- July 14, 2021
- |Bitcoin, Cryptocurrency, University
- | 140,328
This year, investing in Bitcoin is at the top of many financial experts’ lists.
According to estimates, Bitcoin has minted more than 100,000 millionaires.
Buying cryptocurrency has become easier over the years. Exchange platforms are becoming safer, and apps like Robin Hood are also allowing users to invest in crypto. Nowadays, you can even buy Bitcoin using a Bitcoin ATM.
However, before you begin investing in Bitcoin, there are some important things to know. Otherwise, you could lose more money than you make.
Are you ready to get clued up on how to invest in Bitcoin? Keep reading to find out everything you need to know in this guide on cryptocurrency for beginners.
Best Practices For Investing In Bitcoin
One of the first things to know about before you invest in Bitcoin is the best practices around cryptocurrency investing.
One of the first guidelines is not to follow the crowd. Thanks to their volatility, the crypto markets can experience a lot of hype, and you shouldn’t base your investment decisions on this alone.
You also shouldn’t invest money you can’t afford to do without. Because cryptocurrencies and Bitcoin are more volatile than many traditional investments, it’s hard to predict what the prices will do over the short term.
There is a myriad of factors that indicate a rosy future for Bitcoin. For one, despite Elon Musk’s recent tweet, research shows that Bitcoin is substantially greener than our traditional monetary system.
Besides being borderless, secure, and decentralized, Bitcoin also consumes far less energy than traditional banking. It’s estimated that Bitcoin mining uses 2.156 billion fewer gigajoules than our current banking system per year.
If you want to learn more about the math behind this, check out our article on Bitcoin’s carbon footprint.
However, even though Bitcoin and cryptocurrencies could save the planet—this doesn’t guarantee that your Bitcoin investment will be worth more in a few months’ time. Therefore, always invest money you can afford to do without for the immediate future. Otherwise, you might be forced to sell when prices are down, and end up losing money instead of realizing a profit.
How To Buy Bitcoin
Once you are ready to buy Bitcoin, the first thing you’ll need to do is find an investing platform, online exchange, or Bitcoin ATM through which to buy your BTC.
Here are the steps to take for buying Bitcoin via an online exchange or a Bitcoin ATM.
Buying Bitcoin Through An Exchange
If you want to use an online exchange to buy your Bitcoin, make sure you choose one that is secure, has a good reputation and guarantees your money in event of a hack. After this, you will need to create an account, provide proof of identity, verify your account, and link your banking account.
Depending on the exchange, you may need to wait a number of days or even weeks for your account to be approved. Once your account is verified, you can fund your account and place your Bitcoin buy order. Once the order goes through the Bitcoin will then be yours. However, it won’t live in your Bitcoin wallet, it will be in the exchange’s keeping.
At this point, you can choose to keep it on the exchange or move it into your own online Bitcoin wallet, or into cold storage on a hardware or paper wallet.
Buying Bitcoin With A Bitcoin ATM
If you want to buy Bitcoin for cash, and skip any lengthy approval processes, then using a bitcoin ATM is a great option.
Bitcoin ATMs used to be a novelty. However, as demand for them increases, you can now find Bitcoin ATMs in most areas of the US. Last year alone the number of Bitcoin ATMs rose by 177%.
The first thing you’ll need to do is locate the closest Bitcoin ATM. Before you head off to the ATM you will also need to assemble any required documents.
For our ATMs, all you need to bring is your cellphone, photo ID, and cash.
Once you get to a Bitcoin ATM you can deposit your cash and use it to buy your Bitcoin. Bitcoin ATMs are very user-friendly and operate in much the same way as regular ATMs.
If you already have a Bitcoin wallet you will need to enter its address into the ATM. Your Bitcoin will automatically appear in your wallet after payment is received.
If you don’t yet have a Bitcoin wallet, the ATM will print you a paper wallet.
Bitcoin ATMs offer a number of advantages over exchanges. You can pay in cash, and buy Bitcoin safely and instantly. If you’re a crypto beginner who’s looking into investing in Bitcoin, Bitcoin ATMs offer a highly secure and simple way to buy BTC.
How To Store Bitcoin
Once you have purchased your Bitcoin, you will need to decide how to store it. One of the tenants of investing in Bitcoin is making sure it’s secure at all times.
According to estimates, roughly $140 billion worth of bitcoin is lost or stranded in digital wallets to which the owners lose the keys.
But losing the keys to your wallet isn’t the only way you can wave goodbye to your Bitcoin investment. Another way that people have lost money is through online exchange hacks.
To date, roughly $11 billion worth of crypto has been stolen in exchange hacks.
Let’s take a look at how to safeguard your crypto from accidental loss and hacks.
Storing Your Bitcoin Online
There are two main ways of storing Bitcoin online. You can either keep it on an exchange or trading platform, or you can store it in an online wallet.
If you buy your Bitcoin through an exchange online, you can choose to keep it on the exchange. This is a convenient option if you’re planning on selling some of it in the near future. However, to secure the safety of your money you must ensure that the exchange guarantees your holdings in the event of an attack.
You can also choose to keep your Bitcoin online but move it to an online crypto wallet. This way you can conveniently transact with it any time you like. However, this isn’t generally recommended for storing large amounts of Bitcoin long-term.
There are various wallet creation platforms you can use. Once you have created your wallet, it can live either on your PC or on your phone. If you have an online wallet located on one of your devices make sure that you have good anti-virus protection in place.
You should also protect your device with a password. You should also back up your wallet seed and private key. This way, if someone steals your device, you can resurrect your wallet on a different device and move your Bitcoin out of it before the thieves potentially crack your wallet.
Storing Your Bitcoin In An Offline Wallet
One of the most secure ways to store Bitcoin and other cryptos is in an offline wallet. To do so, you will need to delete your online wallet from your device and store your wallet keys (and password if you are using MetaMask).
If you lose your wallet keys, it’s impossible to recover your crypto because Bitcoin isn’t controlled by a central body. Therefore, make sure that you back up your wallet keys in various ways.
Don’t forget; keep your wallet keys somewhere safe to make sure that the information isn’t destroyed by fading, fire, flooding, etc. The last thing you want to do is refer to your paper wallet, only to find out that the ink has faded to the point where you can’t read it.
Some people choose to back up their wallets on USB sticks—but beware that USB sticks and hard drives aren’t immune to failure. Therefore, you might want to choose a variety of forms in which to backup your wallet keys.
For instance, you can keep them on a USB drive in your safe, and on a laminated card or paper in a safety deposit box.
When you want to transact with your bitcoin, you can will then need to resurrect your wallet using your wallet keys and password (if you’re using MetaMask).
Creating an offline wallet in this manner is one of the safest ways to store large amounts of Bitcoin.
Lastly, you can also opt to use a hardware wallet. When you want to access your wallet, you can plug the hardware wallet into your computer and enter the password.
A hardware wallet that is plugged in, means your Bitcoin wallet is online. A hardware wallet that is unplugged is offline and secure. As with USB sticks, you should still keep your wallet seed backed up and safely stored in the event of hardware failure.
Also, make sure you don’t purchase a hardware wallet that isn’t from a trusted brand.
Are You Keen to Start Investing in Bitcoin?
Now that Bitcoin has proved itself a worthy investment, many are using it to add diversity to their portfolios. Besides being a store of value, Bitcoin can also act as a hedge against inflation.
Are you ready to start investing in Bitcoin?
If so, one of the easiest ways to do so is by utilizing a bitcoin ATM. Check out our list of Bitcoin ATM locations to get started on your cryptocurrency investing journey.