Monday, October 3, 2022

How Do You Get Started In Bitcoin

Robinhood Best For No Cost

How to Get Started with Bitcoin (2022 updated)

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 youâre already familiar with how to buy and sell stocks, then buying Bitcoin on Robinhood will be super easy. In addition to buying Bitcoin â you can buy Bitcoin Cash , Bitcoin SV , Dogecoin , Ethereum , Ethereum Classic , and Litecoin .

Overall, using Robinhood to buy Bitcoin is smart, easy, and straightforward. Plus, youâll 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
  • Pro: Easy to use and you can buy or sell bitcoin without commissions.
  • Con: Limited supported currencies and no crypto wallets.
Summary

Related: Robinhood Review: My Experience Day Trading on Robinhood

Where To Buy Bitcoin

There are hundreds of websites where you can buy Bitcoin.

I recommend you try a few different exchanges as people have proved to have different tastes when it comes to cryptocurrency investing.

In any case, here are the best exchanges I recommend you start using today if you dont already.

*eToro Disclaimer: Your capital is at risk

For more information about these cryptocurrency exchanges, check out our full article: The 5 Best Ways to Buy Bitcoin.

Understand What Youre Investing In

As you would for any investment, understand exactly what youre investing in. If youre buying stocks, its important to read the prospectus and analyze the companies thoroughly. Plan to do the same with any cryptocurrencies, since there are literally thousands of them, they all function differently and new ones are being created every day. You need to understand the investment case for each trade.

In the case of many cryptocurrencies, theyre backed by nothing at all, neither hard assets nor cash flow. Thats the case for Bitcoin, for example, where investors rely exclusively on someone paying more for the asset than they paid for it. In other words, unlike stock, where a company can grow its profits and drive returns for you that way, many crypto assets must rely on the market becoming more optimistic and bullish for you to profit.

Some of the most popular coins include Ethereum, Dogecoin, Cardano and XRP. Newcomer Internet Computer recently burst onto the scene, too. So before investing, understand the potential upside and downside. If your financial investment is not backed by an asset or cash flow, it could end up being worth nothing.

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Tips For Investing In Bitcoin

If you do decide that you want to try Bitcoin investing, be sure to heed the following tips:

  • Understand your risk tolerance: As mentioned before, Bitcoin is a high-risk investment, and you should carefully review your risk tolerance before you invest. If you dont feel comfortable investing in volatile assets or only have a small sum of money to invest, you may want to consider other investment options.

  • Diversify Your Portfolio: The best way to protect yourself from investment losses is to diversify your investment portfolio. Your primary investments should be low-risk, like government bonds or index funds. Next, you should go for medium-risk investments, like real estate or corporate stocks. High-risk investments, like penny stocks or Bitcoin, should be your smallest and least-prioritized investments. Bitcoin is essentially the icing on the cake: the investment that could yield substantial profit but which you could still do fine without.

  • Start Small: If youre on the fence, start small. Cliff Auerswald, President of All Reverse Mortgage, recommends investing $10 per week. Many people still are unsure about whether or not crypto-currencies will pan out. With all the buzz surrounding crypto, though, many are still interested and dont want to miss out, he says. One of the most effective ways to invest in BTC is to just put $10 a week into it. That way, its not a risk if it doesnt end up panning out but over time, youll have a healthy investment.

Make A Plan And Manage Your Assets

An ultimate guide to get started with bitcoins and use them safely

Choosing your investment strategy is important to success in investing. A common strategy is to buy and hold onto Bitcoin in the hopes of riding out the ups and downs in valuation for a higher average return.

JPMorgan Chase analyst Nikolaos Panigirtzoglou favors this strategy. He recently told Insider that “It is better to buy and hold, perhaps allocating a small portion of your portfolio to cryptocurrencies, focusing on the ones typically held by institutional investors, such as Bitcoin and Ethereum at the moment.”

Another popular strategy is the dollar-cost-average approach: buying a tiny bit of Bitcoin every week or month without paying much attention to the fluctuations in price. That way you continue to build your investment at a steady pace you set, holding onto it for the long term.

Experts recommend allocating a very low percentage of your portfolio to cryptocurrency investments, especially when starting out. A single digit amountlike 5% of your total investment portfoliois reasonable. And if you’re wondering if you have to pay taxes on crypto, we answer all your questions here.

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Can I Receive Bitcoin To My Exchange Wallet/account

If you’re using a centralized cryptocurrency exchange like the Bitcoin.com Exchange, the process is the same as above . When you receive Bitcoin to a centralized exchange, however, you’ll have to wait for the exchange to acknowledge it has received the bitcoin and reflect the receipt in your account. This may take quite a bit longer than if you receive your bitcoin to a wallet you control .

Read more: Custodial versus non-custodial Bitcoin wallets.

What Is A Wallet

A wallet is a payment app to send, receive and hold your cryptocurrencies. It functions like a banking app but it doesnt require you to open an account. Just download a cryptocurrency wallet app, back up your recovery details, and you are ready to use cryptocurrency.

