Cryptocurrency has been dominating headlines in recent months, with Bitcoin topping $46K this past week, accompanied by seemingly thousands of articles proclaiming it to be a financial revolution or nothing more than a short-lived fad.
In reality, cryptocurrency has been gaining traction for years, especially as more Millennials are drawn to the appealing concept of decentralized, digital currency.
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Getting Started
If you want a simple and easy to follow bitcoin for dummies explanation, how you can get bitcoins and how it bitcoins can help you, without floundering into technical details, this bitcoin for dummies guide is for you.
10 years ago if someone told you about digital money, you would look at them so confused. Imagine a new currency where you can only use it online, store it online and it was completely intangible.
Well 10 years ago it was in the process of becoming a thing and in 2008 it made its debut. The first digital currency is Bitcoin. This bitcoin for dummies guide will explain how the system works and how you can make your first bitcoin investment. It will also direct you to resources that will help you store and use your first pieces of digital currency.
Bitcoin for Dummies: What is Bitcoin?
Bitcoin is a cryptocurrency that is open source and created for peer to peer money transfers. Imagine Paypal or Venmo without a central authority. No one to tell you what to pay, how to buy, when to buy with no worries of a huge fee.
Now imagine all your transactions becoming open to the public eye through pseudonymity. Bitcoin was created to combat the financial crisis that happened as the banks had too much power.
Satoshi Nakamoto, the creator of Bitcoin created it to give the people the power of their money. No need for banks to hold your money. You hold your money in your own wallet.
Your wallet can consist of a paper wallet with just your Bitcoin hash address, a mobile/computer wallet or a cryptocurrency hardware wallet.
Benefits
- Quick: One major advantage of cryptocurrencies, in general, is that they are quick. If you buy something, the seller will get their coins pretty quickly. If you purchase with a Visa, they need to wait for the transaction to be accepted, then settle then go to your bank account in 3 days.
- Cheaper Transactions: Paypal and payment processors generally charge 3-4% of the fees and charge that from the seller. In this case, the buyer is paying the fees but it amounts to fractions of a percent.
- Paperless: Going into the age of digital, paperless is becoming bigger as more people are liking it. Digital currencies do not need a reason to be with paper as everything is done on your phone or computer.
- Irreversible Transactions: Some people think irreversible transactions is a bad thing but there are ways to go around it. For sellers, it is a great idea because people cannot make unnecessary chargebacks as we see it being done on sites like eBay and Amazon. To make sure you’re not sending it to the wrong address, always send a minimal amount to the hash address to make sure it is correct.
- Appreciating Asset: With the way things are going, it seems like Bitcoin can’t keep going up forever. To be frank, not everything will go up forever. However, the difference between fiat and Bitcoin is that the government keeps printing more money while Bitcoin has a set amount that there will ever be which is 21 million total coins.
How to Buy Bitcoin
1. Coinbase – Best Overall
Coinbase has emerged as one of the high-profile names in the Bitcoin world placing itself on the top as a one-stop solution for Bitcoins. Coinbase is a San Francisco based digital asset exchange that lets you turn your fiat currency into cryptocurrency. It is the main entry point into the cryptocurrency space for most people. It’s currently is the quickest and easiest way to buy Bitcoins in the US.
Create your Coinbase account and get $5 in free Bitcoin at Coinbase.
Details
- Fees: Coinbase charges 3.99% fees for credit/debit card purchases but you can get your coins instantly. 1.49% if you buy from your bank account.
- Pro: “Instant Buy” option available with credit card or debit card
- Con: Purchases made with bank transfer can take up to 5 days to complete
Summary
- User Interface: Easy to Navigate
- Fees: Average
- Reputation: Trusted
If you wanted to create a Coinbase account you can create a Coinbase account by clicking this link.
Coinbase offers over 25 cryptos to trade, invest, or stake in. If you want to diversify your income sources through cryptocurrencies, Coinbase is an ideal platform to buy, sell, or even build your crypto portfolio.
Related: Coinbase vs eToro: Cryptocurrency Trading Comparison
2. Robinhood – Best for No Cost
Robinhood is a great option for those who want to buy Bitcoin but want to avoid paying any fees. Robinhood is an investing app that allows you to buy and sell Bitcoin with no commissions.
