Bitcoin has been getting a lot of attention recently and it’s safe to say that cryptocurrencies are slowly creeping into the mainstream. Unfortunately, there is still a lot of misinformation out there. Our articles aim to correct this with useful information!
Are you interested in buying Bitcoin, but feel like you don’t have enough technical know-how? Or you simply don’t know where to start? Don’t worry, in this blog post, we will tell you everything you need to know about investing in Bitcoin.
We will start by briefly summarizing the basics and then we will jump into the buying process. You can use the table of contents to skip ahead. So let’s jump in!
TABLE OF CONTENTS
- Bitcoin Basics
- Buying Bitcoin: Can I Buy a Part of Bitcoin?
- Buy Bitcoin: Where Can I Buy Bitcoin?
- Buying Bitcoin: Conclusion
Bitcoin has had a tumultuous past and undoubtedly has a very interesting future. Therefore it is useful to understand the basics because — despite its growing popularity — many people still don’t know what is Bitcoin, how Bitcoin works, or where to buy Bitcoin.
Bitcoin is a completely digital currency that can be used to buy and sell things. There is also no government or bank that stores or creates Bitcoin.
In 2008 an anonymous person (or a group of people) under the pseudonym of Satoshi Nakamoto published a scientific article proposing a completely new electronic money system. The main feature of this system is the absence of a central authority to oversee it.
This means that Bitcoin is completely decentralized. This is the fundamental difference when we compare it to the standard fiat money issued by the governments.
Bitcoin solves the double spending problem, which is a feature (and some would say inherent flaw) of electronic money.
You see, electronic money is essentially just an entry in a centralized database that is, as such, vulnerable to abuses that remain hidden to the general public. Someone can manipulate the system and use the same amount of money more than once, and thus effectively generate new money out of thin air.
The nature of digital files is such that it is not difficult to duplicate them indefinitely. The entertainment industry is facing this problem ever since the advent of the internet. So how do you eliminate the possibility of someone creating new digital money?
Bitcoin, on the other hand, uses the blockchain, which is based on peer-to-peer technology. When someone wants to complete a transaction, everyone in Bitcoin’s decentralized network receives a copy of this transaction. All network members must confirm this transaction. By doing so, the Bitcoin network operates on the principle of consensus and reduces or even eliminates the possibility of fraud.
One of Bitcoin’s main advantages is also that you can use it for transactions anywhere and anytime, regardless of the country in which you are currently located. You can read more about this technology in our article about Bitcoin.
Now, let’s focus our attention on the main topic of this article – How to Buy Bitcoins.
There are a number of ways to buy Bitcoin. In the following chapters, we will explore those options in more detail. So let’s take a look at how to get Bitcoins and how to invest in Bitcoin.
Buying Bitcoin: Can I Buy a Part of Bitcoin?
Before we start exploring the process of buying Bitcoin, I would like to clarify an often-encountered misconception about the very nature of Bitcoin. Some people believe that they need to buy one whole Bitcoin. At the current price of around 3000 EUR per coin, this would be quite a hefty investment for any beginner.
But let me calm you down by saying that this is not the case! The smallest unit of Bitcoin is unofficially called satoshi. This is one hundred millionth of a single Bitcoin or 0.00000001 BTC. This is currently 0.00003 EUR, so you can easily buy Bitcoin with lower amounts of money.
Buying Bitcoin: Where Can I Buy Bitcoin?
As you can probably imagine, there are quite a few options. The two most convenient methods for beginners are certainly buying through a web exchange and buying via Bitcoin ATMs. We will take a closer look at both ways so you can easily determine what suits you best.
If you are wondering, “How do I buy Bitcoin?”, then you definitely came to the right place! This article is aimed at beginners who are just entering the world of cryptocurrencies.
Purchase Bitcoin using an online exchange
The easiest way to buy Bitcoin is by using an online exchange that supports a credit card purchase and/or a bank transfer payment. We naturally recommend using the Kriptomat platform, but there are many others if our service doesn’t fit your needs.
We will explain the entire procedure by using Kriptomat as an example. Registration is easy, and you can also use a mobile app available on Google Play for Android devices, as well as the App Store for Apple devices.
Let’s look at the procedure for opening a user account on the Kriptomat platform and the procedure on how to buy Bitcoin with credit card or how to buy Bitcoin with a debit card.