Technically, wallets dont hold the assets. It is a piece of software that holds the secret key to access your coins or tokens on the blockchain. Wallets provide you with a public address a long string of characters to receive funds to your wallet. Each different cryptocurrency supported in wallets has a different public address.

To send funds to other peoples wallets, you must know their public address for the asset you intend to send. Addresses can be copy-and-pasted or scanned via QR code to ensure theyre correct. Once you input the destination address, enter the exact amount of cryptocurrency or dollar value and click send. Most wallets will display the fee for your transaction and ask for final confirmation to send. The wallet uses your secret key to sign the transaction and broadcast it to the network. The funds will land in the recipients wallet nearly instantly.

Dont worry, wallets will prevent you from sending to addresses on the wrong blockchain networks. In other words, it wont let you send Bitcoin to Ethereum addresses.

Wallets are available for your smartphone, desktop computer, browser, web page access, or at exchanges. See the best multi-coin cryptocurrency wallet apps for your phone.

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Different Types Of Digital Assets

Many Bitcoin beginners get confused by the different types of digital assets that have emerged since Bitcoin was invented. Some are the native coins used to process transactions on its blockchain. Others can be tokens built on top of the same blockchain. These tokens can represent the US dollar, equity in or access to a platform, art, digital IDs and more.

Here is a brief description to help differentiate them:

Cryptocurrencies Cryptocurrencies are native coins that power a blockchain. A small fee in this coin is required to transact on their networks. These are sometimes called protocol layer assets. Popular examples include Bitcoin , Ethereum , Litecoin , Bitcoin Cash , etc.

Tokens Tokens are created on top of existing blockchains. They can be programmed in any amount and where each token represents a specific value or performs a specific purpose. Tokens can be transacted peer-to-peer on the blockchain like any cryptocurrency.

Bitcoin Is Not Anonymous

How to start Bitcoin mining for beginners (SUPER EASY) – ULTIMATE GUIDE (2021)

Some effort is required to protect your privacy with Bitcoin. All Bitcoin transactions are stored publicly and permanently on the network, which means anyone can see the balance and transactions of any Bitcoin address. However, the identity of the user behind an address remains unknown until information is revealed during a purchase or in other circumstances. This is one reason why Bitcoin addresses should only be used once. Always remember that it is your responsibility to adopt good practices in order to protect your privacy. Read more about protecting your privacy.

Confirmations

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To Trade Or Not To Trade

When you buy or sell a cryptocurrency, you are actively taking ownership of the coin itself.

These purchases are affected via a cryptocurrency exchange, and you will also have to choose a cryptocurrency wallet to securely and safely store your cryptocurrency.

If you are trading in cryptocurrencies, then things are a little different.

When you spread your bets or even straight trade your cryptocurrency, you are speculating on whether the market that you choose will rise, or fall, when you are trading in cryptocurrencies, you never actually have direct ownership of the currency that you are trading.

Trading is excellent fun, and when done well, you can be set to make yourself a hearty profit. It is quick and easy to open an account, and you can usually be trading within five minutes.

It does require that you keep your finger on the pulse of the cryptocurrency industry such as reading the news and monitoring trends and a whole variety of charts.

To understand the substantial difference, read our article on The Difference Between Investing and Trading Cryptocurrency.

Investing In Crypto

If you decide that investing in cryptocurrencies is something you want to try, you are going to need to find yourself an exchange where you can purchase your coins.

There are two types of exchanges, those where you can purchase your cryptocurrency with fiat currency, and those where you need to hold a currency such as Bitcoin already, to be able to buy other types of coins.

Decide Where To Buy Bitcoin

There are a few different ways to buy bitcoin and other cryptocurrencies, including exchanges and traditional brokers.

Cryptocurrency exchanges

You can purchase bitcoin from several cryptocurrency exchanges. Many offer dozens of cryptocurrency choices, while others simply have bitcoin and a handful of alternatives. They carry a variety of different fees and consumer protections, so do your diligence before choosing.

Traditional stockbrokers

The choices among traditional brokers that give customers a way to buy and sell bitcoin are few right now Robinhood was the first mainstream investment broker to offer bitcoin . Like its stock-trading platform, Robinhood charges no fees for bitcoin trades.

Of the online brokerages and cryptocurrency exchanges that NerdWallet reviews, the following currently offer bitcoin.

Available for:

Other ways to buy or invest in bitcoin

What to know before you buy

Have information you may need handy. Setting up a cryptocurrency account takes minutes, but you’ll need to provide some information, including your Social Security number and the number to your bank account, debit card or credit card to fund your bitcoin account. Some providers also may require you to have a picture ID. Record and safeguard any new passwords for your crypto account or digital wallet .

» Learn more: Is Bitcoin safe?

» Dive deeper: What is blockchain, and how does it work?

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How To Get Your First Bitcoin

As mentioned above, you can get your first bitcoin by sharing your Bitcoin wallet address and asking people to send you bitcoin. You may use that address to sell something or to accept payment for your services.

