First, get yourself a bitcoin wallet
Next, you will need a place to store your new bitcoins. In the bitcoin world, they’re called a ‘wallet’ but it might be best to think of them as a kind of bank account.
Depending on the security levels you want, different wallets will provide different levels of security. Some act like everyday spending accounts and are comparable to a traditional leather wallet, while others tout military-grade protections.
The main options are: (1) a software wallet stored on the hard drive of your computer, (2) an online, web-based service or (3) a ‘vault’ service that keeps your bitcoins protected offline or multisig wallet that uses a number of keys to protect the account.
Most have their vulnerabilities: if you store bitcoins locally on your computer, make sure you back up your wallet regularly in case the drive becomes corrupted; and online web wallets employ varying degrees of security against hackers, from quite good (multi-factor authentication) to quite poor (ID and password).
For more on storing bitcoins, see our guide on the subject.
Why Does Buying Bitcoin Take So Long?
Long wait times are usually a problem with existing payment systems, not with Bitcoin itself.
Bitcoin transactions only take about 10 minutes to confirm. Bank transfers in the U.S., for example, can take up to five days to complete.
Bitcoin transactions can be confirmed as quickly as 10 minutes; it’s rare to experience a delay longer than one hour.
This means that a merchant can’t release bitcoins to a customer until five days have passed unless they’re willing to take on risk.
Should I Buy Physical Bitcoins?
Physical bitcoins are physical, metal coins with a Bitcoin private key embedded inside.
We recommend that you stay away from physical bitcoins unless you’re a numismatist.
While physical coins sound like a good idea, they force you to trust the honesty of creator of their creator. The creator could create two copies of the private key.
Unless you immediately open and withdraw the digital bitcoins from your physical bitcoin, the creator could at any time steal the funds it contains.
Can I Buy Partial Bitcoins?
Yes, of course!
Each bitcoin is divisible to the 8th decimal place, meaning each bitcoin can be split into 100,000,000 pieces. Each unit of bitcoin, or 0.00000001 bitcoin, is called a satoshi.
Most exchanges let you buy as little as $5 worth of bitcoins at a time.
Why Should I Buy Bitcoin Instead of Mining?
A long time ago anyone could mine bitcoins on their computer at home. Today, only specialized computer hardware is powerful enough to do this.
Think about it like this:Should you buy gold or mine gold? Well, to mine gold you need big powerful machines, a lot of time, and money to buy the machinery. This is why most people just purchase gold online or from a broker.
So Bitcoin is no different.
You should just buy some if you want coins without trying to mine.
Do I need a Bitcoin Account Before Buying?
With Bitcoin, there are not really accounts.
Instead, you should have a Bitcoin wallet. If you want to store bitcoins, then a wallet is where you keep them.
In Bitcoin these wallets are not called an account but a wallet functions almost the same way. The only difference is you are responsible for the security if your wallet rather than placing the security in the hands of a bank or trust.
Why Would Someone Even Want to Buy Bitcoins?
There are many reasons people want to own bitcoins.
Many people like to purchase some and put them to the side in the hopes that they will be worth more in the future.
Many people are using bitcoins to remit money to their families from out of the country. Right now, Bitcoin is one of the cheapest ways to do this.
People also use Bitcoin to buy stuff online. Big companies like Microsoft, Dell, Newegg and Overstock all accept bitcoins.
Bitcoin is also very unique compared to other markets in that it trades 24 hours a day and never stops. Most stock markets only open on weekdays from 9 AM to 5 PM. So many traders buy and sell bitcoins because it is a fun and fast market to trade.
Can I Buy Bitcoin Stock?
Bitcoin itself is not a stock despite it functioning somewhat like one. You can’t buy bitcoins through a traditional stock fund and instead have to buy bitcoins yourself. This may change in the future if a Bitcoin ETF ever gets approved.
What Happens When you Purchase Bitcoins?
Bitcoins are actually just secret digital codes. When you buy bitcoins, the seller is using a wallet to transfer the ownership of the coins to you. Once your purchase is complete, the codes are now owned by you and not the seller.
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