Are you new to Bitcoin (and Cryptocurrency) and looking to kick-start? Well, this article will provide you with a comprehensive and easy guide to start your Bitcoin journey.
Step 1: Set Up your Bitcoin Wallet
There are different types of Bitcoin wallets, used for different purposes, each having their own pros and cons. The major types include:
- Hardware wallet
- Software wallet
- Web wallet
- Paper Wallet
Selecting the right kind of Bitcoin Wallet depends on the need and the maturity of the user. As this article focuses on beginners, we will first make the below assumptions:
- You want to start with a small amount of Fiat money.
- You want security of your investment, but still want to do minimum number of transactions.
- You want to learn and understand the Market Trends using your first investment.
- You want easy liquidity.
Golden Rule: Only invest the amount which you are accepting to lose.
We will start with the easiest option; a major Web Wallet:
Binance is the largest Exchange in the market and is slowly differentiating itself to be a game changer.
Note: Always double check all links and keep yourself safe from Phishing Attacks.
- Go to Funds –> Deposits
- Search Bitcoin and Select BTC-Bitcoin
Note: Bitcoin had multiple forks so be very careful and select only “BTC”
- BTC Address and Balance – You will find a 26-35 digit alphanumeric address (highlighted in yellow in the below screenshot)
You will use this address to ask for Bitcoin from others, or to send Bitcoin from your wallet account to other accounts.
Note: Always send Bitcoin to Bitcoin addresses only. Sending Bitcoin to other Cryptocurrency addresses will lead to loss of your Bitcoin.
- Best Practices
- Opt for a 2 factor authentication for added security
- Set up anti phishing code
- Complete KYC for higher withdrawal limits
You are all set!
Wait! Before going to the next steps let’s look into some of the advantages and disadvantages of a Web Wallet.
• Quick Access to your Bitcoin
• Trade and purchase other Cryptocurrencies,
• Peg your amount to a Stablecoin, to hedge market volatility
• Security: You account is stored in a central server and in case of a hack you might lose your Cryptocurrency.
There are other wallet options also available (other than Binance and the Hardware wallets). You can learn more about those here: The Best Cryptocurrency Wallets.
Step 2: Purchase/ Transfer Bitcoin to your Wallet
There are few ways you can have Bitcoin in your Bitcoin Wallet
- Ask somebody to transfer – Provide your Bitcoin Wallet Address to the sender and ask him/her to forward you some Bitcoin as a goodwill gesture.
- Over the Counter Purchase – Meet the Bitcoin community in Local Bitcoin Meetups. Pay them offline and ask them to transfer Bitcoin to your Bitcoin Wallet. In this scenario absolute trust is needed.
- Purchase through Fiat – Purchase through Exchange via Credit Card
- Purchase through Fiat – Financial service platforms which accept deposits and withdrawal through Bitcoin.
- Purchase through Fiat – P2P Platforms
We will look into the last 2 options:
- Purchase through Fiat – Exchange via Credit Card
- In Binance, Go to Funds –> Buy with Credit Card
- Select the Bitcoin amount you want to buy and pay by Credit Card
As of Today you have options to buy with USD and Euro
- Check your deposit section. (Also check Binance Terms and Conditions).
Voila! you have your first Bitcoin in your wallet!
- Purchase through Fiat (Non USD/ Euro) – Financial service platforms which accepts deposits and withdrawal through Bitcoin.
What if you want to purchase your Bitcoin using any other currency. Well, there is a way (little costly)!
- Register in Uphold
- In the Overview Tab Click Add Card/Currency
- Add new Card with the currency of your choice. (Note: Not all currencies are activated as of today)
- Come back to the Dashboard and click on the card you created
- Add Fund from Credit/ Debit Card or with Bank Account (SEPA)
- Once you have the funds you can easily convert it to Bitcoin and Transfer to your wallet. (Please note that this service might have high fees.) Go to Use Funds –> Send to Cryptocurrency or utility Token
- Select Bitcoin (BTC)
- Include your Binance Bitcoin Wallet Address. Enter Fiat Amount. Check the amount of Bitcoin you will receive and click Confirm.
- Go back to your Binance Wallet and check your Balance. You should have the amount in you Binance Bitcoin Wallet.
Note: You can check your Bitcoin transaction here, by entering your transaction ID. Transfer of Bitcoin might take some time depending on network congestion.
- Purchase through Fiat – P2P Platforms
Using P2P Platforms like Localbitcoins is also an option. They provide escrow service. Be very careful and beware of fraudsters in these kind of platforms.
Step 3 – Trade using your wallet
If you want to understand the Cryptocurrency Market and its Trends in more details, you might want to trade using the exchange feature. We recommend to start trading with small amounts. Remember the Golden Rule!
- Use the Exchange Feature in Binance (Basic to start with):
- Select the BTC Pair to trade.
Play Safe! Do your own research!
Step 4 – Storing your Bitcoin
If you have high volume of Bitcoin you want to hold for a longer period, and need high security, then, go for a Hardware wallet. Learn more about which hardware wallet to pick here: The Best Cryptocurrency Wallets to Safely Store your Funds
One suggested strategy is as per below:
- Keep a small amount which you want to trade in the Exchange.
- Move the remaining amount to a Hardware Wallet
Step 5 – Selling your Bitcoin
Exchanges like Coinbase provides you with functionality to withdraw USD.
In case of exchanges like Binance, similar to the deposits, there are the below ways:
- Over the Counter – Meet the Bitcoin community in Local Bitcoin Meetups. Transfer Bitcoin to them in exchange of Fiat. In this scenario absolute trust is needed.
- Sell through Fiat – Financial service platforms which accepts deposits and withdrawal through Bitcoin. Uphold and Skrill provide such services
- Sell through Fiat – P2P Platforms like Localbitcoins provides such services.
Lets dive into the below
- Sell through Fiat – Financial service platforms which accepts deposits and withdrawal through Bitcoin. Uphold and Skrill provide such services. Lets check Skrill.
- Register in Skrill
- Go to Deposit –> Select Additional Payment Options –> Bitcoin and Bitcoin Cash –> Click on Deposit now
- Enter the amount in Fiat you want to withdraw (in your local Fiat), put your email ID and click Next
- Select Bitcoin
- Copy Payment URL. Note: The amount of Bitcoin which is needed to be sent is mentioned in the Top Right.
- Go to Binance –> Funds –> Withdrawals
Put your copied Skrill URL in BTC Withdrawal Address and put amount of Bitcoin you want to withdraw
You will receive the amount in Skrill as Fiat! Magic! Now you can send it to your Bank Account.
Though this article demonstrates Bitcoin to Fiat conversion, the author’s opinion is to use Bitcoin as a mode of Purchase (instead of Fiat), which will help in increase in Bitcoin adoption. The processes mentioned in this article can change over time and the readers are requested to do thorough due-diligence before starting. Please test you first transactions, in Binance, Uphold, Skrill, Localbitcoins or any other platform you choose, using small amounts only.
This article is the opinion of the author and every individual needs to do their own research before investing in Bitcoin. Please follow the Rules and Regulations of your country while trading in Bitcoin.
We hope there will be regulations soon so that the processes get smoother!