5 Simple Steps to Get Your First Bitcoins
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OK, so you’ve learned the basics about bitcoin, the next step is to get some bitcoins and in this guide I will tell you what you need to know.
You can purchase bitcoins from either exchanges, but the simplest and fastest way to purchase bitcoins instantly with a credit card or debit card is via Indacoin. Here you can acquire $50 or less of bitcoin fast and usually within 10 minutes.
However, you may be new to the entire cryptocurrency concept. That’s why I recommend you learn a couple of things.
Bitcoin truly is an empowering technology. However, it is also different than the currency you know and use every day.
Get Started With Bitcoin – Step 1
There are a few things that you need to know before you start using Bitcoin. Bitcoin is still experimental but has been operational without any interruptions for over eight years.
- It is impossible to counterfeit or inflate Bitcoins.
- Bitcoin wallets can’t be frozen and bitcoin payments are impossible to block. Bitcoins can be used to send or receive any amount of money at very low cost, with anyone, anywhere in the world.
- You should only deal with businesses or people you trust because Bitcoin transactions cannot be reversed or refunded.
- You can directly control the money yourself with Bitcoin. You don’t have to go through a third party like a bank or PayPal.
- A Bitcoin transaction must be confirmed at least once to be valid. However, I recommend 6+ times before it has happened and becomes irreversible.
- You can get bitcoins by accepting them as a payment for goods and services or by buying them directly from an exchange with your bank account. You can also buy them from a friend or someone near you.
- Bitcoin is not anonymous. However, there is tumbling.
- All Bitcoin transactions are stored publicly and permanently on the network. This means anyone can see the balance and transactions of any Bitcoin address.
- There is a growing number of merchants and services accepting Bitcoin all over the world and Bitcoins can be used to pay them and rate your experience to help honest businesses to gain more visibility.
- The Bitcoin industry is always changing. There are also many Bitcoin news services to stay up to date.
How to Get a Bitcoin Wallet (Step 2)
Next, you will need a place to store your new bitcoins and they’re called a ‘wallet’ in the bitcoin world.
Different wallets will provide different levels of security, depending on the security levels you want. Some wallets are comparable to a traditional leather wallet and act like everyday spending accounts, while others tout military-grade protections. It is simple to set up your first Bitcoin wallet and there are several quality desktop, mobile, and hybrid wallets available.
I recommend the following path:
- Get a mobile wallet like Airbitz (iPhone, Android), Mycelium (Android) or CoPay (iPhone, Android).
- Buy bitcoins from one of the many exchanges or acquire bitcoins from a friend, as payment for a good or service.
- I recommend Armory if you decide to store large amounts of bitcoins and want to know they are absolutely safe.
Best Mobile Bitcoin Wallets
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iPhone and Android apps are available with these popular Bitcoin wallets:
breadwallet (Android)
Breadwallet started out as the most popular wallet for iPhone. This wallet is also now available for Android devices running Android 6.0 or higher. It is a great place to start for users who are new to bitcoin because of the simplicity and easy-to-use security.
breadwallet (iOS)
Breadwallet is the most popular iOS wallet due to its combination of simplicity and security. I would strongly recommend Breadwallet to iPhone users in search of their first Bitcoin wallet because this wallet is easy to be understood.
Copay
Copay is a Bitcoin wallet by Bitpay. It is available on iOS, Android, Windows Phone, Linux, Max OS X, and Windows. It’s easy to use the same wallet or accounts across multiple devices because Copay is available on multiple platforms.
Copay is a good choice for new Bitcoin users because of its simple, clean user interface. Also, due to a shared account feature, which requires a certain number of users to sign each transaction Copay is a great option for businesses. For example, two co-founders could create a 2 of 2 wallet and they will both be required to sign each transaction.
AirBitz
AirBitz is another Bitcoin wallet that’s great for everyday use because it manages accounts with usernames and passwords, but doesn’t have access to your funds. For less technical users who may have trouble backing up or understanding HD seeds this type of account creation is easier.
AirBitz is integrated with Fold. This means you can get 20% discounts at Starbucks from within the wallet.
Best Bitcoin Software Wallets
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Bitcoin software wallets are downloaded to your computer and most of them require a day or so to download the blockchain before they are ready for use. I love bitcoin software wallets because they give me more control and I do not depend on third-party services.
Bitcoin Core
Bitcoin Core is the “official” Bitcoin client and wallet. However, due to slow speeds and a lack of features it isn’t used by many. It is important to note that Bitcoin Core is a full node (https://bitcoin.org/en/full-node). This means that it helps verify and transmit other Bitcoin transactions across the network and stores a copy of the entire blockchain, which offers better privacy because Core doesn’t have to rely on data from external servers or other peers on the network. One of the best ways to use Bitcoin privately is definitely Bitcoin Core routed through Tor.