How to buy Bitcoin with a credit card
- Go to Kriptomat and click on the registration button.
- You will be redirected to the registration screen where you will need to input the following information.
- Enter your real name and last name.
- Enter an email address that actually exists.
- Create a strong password that you don’t use anywhere else.
- Solve the Captcha to confirm that you are not a robot.
- Click the Create account button.
- Sign in to your email because you will receive an email message from Kriptomat. It will contain a confirmation link. Click on this link to prove that you actually have access to this email.
- After clicking on the link, you will be redirected to a page where you have to enter and verify your phone number. This is an additional security step to prove ownership of your user account.
- After entering the number, go to the next step where you will need to enter the six digit code that was sent to your phone number via SMS.
- The identity verification is the last step before using the platform. You will need to upload an image of a personal document (Kriptomat accepts an ID card and a Passport from the list of supported countries) and a “selfie” where you hold the selected personal document in your hand.
- Go to the “Buy/Sell” section and select Bitcoin (BTC) in the list of cryptocurrencies.
- Select the credit card payment method. You can enter the euro amount you want to spend or the Bitcoin amount that you want to buy. Then click the “Buy Bitcoin” button.
- Confirm the transaction and enter your credit card information. When you are sure that all the information is correct, click the purchase button.
Check out our video guide for a better understanding of the process!
Now you know how to buy Bitcoin with a credit card instantly! Some people wish to buy Bitcoin with PayPal and we can say that new payment options are coming in the near future!
Keep in mind that Kriptomat makes it possible to buy every supported cryptocurrency in direct pair with euros – even the ERC20 tokens that are normally only available in pair with Ethereum (ETH). This means that you don’t need to make multiple conversions from euros to Ethereum, and from ether to token, and then repeating the process in reverse when cashing out. You simply buy and sell the token directly!
How to buy Bitcoin via bank transfer
You can also make a Bitcoin purchase in a more traditional way. I am talking about a Bank SEPA transfer of funds directly to Kriptomat. SEPA represents the Single Euro Payments Area. You have lower fees and higher limits in comparison to purchasing with a credit card, but the process is not quite as instantaneous.
The money transfer from a personal bank account to Kriptomat is usually processed within the same day, but keep in mind that SEPA payments can take up to three working days.
In the buying process below we consider that you already have euro funds on your Kriptomat account. If you don’t have one, then you need to make a deposit through the SEPA form, for which you need to have a linked bank account.
The procedure for adding a bank account and for getting the deposit instructions is shown in the following video guide.
Here are the buying instructions if you already have a connected bank account (if you don’t, see the video above):
- Sign in to your Kriptomat account and go to the “Buy / Sell” section.
- In the list of cryptocurrencies, select Bitcoin (BTC).
- For the payment method, select Euro and enter the amount you would like to spend on your purchase.
- Click the “Buy Bitcoin” button.
- You will be redirected to a page where you can review the transaction and complete the verification.
- In the near future, you will receive purchased Bitcoin on your Kriptomat wallet! In most cases, the process takes a maximum of a few minutes.
Buying Bitcoin via ATM
You can also purchase Bitcoin by using a Bitcoin ATM. It’s a great choice to buy Bitcoin instantly and in a more anonymous way. This is because most ATMs do not require identity verification up to a certain amount. You can use the ATM to buy Bitcoin directly with cash or with a credit card.
It is a slightly less convenient method because you need to find a physical location of the nearest ATM. However, depending on your current whereabouts, this is not necessarily such an easy task. You can use a service like Coin ATM Radar, which shows you the locations of all registered Bitcoin ATMs.
Most of the ATMs run on the same standardized procedure, so you shouldn’t have any issues if you simply follow the instructions below.
How to buy Bitcoin on the ATM
- Approach the Bitcoin ATM and choose an option to buy.
- You will probably need to choose between different preselected amounts. The easiest way is if you choose the option with the lowest amount (usually up to around 2,000 EUR) in order to avoid an additional step that involves identity verification*.
- In the next step, you will need to enter a Bitcoin wallet address to which you want to receive the purchased Bitcoins. Each ATM has a QR code scanner, so it’s best if you use your mobile phone to prepare the QR code of your wallet address. Don’t forget that Kriptomat also offers a secure Bitcoin wallet.