If you’re already familiar with how to buy and sell stocks, then buying Bitcoin on Robinhood will be super easy. In addition to buying Bitcoin (BTC) — you can buy Bitcoin Cash (BCH), Bitcoin SV (BSV), Dogecoin (DOGE), Ethereum (ETH), Ethereum Classic (ETC), and Litecoin (LTC).
Overall, using Robinhood to buy Bitcoin is smart, easy, and straightforward. Plus, you’ll even give you a free stock worth up to $225 for joining. Then you can sell that stock and buy free Bitcoin with it.
Details
- Fees: Free
- Pro: Easy to use and you can buy or sell bitcoin without commissions.
- Con: Limited supported currencies and no crypto wallets.
Summary
- User Interface: Easy to navigate and fully customizable
- Fees: Low
- Reputation: Trusted
Robinhood has commission-free investing for stocks, options, ETFs, crypto, and tools to help shape your financial future. Sign up and get your first stock worth up to $225, free.
Related: Robinhood Review: My Experience Day Trading on Robinhood
3. BlockFi – Best for Earning Interest on Your Crypto Holdings
BlockFi is one of the easiest places to buy, sell and earn cryptocurrency. The exchange allows users to earn up to 7.5% APY on their cryptocurrency and offers a commission-free trading environment, similar to Robinhood. BlockFi provides users the opportunity to earn interest on their crypto holdings instantly, which had never been done before.
So what if you need customer service? BlockFi offers support in three avenues: live chat, email, and phone lines with an agent during weekdays.
Details
- Fees: There are no hidden fees, no minimum balances, and no reason to wait.
- Pro: With a BlockFi Interest Account (BIA), your cryptocurrency can earn up to 7.5% APY. Interest accrues daily and is paid monthly.
- Con: None, BlockFi is committed to trust and transparency. BlockFi has one of the built a best-in-class compliance program to protect your assets.
4. Kraken – Best for Security
As one of the largest and oldest Bitcoin exchanges in the world, Kraken is consistently named one of the best places to buy and sell crypto online, thanks to its excellent service, low fees, versatile funding options, and rigorous security standards — but this is only part of the story. They’ve been at the forefront of the blockchain revolution since 2011.
Details
- Fees: The fee per transaction for buying Bitcoin is 0.9%.
- Pro: Lightning-fast engine allowing 1,500,000 transactions per second gives users a great trading advantage.
- Con: No credit/debit card deposits.
Summary
- User Interface: Sleek design, a good overview of the trading market with lots of customizations.
- Fees: Low
- Reputation: Trusted
If you are trying to take your crypto investments to the next level, you can get started with Kraken here.
5. Gemini – Best Beginner Friendly Platform
Gemini is the best place to buy Bitcoin with debit card instantly. Gemini makes it simple to research the crypto market, buy Bitcoin and other cryptos, and build a portfolio for the future of money.
You can also buy DOGE on the platform and is one of the only exchanges where your deposits are FDIC-protected.
Details
- Fees: Gemini charges 3.99% fees for credit/debit card purchases but you can get your coins instantly. 1.49% if you buy from your bank account.
- Pro: You can buy Bitcoin right now with a debit card, very easy to use app-based interface, available in all 50 states, you can even earn interest on your crypto.
- Con: Customer service support is not the best.
Summary
- User Interface: Easy to navigate and fully customizable
- Fees: High
- Reputation: Trusted
Steps to Purchasing Bitcoin
First and foremost, you need a Bitcoin wallet. As you can guess, this is also tangible and is either on your computer or phone. You can also have a hardware wallet. The wallet will have the ability to store, send or receive your cryptocurrencies. When you have found one that you like, go ahead and pick an exchange to buy your Bitcoins.
Coinbase is the easiest to start with. You simply create an account and put your bank account or credit card information in. Once you do that, you can head over and purchase. In the beginning, there will be a limit on how much you can buy which is a good security measure. When you purchase and get them all into your account, go ahead and send it to a wallet of your choice. Having a wallet makes you the bank of your own coins. bitcoin for dummies
I hope you liked my simple and easy to follow bitcoin for dummies guide. Now the real question is, will you invest in bitcoin?
Traditional investments that were reserved for the ultra-wealthy are now available to you. Wealth professionals recommend allocating 15-20% of your portfolio to alternatives. Diversify your portfolio and earn passive income with investments starting at $500.
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Have you heard that Bitcoin will be sold on Robinhood next month? Would you recommend using them?