Armory
Armory is the most mature, secure and full featured Bitcoin wallet. However, the problem is that it can be technologically intimidating for users. This is the most secure option available whether you are an individual storing $1,000 or institution storing $1,000,000,000. Users can setup a secure offline-signing process in Armory and they are in complete control all Bitcoin private keys.
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Best Bitcoin Web Wallets
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Bitcoin web wallets are the easiest and most convenient to use. However, because the private keys to your bitcoins are usually held by a third-party Bitcoin web, wallets are potentially less secure than the above options.
I do not recommend any of the current Bitcoin web wallets due to the large number of security breaches where people have lost bitcoins. A wallet like Copay (https://copay.io/) can be used on mobile & desktop and is easy to use across many devices. It provides the benefits of a software wallet and also helps you securely share wallets with other people.
Best Hybrid Bitcoin Wallets
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You can both control the private keys and have the ease of use of a web wallet with Hybrid Bitcoin wallets.
Copay
Copay is a Bitcoin wallet by Bitpay. It is available on iOS, Android, Windows Phone, Linux, Max OS X, and Windows. It’s easy to use the same wallet or accounts across multiple devices because Copay is available on multiple platforms.
Copay is a good choice for new Bitcoin users because of its simple, clean user interface. Also, due to a shared account feature, which requires a certain number of users to sign each transaction Copay is a great option for businesses. For example, two co-founders could create a 2 of 2 wallet and they will both be required to sign each transaction.
Best Bitcoin Hardware Wallets
Bitcoin hardware wallets do not expose your private keys to the network and that’s why they are the most secure.
- OPENDIME (https://www.opendime.com/) – The Bitcoin Credit Stick
- OPENDIME Review (https://medium.com/@beautyon_/exquisite-opendime-ad1195a2790e)
- Ledger Wallet – Smartcard based and malware proof
- Ledger Wallet Review
How to Get Bitcoins (Step 3)
How to Purchase Bitcoins
With the Bitcoin price so volatile many people seem curious about getting some and Bitcoin newcomers will find a variety of exchanges competing for their business.
Exchanges are the best option if you want to engage in regular trading and speculation and most exchanges will store amounts of digital and/or fiat currency for you, much like a regular bank account. Also, exchanges don’t need total anonymity and don’t mind lengthy bureaucratic setup procedures that usually involve proof of identity and supplying detailed contact information.
Below I have listed some of the best exchanges.
Coinbase is the world’s most popular bitcoin. Users in the US, Canada, most of Europe (European users can purchase bitcoins with 3D secure credit or debit cards), and Singapore can purchase bitcoins with a connected bank account or SEPA transfer.
Kraken is one of the world’s largest Bitcoin exchanges and residents of Europe and the UK can deposit and buy bitcoins with same day SEPA transfer.
Indacoin is a global platform that enables the fastest bitcoin buys in more than 200 countries with a credit or debit card. The best thing is that the registration is not needed.
You will receive a call from Indacoin with a 4-digit code if it’s the first time you use the card and after that you will enter the code on your order page and you will have to enter a 3-digit code. This code can be found on your online card statement next to the charge amount.
For the first transaction you will have the limit of $50, for the second transaction you will have $100 available after four days of the initial purchase, $500 after eight days of the first purchase. The total limit for the first month will be $5,000 and after that you will have no limits at all.
After your card is verified, cryptocurrency will be sent automatically within ten minutes after the payment.
SpectroCoin is an all-in-one solution for Bitcoin. It offers an exchange, debit card and ability to purchase bitcoins with credit cards.
LocalBitcoins is an escrow service that helps match Bitcoin buyers and sellers and is one of the most trusted platforms to buy Bitcoins from. It offers the most diverse payment methods and includes almost every payment method known to man, including Cash, NEFT, PayPal, Paytm, Western Union and what not. And the best thing is that it requires zero verification!
Warnings about Wallets, Exchanges, and Banks
Exchanges and wallets don’t provide the same protections banks do despite the proof of identity requirements.
For example, if the exchange goes out of business or is robbed by hackers there is often no or limited insurance for your account.
Bitcoin does not have legal status as a currency in most of the world. Also, authorities usually do not know how best to approach thefts. Some larger exchanges have replaced customer funds after a theft from the exchange itself. However, they are not legally obliged to do so at this stage.
Also, you do not have any guaranteed way to recover your funds if a theft from your personal wallet occurs because of a security or password lapse on your part.