Most people buy their first bitcoin or other cryptocurrency from exchanges like Coinbase. You do not have to buy a whole bitcoin. You can buy as much or as little as you want since bitcoins can be broken into 8 decimal places . Coinbase gives you $10 free bitcoin when you buy your first $100 worth of bitcoin.

Exchanges require your personal information to set up an account and connect your bank to make purchases. The cryptocurrency you buy at exchanges is kept in a wallet hosted for you by the exchange, but you may withdraw/send that cryptocurrency to outside addresses at any time.

If you already have a wallet, you can buy cryptocurrency with a debit/credit card without an exchange account using services like Changelly.

Read this article for a more in-depth review of the best places to buy your first bitcoin.

Top Payment Methods For Buying Bitcoin

Bitcoin : Find all you need to know and get started with bitcoin on ...

These are probably the most common payment method available. These days, many exchanges allow you to purchase bitcoins with a credit card. The main ones are Coinmama, Cex.io, and eToro.

Buying bitcoins with a credit card will always require some sort of identity verification and in most cases will be relatively expensive. On the other hand, the verification process is just a one-time thing, and the waiting time for your bitcoins will likely be short.

PayPal and Skrill

At the time of writing this guide, its still against PayPals terms of use to sell Bitcoins in exchange for PayPal credit. The same goes for Skrill, which is a service thats somewhat similar to PayPal.

However, there are some hacks that would allow you to buy bitcoins with your PayPal balanceyou can read all about buying Bitcoin with PayPal here and heres a guide for buying BTC with Skrill.

Wire Transfers

When bitcoins are bought with a wire transfer, once the money goes through to the seller, it cannot be charged back, no matter what. Naturally, many sellers prefer that you pay them using a wire.

Wire transfers purchases will usually cost less than credit card purchases. However, the time it takes for the transaction to complete using a wire transfer is significantly longer, as it takes several days for a wire to go through.

Cash

Also Check: What Was Bitcoins Highest Price

Mistake #2 Not Having A Plan

Another mistake people make when starting out with trading is not having an action plan thats clear enough. In other words, they dont know why theyre entering a specific trade, and more importantly, when they should exit that trade. So clear profit goals and stop-losses should be decided before starting the trade.

For Aspiring Advanced Traders: Binanceus

  • Pros: Low trading fees both simple and advanced dashboard options lots of altcoins.
  • Cons: Not quite as beginner friendly as Coinbase under more scrutiny.

Binance.us is the lite version of Binance, which is the world’s largest cryptocurrency exchange by volume. Binance.us exists to navigate the red tape of U.S. regulations. And while it may not have all of the features and altcoins of its international parent, it’s a compelling rival to Coinbase in its own right.

The platform’s chief advantage is its low fees: just 0.5% for instant buying and selling. You can lower your fees even more if you use Binance’s proprietary crypto, BNB, to cover the fees.

Binance.us is also an excellent exchange for beginners to grow into. It offers both simple and advanced dashboard options as well as a greater selection of altcoins than does Coinbase.

The downside to using Binance.us is that the platform is currently attracting regulatory scrutiny. That’s not uncommon for crypto exchanges but it’s something to keep an eye on nonetheless.

So if low fees and wide selection are appealing to you, Binance.us is a compelling choice.

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Become A Bitcoin Consultant

People that get involved with Bitcoin find themselves learning a lot about cryptocurrency in a short period. For some people, the information overload is too much to handle, and they cant grasp the topic. Others find the blockchain and hot and cold wallets fascinating, soaking up all the technicalities around the industry.

If you start learning about Bitcoin, 6-months later, youll find yourself an expert about everything to do with the topic of cryptocurrency. If you put in the time to study how the markets work, and how to trade, sell, and buy cryptocurrency, thats valuable knowledge.

Some people will pay you to learn what you know. You could put together information courses on how to trade, buy, and sell, crypto, and then promote it through social media. Selling a virtual product means you keep no physical inventory, reducing your overhead costs of doing business.

Bitcoin consultants are in high demand, even in a falling market. If you build your reputation as an expert in crypto, eventually, youll start to obtain a client base. When the next Bitcoin bull-run comes around, youll find yourself in the perfect position to benefit from the next bubble.

Choose A Bitcoin Exchange

How To Mine Bitcoin – Easy & Simple

After you have a wallet, youll need to register with a fiat-to-crypto exchange. This means a company that accepts regular money in exchange for cryptocurrency such as Bitcoin. In crypto parlance, fiat currency is any government-issued money like U.S. Dollars, Euros, or Sterling.

When you buy bitcoin from a fiat-to-crypto exchange, the company sells you cryptocurrency from their own reserves. This means that they can set the price and charge a fee for their service. For this reason, fiat-to-crypto exchanges are sometimes referred to as broker exchanges.

Some examples of reliable trusted, and secure exchanges include:

eToro Disclosure – eToro USA LLC Investments are subject to market risk, including the possible loss of principal.

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