In order to invest in bitcoins you will first need to have a digital wallet. A digital wallet will allow you to store your bitcoins safely. Bitcoins are a crypto or a digital currency and this means that you cannot store them in a bank account. You need specialized wallets that can hold and store bitcoins or any other crypto currency that you may be interested in.
In order to make the process of issuing and using bitcoins secure and to prevent them from being copied, bitcoin wallets are issued public and private keys. The public key is just like your bank account number. Other bitcoin users will use our public key to locate your account and send/receive bitcoin payments, whereas your private key serves as your authorization signature which must be kept confidential and secure at all times.
The private key is only issued once and as of now it cannot be reissued if you lose it. In the early days there were a lot of stories where people wrote their private keys on a piece of paper and then lost the paper, thus losing access to their bitcoins. The bitcoin community understands that this needs to change, so work is being done to create private keys that can be replaced if lost or forgotten but for the time being, if you invest in bitcoins then you will need to be extremely careful about your private key.
Bitcoin wallets come in different forms
- Online wallet
- Offline desktop wallet
- Mobile App wallet
- Hard ware wallet
- Paper wallet
How To Find A Good Bitcoin Wallet
Online wallets are the simplest of wallets. You can get an online wallet simply by registering on to a website like Coinbase or Binance etc. If you are an amateur bitcoin investor then you should try out online wallets as they are convenient. With an online wallet your funds are stored in the servers of the website your wallet is on.
If you are looking or greater security you can opt for an offline desktop wallet, where your wallet will be securely on your computer but your computers vulnerability will be your wallets vulnerability.
If you intend to use bitcoins for daily payments and transactions then you may be better off with a mobile app wallet where you can make payments on the go with no hassle at all.
If your investing needs are greater then you may look for a hardware wallet. Hardware wallets are in the form of a flash drive. They are very secure, won`t get infected even if they are used with a compromised system, though it is better not to use them in a compromised system. You will however need to keep your wallet safe because since it is physical it will be vulnerable to being lost or stolen.
Paper wallets also exit, where the keys are printed on a piece of paper and every time you need to enter your key you will therefore have to refer to the paper. Technically this is the most secure form of wallet out there since it cannot be hacked in any manner. It is however unsafe, what happens if you dog eats the paper wallet?
Once you have figured out which wallet suits you best, you will need to make sure that you have got a stable and secure internet connection. Try not to use a public network for purchasing or transacting bitcoins. Security is of vital importance here. At the very least you should use a secure personal network and it is better if you can use a secure VPN as well. You can never be too sure.
Needless to say, you will also need a credit or debit card in order to purchase bitcoins. Although you can purchase bitcoins for cash if there is someone in your social circle who is selling bitcoins. You can simply pay cash to them and receive bitcoins. But it is generally not easy to find such sellers. Definitely not when you are looking to buy large amounts of bitcoins with the intention of investing in it for the long term.
Finding A Reliable Bitcoin Exchange
Now that everything is ready, you will need to choose a bitcoin exchange. A bitcoin exchange is a website where you will be able to buy bitcoins in exchange for your local currency. There are dozens of bitcoin exchanges operational over the web. A quick search will tell you which exchange is the biggest and most trustworthy.
At the time of writing this, there is a tough competition between CoinBase and Binance. CoinBase used to be the biggest but Binance has in recent months challenged CoinBase. CoinBase is based in USA and therefore it has to follow American laws and regulations, which require Coinbase to ask for the identity verification of its users. The process of authentication may take up to 2 – 3 working days. Most people find this cumbersome and for this reason traffic has shifted lately to Binance which has its headquarters in Malta. Since it is in a region with low regulatory requirements, as of now Binance doesn’t ask for identity confirmation. Therefore the process of making an account on Binance as easy as it could be.
There are also other exchanges like CoinMama, Kraken, Cex.io, Gemini and a lot of others. So make sure to carry out your own due diligence before you settle for any exchange. The rates offered on each exchange will differ slightly as there is no centralized value setting mechanism for bitcoins.
Once you have registered with the bitcoin exchange of your choice, according to smartbitcoininvestments.com, you can simply go to the purchase bitcoins option and choose the amount of bitcoin stock that you want to purchase, enter your card details and as soon as the transaction is verified the bitcoins will be transferred into your bitcoin wallet.