How to Earn Bitcoins
Many people find that the best way to get bitcoins is to accept them as payment for the products or services they already sell and if you prefer anonymity or don’t want bank hassles, the easiest option to acquire bitcoin is to make a face-to-face trade with a local seller. Just give your customers the option to pay in bitcoin and I recommend you to sign up for a bitcoin merchant account to make it easy. This account allows you to send invoices and integrate bitcoin payments into your order pages for the most popular online shopping cart systems.
- BitPay (https://bitpay.com/) – (I strongly recommend it) – Merchant tools and account services
- Bitcoin Faucet – You can get free bitcoins that are provided by sponsors
- Jobs 4 Bitcoin (http://www.reddit.com/r/Jobs4bitcoins) – Subreddit where you can find jobs
A Word or Two about ‘Bitcoin Mining’
I’ve heard you can make your own bitcoins (http://www.coindesk.com/information/how-bitcoin-mining-works/) and I will tell word or two about mining.
‘Mining’ your own bitcoins with your PC or a powerful graphics card was possible until not so long ago. However, time and the increasing popularity of bitcoin have brought more and more powerful, mining-specific devices (called ASICs) onto the network. These devices increased the difficulty and energy required to mine worthwhile amounts of bitcoin.
Also, the number of bitcoins remaining to be mined diminishes sharply as time progresses, which means that mining as an individual isn’t as cost-effective as it was just a year ago and many end up paying more for hardware and electricity than they ever make back in bitcoin. Getting started with Bitcoin mining can be a daunting endeavour. However, it has become highly specialized so you may want to leave it to professionals with Bitcoin cloud mining services.
Nevertheless, there are many excellent bitcoin mining systems available and this Bitcoin miner
It is important to point out that bitcoin mining is highly competitive and risky for would-be participants and I recommend you to check our bitcoin mining guide for more detail.
Bitcoin ATMs
Bitcoin ATMs are growing in number although it is a relatively new concept.
More ATMs are on the way, from many different vendors including Robocoin (https://roboco.in/), Lamassu (https://lamassu.is/), Genesis Coin (https://bitcoinatm.com/), CoinOutlet (https://coinoutlet.io/ATM), and BitAccess (http://www.bitaccess.co/).
Bitcoin ATMs are like a face-to-face exchange but with a machine. You insert your cash and either scan your mobile wallet QR code or receive a paper receipt with the codes necessary to load the bitcoins onto your wallet.
It is important to note that Exchange rates vary. They may be anything from 3% to 8% on top of a standard exchange price.
An Investment Trust
You can turn to an investment trust, such as The Winklevoss ETF or the Bitcoin Investment Trust (BIT) if you don’t like the idea of having to purchase and safely store a large amount of bitcoins.
This trust invests exclusively in bitcoins. It uses a state-of-the-art protocol to store them safely on behalf of its shareholders. The fund was exclusively for serious (i.e.: very rich) investors, but since 2014 is open to all.
The Bitcoin Superfund is a new investment trust soon to launch in the United Kingdom.
How to Use Bitcoins? (Step 4)
Bitcoin is a new technology and starting to use them can be exciting. Bitcoins can be used to buy just about anything you want, such as a brand new car, dental services, travel and even luxury real estate.
You can purchase gift cards with bitcoin and shop easily at most of the stores you already use and I recommend searching the Bitcoin merchant directories below to locate the merchants you are interested in.
Bitcoin Merchant Directories
- purse.io – You can get discounts larger than 20% on Amazon.com
- Coinmap (http://coinmap.org/) – Helps you find bitcoin friendly merchants near you
- Airbitz – Helps you find bitcoin friendly merchants near you and online
- Open Bazaar – It’s a decentralized marketplace
„Virtual private network (VPN) services“ is one of the best things to purchase with Bitcoin. These services keep your Internet traffic safe, secure and private. For that reason I put together a comprehensive list of VPNs you can purchase with Bitcoin.
Bitcoin Debit card is another tool many people like to purchase. It enables people to load a debit card with funds via bitcoins.
Staying Informed With Bitcoin News (Step 5)
Paul Vigna and Michael Casey of the Wall Street Journal authored The Age of Cryptocurrency
Another wonderful resource is the book from unofficial Bitcoin spokesman – Andreas Antonopoulos – Mastering Bitcoin.
There is the Captainaltcoin News Section.
I can also recommend some nice places to keep up with bitcoin news and discussion:
- Bitcoin Knowledge Podcast – You can find interviews with top people in the Bitcoin world here.
- Bitcoin Charts – You can find price charts here.
- r/bitcoin – You can find bitcoin links and discussion by the Reddit community here.
Conclusion
Purchasing bitcoins is not always as simple as newcomers expect, but the good news is that it is getting easier all the time because the number of options is increasing.
Some may not even necessarily require a wallet or Internet access and other ideas have included stored-value cards, bitcoin debit cards and physical bitcoin ‘coins’ with a wallet value pre-loaded.
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