cash forked out of Bitcoin. They exist as different products. The current price of Bitcoin Cash is $876.
Blockchain In Digital Advertising
For many of us, the word blockchain is associated with Bitcoin and other cryptos. Still, the blockchain is a more basic cryptographic technology that is paving its way in the advertising business.
Today’s advertisement market is mostly occupied by monopolists such as Google and Facebook, which use their dominant position by manipulating the data and gaining huge profits at the expense of their partners. The lack of control by tech giants leads to parasitic bots activities, which increase advertisement budgets without gaining publisher’s revenue gains.
P2P Blockchain technology will allow to sell and buy advertisement without third party intermediate. With additional tools, it will allow detecting fraudulent bots activities and switch revenue flow to websites with genuine activity. Blockchain will allow seeing audience insight and measure content performance. The ability to purely measure ad performance without parasitic statistics created by bots allows the publishers to better understand their audience and create more efficient content.
More and more countries restrict privacy rights, not allowing tech giants to use the cookie files of their citizens.
Blockchain will allow advertisers to get high-quality data of their campaigns and run them more effectively.
How do I buy bitcoins?
First of all, you create a bitcoin storage. It can be on the hard drive of your computer or an online platform such as Coinbase, Coinmama, so you can access your crypto from anywhere in the world.
Then you have to pick a cryptocurrency exchange that suits your location, payment option. The most popular are Coinbase, Coinmama, and Bisq.
Register and verify your account to pass through the security checks. It’s not complicated. It basically the same as any other platform, so everyone can handle this step.
Attach your bank account, credit card, or debit card. Opening a bank account is recommended when buying bitcoins in large quantities, as transfer fees are usually low. A credit card or debit card is recommended only for small purchases because of its high cost.
Transfer your fiat money to your exchange account, and now you can buy bitcoin.
Can I buy Bitcoin for $10?
Unfortunately, times when Bitcoin cost was $10 are far behind, and the current price is $53,519. Bitcoin is divided up to 8 decimal points called Satoshis, so there is always some amount you can get for $10.
Is Buying Bitcoin a good investment?
Bitcoin and blockchain, in general, is a cutting-edge technology that is here to stay. Early adopters will definitely get huge gains. The value of bitcoin has risen enormously, making news headlines on a daily basis. With that being said, you have to realize that the bitcoin trade is hugely volatile, and trying to predict waves created by big players on the market is quite risky. Never invest in crypto. Your last assets.
Can I buy $20 worth of Bitcoin?
Some exchanges have a lower limit above 10$ to buy bitcoin, but in most cases, it is enough.