HOW TO BUY YOUR FIRST BITCOIN?

How do I buy Bitcoin? How much money should I invest? Is this safe? These and similar questions often arise for people deciding to buy their first bitcoin. To make the process easier for you, we’ve put together a short guide for your first bitcoin purchase. Let’s take a look at the most important steps needed to do this.

WHERE TO START?

For many, buying bitcoin for the first time is a big step. Problems often arise with the improper storage of bitcoin, which can quickly lead to loss of ownership. There are also many fake sites offering to buy or sell cryptocurrencies, with individuals behind the scenes preying on our data and assets.

It is best to start with the right education. A central mantra in the Bitcoin community is
“Don’t trust, verify!”
which dictates that each individual should verify information for themselves, rather than taking the word from others.

CHOICE OF EXCHANGE

Most people buy bitcoin from online exchanges, because that’s where most of the merchants are willing to sell us bitcoin. Exchanges are centralised and often financially exposed, which can quickly lead to collapse and liquidation. Most of them also offer the purchase of other cryptocurrencies, which are often backed by fraudsters who use our funds to enrich themselves.

For this reason, we advise you to buy bitcoin from reputable and established exchanges with a long history of operation.
We do not recommend any particular exchange
but we advise you to use those that are the most regulated and under the scrutiny of several regulatory agencies. Some of the most notable are:

There are also over-the-counter (OTC) providers of direct bitcoin trading. The most reputable in the European area are
Peach Bitcoin
and Relai App.

WHERE TO START?

Once you have chosen an exchange or trading service provider, it’s time to make your first purchase. You can transfer money to the exchange office via direct bank transfer or. make your purchase using your online payment card. Some exchanges also offer other purchasing options. A direct bank transfer usually has the lowest transaction costs, but it may take a day or two for the funds to be deposited into your trading account.

SHOPPING STRATEGIES

Once you have funds available at the exchange office, you can start shopping. There are several strategies for buying bitcoin, but since most people are not professional traders, we advise the most basic strategies.

*INVEST ONLY AS MUCH MONEY AS YOU ARE WILLING TO LOSE OR KEEP FOR AT LEAST A FEW YEARS!*

ONE TIME PURCHASE

The most basic strategy for buying bitcoin is to buy it once, without focusing on the price movement. When you think the time is right, make a one-time purchase in your chosen value. You should be aware of the fluctuations in the market value, which can fall or rise by several percentage points in the space of a few days.

Once you have made a single purchase, you can immediately focus on the next step.

DOLLAR COST AVERAGING STRATEGY

The dollar cost averaging (DCA) is a slightly more advanced strategy, which many consider to be more “safe” or incremental than a one-off purchase. It is a strategy where you make several small purchases over several episodes, either weekly, monthly or on your own schedule. This strategy is more resilient to short-term price fluctuations and is suitable for those who would like to gradually invest part of their monthly earnings in bitcoin.

After each purchase, or when you have accumulated more bitcoin in your trading account, we advise you to move on to the next step immediately.

SELF-CUSTODY

This step is extremely important for the proper maintenance of your property. Bitcoin purchased from an exchange or other provider is not your property until you are the sole owner of the private key. A private key allows you to sign bitcoin transactions, thereby indicating your ownership of those bitcoins. When you store bitcoin at an exchange, the exchange has control over your private key and thus control over your assets. To avoid this risk, after each purchase, you should transfer the coins to your wallet for your own custody.

There are several types of bitcoin custody, and thus several wallets:

HOT WALLET

Hot wallets are wallets that connect to the internet and allow you to quickly dispose of bitcoins and sign transactions. The problem with these wallets is the risk of your private key data being stolen because it is connected to the internet.

MEMORY/BRAIN WALLET

Memory or brain wallets are ways of storing bitcoin where the private key information is stored in your memory in the form of a seed phrase. The private key can be written down in the form of 12 or 24 words, which can be memorised by the individual and thus carry access to their property in their own memory. This is of course not advisable, as at any moment an individual may forget their seed phrase and thus lose access to bitcoin. For this reason, it is always advisable to have this information recorded elsewhere in physical form. For this purpose, there are steel plates that can be engraved with the seed phrase and stored safely in a safe or other place. You can also write the phrase on a piece of paper, but this exposes the property to the risk of fire and decay. Lastly, you can buy a hardware wallet and store the seed phrase in the device as well as on the backup plates, for the maximum security from both theft or device malfunction. To gain an additional layer of security, you should consider adding an optional passphrase to your wallet, which is often called the 13th or 25th word. A passphrase is an arbitrary string of characters which is added to your existing seed phrase to create a special wallet, which can only be accessed with the combination of seed phrase + passphrase. We recommend storing passphrase information separately from your seed phrase backup.

BORDER WALLET

Border wallets are an upgrade of memory wallets, as they are a method that facilitates the memorisation of a seed phrase by means of a pattern. All you need is to remember any pattern of words from the seed phrase and the last word of the seed phrase. This allows you to create any account you want and carry access to it in your memory.

HARDWARE WALLET

Hardware wallets are considered one of the most secure methods of storing private keys available. The private key is located on a device that is not connected to the internet and allows us to securely sign transactions. However, as the device can be used up or lost, it is advisable to keep the seed phrase, written on paper or a steel plate, as a backup.

There are several factors to consider when choosing a hardware wallet. For more detailed information, we recommend you read our blog post on hardware wallets.

Check out our range of top-quality hardware wallets here!

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