The Beginners Guide to Making Your First Bitcoin Investment
Your first bitcoin investment can be scary. Putting your hard-earned cash into a digital currency you'll never be able to see is far from ordinary. But, if you've made it this far, you know about the ROI of cryptocurrencies like bitcoin. At a price of $750 in January, just a $100 investment would now be over $900. These lucrative investing opportunities are scattered throughout the cryptocurrency market.
When it comes to making these investments, there are various methods to easily acquire bitcoin. Below we will discuss how to get bitcoin, and where to store it based on your investing needs.
The most simple way to get some bitcoin is to use a digital currency exchange like Coinbase. You will use websites like these to exchange your fiat currency for digital assets. This is done with card or through bank account withdrawals. Also, note that on Coinbase the fee for using credit cards is higher— 3.99%, as opposed to 1.49% for bank transactions. You can also buy more when you withdraw from your bank account. Users can get around fees by using Coinbase's trading platform GDAX, importing USD from your bank account, and setting limit orders. Use the link below to receive $10 in BTC when you sign up.
If you're lucky, you have access to a local bitcoin ATM. These machines work just like traditional ATMs and allow you to exchange your fiat for bitcoin, and vise versa. Ususally the fees are more substantial at bitcoin ATMs, however by using it you keep you annonymity and recieve your assets immediately.
Local Bitcoin is another resource you can use. This internet company holds users funds in escrow until the bitcoin is sent from a local seller. You will pay a nice premium using this method as well. If you know someone with bitcoin you can also pay them cash for their bitcoin, if they're willing.
Lastly, you could mine for Bitcoin. This is more on the advanced side and requires specialized computers that compete for the block reward every 10 minutes. By joining mining pools that combine computing power from all over the world, you're able to see more consistent returns.
The most important part of investing in bitcoin is to make sure it stays secure! There are 5 different types of wallets varying in levels of security. In order to pick the best for you, ask yourself, "What will I be doing with my bitcoin?" Below we will touch on the various wallets you can have and what kind of security they provide.
For the small time investor who just wants to play with a little bit of bitcoin and have it somewhere offering instant liquidity, we recommend keeping your bitcoin in the Coinbase wallet after you buy it. Enable Two-Factor Authentication (2FA) and you will be fine. 2FA is a third-party security code that ensures your account can only be accessed from your personal cell phone. We recommend Google Authenticator.
If you're wanting to get a little deeper into cryptocurrency, we recommend a Desktop wallet. These wallets store your private keys for you and are only accessible from your desktop. If your PC breaks or is compromised you will need to use a recovery phrase to regain control of your account. We recommend Exodus wallet. It has Shapeshift built in so you can exchange cryptocurrencies inside your wallet, with no KYC requirements.
Hardware wallets are essentially a safe with a key in it. A hardware wallet like the Trezor or Ledger Nano S, will essentially store your private key. This ensures your private key is never visible to hackers or key loggers trying to seal your assets. If someone steals your hardware wallet or it burns down in a fire, you have a recovery phrase to regain access to your wallet. This is ideal for investors looking to make a larger investment into cryptocurrency.
Lastly, paper wallets. These are probably the most secure because they are simply a piece of paper with all of your vital wallet info on it. These can be stored in places all over the world, or in plain site. They'll consist of QR codes for your address which are great for sending money quickly. This is recommend for investors looking to store crypto away for a long time, or anyone wanting extreme security.
Watching the Market
There are various ways to watch the market prices and news. Our recommendation is coinmarketcap.com. This website compiles every coins essential data like price, percent change, market capitalization, charts, and more. You can also see social media, project websites, and blockchain explorers for each of the coins. It's a great one-stop tool to get your market information quickly.
For your cell phones, we recommend Blockfolio. Although similar, Blockfolio allows you to create a portfolio of your coins which are tracked in real-time. You can also see the latest news from various sources and set price alarms so you're always up to date.