- After entering (or scanning) the Bitcoin wallet, you will need to insert cash or make a credit card payment.
- Click “Buy Bitcoin“.
- Print the receipt that confirms your purchase.
And that’s that! You will soon receive the Bitcoins to your wallet. Quite straightforward, don’t you think? Note, however, that fees on Bitcoin ATMs are often much higher in comparison to those on online exchanges.
*Just to be clear, we aren’t against identity verification. Our service includes it as a critical step to ensure security and to comply with the regulations. We are simply explaining the process with an example where you don’t have to go through the identity verification due to the assumption that beginners will rarely make a purchase of more than 2000 EUR on their first try. Additionally, it is also a shorter and more understandable process.
How to keep your Bitcoin safe?
The answer to this question is provided by the Bitcoin wallet. From a user-experience sort of view, it is actually quite similar to your bank account, but there are big technical differences. We won’t delve into the technicalities in this blog post, so suffice to say that a Bitcoin wallet is always comprised of two parts. The first part is the public address of the wallet, which you can share with other people without much worry. The second part is a private key that you need to keep safe and you must never reveal it.
The main difference is that the crypto wallet doesn’t physically store your cryptocurrencies in a digital file format. Instead, it uses the private key to secure and protect the data about the balance of your Bitcoin account. This is a simplified explanation, so read our article on crypto wallets for a more detailed description.
This is why Bitcoin’s wallet can also be in paper form. The public address and a private key are written in text and QR form.
Kriptomat also gives you access to a user-friendly crypto wallet, where you can store all the supported cryptocurrencies. Of course, you can also send the cryptocurrencies to your private wallet.
There are many different Bitcoin wallets, and each has its own advantages and also potential disadvantages. At their core, we divide them into three different types – hardware, paper, and web wallets.
When using an online platform to buy Bitcoin, it is very important that you use two-step verification.
This significantly increases the security of your user account, as you will always sign in with something you know (password) and with something you have (phone or secret key).
This type of verification is mandatory on Kriptomat, and you have the choice to choose between two different verification methods. The default option is two-step verification via the phone number. Each time you sign in to the Kriptomat, you receive an SMS with a unique code that you must enter into the appropriate dialog box.
Check out our video guide for a better understanding of the process!
Another way is by using the Google Authenticator app that is linked to your user account. The application then creates a new personalized code every 30 seconds, which you must enter before entering the dialog box when entering the user account.
How to enable Google Authenticator
- Sign in to your Kriptomat Account and go to the Settings section.
- Select the Security tab.
- Scroll down and here you can see that the default two-step verification is set as SMS verification. We want to change this, so we click on the Enable Google Authenticator button.
- Install the Google Authenticator app for your Android or iOS device.
- You will receive a QR code and a verification key.
- In the Google Authenticator app on your phone, click the “PLUS” button to add the Kriptomat profile.
- Now you have to scan the QR code that is displayed on Kriptomat. Instead of scanning, you can also manually enter the verification key that was displayed on Kriptomat. After you do so, the Google Authenticator app and your Kriptomat account will be linked.
- Enter the verification key and enter your password to log in to your Kriptomat account. Then enter the six-digit code that is generated in the Google Authenticator app.
- Click the Enable button.
Congratulations, you have made an important step towards improving the security of your account!
What about Bitcoin tax?
Due to the increased popularity and trade in Bitcoin, taxation questions naturally arise.
Taxation policies relating to cryptocurrencies are still being written and is continually being updated changing and accepting. We strongly recommend that you familiarize yourself with the contents of the national crypto taxation documents since each individual situation is treated separately.
Buying Bitcoin: Conclusion
We hope that we have successfully explained how to purchase Bitcoin and how to protect your valuable coins.
We learned that there are many different services where you can purchase of Bitcoin and a number of other cryptocurrencies. They come in the form of exchanges, trading platforms, and ATMs. The vast majority of these services work in a fairly similar way, but some are more suitable for beginners, while others are more suitable for the more experienced.
For the sake of safety, simplicity, speed, and accessibility, we recommend Kriptomat. It is a licensed and regulated service, and we are always available for assistance in your language.
Leave your thoughts and questions in the comments, and we will be happy to respond as soon as possible!