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 bitcoins. 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.

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WHERE TO START?

For many, buying bitcoins for the first time is a big step. Problems often arise with the improper storage of bitcoins, which can quickly lead to loss of ownership. There are also many fake sites offering to buy 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, check for yourself!”
which dictates that each individual should verify information for themselves, rather than taking the word of others.

We offer translated world bitcoin literature

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CHOICE OF EXCHANGE OFFICE

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 the remaining 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:

When choosing an exchange bureau, you should look at the way they do business and the fees they charge for individual purchases and transactions. Some exchanges, such as BitStamp and Crypto.com, charge fixed fees when transferring funds from the exchange to external bitcoin addresses, while others charge percentage fees. For example, exchanges with fixed fees are more favourable for larger amounts, while those with percentage fees are more suitable for smaller purchases and transfers. The same applies to individual purchases of bitcoin, where a fixed amount is often charged in addition to the percentage fee. Relai App is considered one of the exchanges with the lowest purchase fees, and they have recently implemented lightning transfers, which are much more favourable in terms of transfer costs than any other exchange that does not offer this. It should be noted, however, that the Relai App is currently only available for Android users in Slovenia.

Strike is currently the best platform for buying, storing and transferring bitcoin in the EU area. Strike’s main advantage is that they focus solely on offering bitcoin services, thus avoiding the need to manage a myriad of different crypto coins, which raises the risk level of the exchange and shortens its lifespan, as errors and user harm can occur quickly. Strike has for many years offered exceptionally good bitcoin services such as buying, selling, transferring via lightning or the bitcoin blockchain, automated purchases, cost averaging (DCA), etc.

Main advantages:

  • The descending scale of commissions on regular shopping
  • Free on-chain download for your own safekeeping
  • Integrated lightning wallet with lightning address
  • Instant SEPA deposits and withdrawals
  • Excellent customer support

We recommend using the Strike platform in combination with non-banks such as N26 or Revolut, as they consistently allow funds to be transferred via the instant SEPA platform, which means that funds can be transferred to and from Strike even outside bank opening hours. In this way, bitcoin can be bought or sold in a matter of moments, allowing us to live our lives on the bitcoin standard.

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MAKE A PURCHASE

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 TRR or. make your purchase using your online shopping card. Some exchange offices also offer other purchasing options. A TRR 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-off purchase in your chosen value. You should be aware of the fluctuations in the market value, which can fall or rise by several percentages in the space of a few days.

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

COST AVERAGING STRATEGY

The cost averaging strategy (cost averaging, cost averaging, cost averaging, cost averaging, cost averaging)
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 immediately move to the next step – STORING YOUR OWN FUNDS.

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OWN FOOD

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 safekeeping.

There are several types of bitcoin storage, 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 BAGS (brain wallet)

Memory 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 bitcoins. 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.

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

Hard 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 spare.

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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Machine wallets

How do I transfer funds from the exchange office to the machine wallet?

As this is a common question for many beginners, we have prepared a short description of the transfer process using the example of the Strike app and the BitStamp exchange:

Strike

1. PREPARING YOUR WALLET FOR TRANSFER

Plug the wallet into your computer and start the software. Select the “receive” option in the software to receive funds on your device. Our address and a QR code of our address will be displayed on the device and on the screen. The hardware wallet will warn us that we need to compare the address printed on the computer with the address printed by the hardware wallet to check that they match. If by any chance the address on the computer is different from the one printed by the wallet, we have been the target of a computer virus. In this case, we need to change the computer from which we are connecting to the hardware wallet. Remember, we can only ever trust the information printed by the hardware wallet! Once we have verified the address, we can confirm it and copy it to the clipboard to proceed to the second step.

2. SELECT THE FUNDS TO BE TRANSFERRED

Open the Strike app at the same time. The Strike app is divided into two main sections, Bitcoin (₿) and Cash (€), which can be switched between at the bottom of the app. To transfer bitcoins to your own storage, select the Bitcoin (₿) section and search for “send”, then select the first option (Bitcoin wallet). If you selected the second option (Username), you would be able to send the funds to other Strike users or via the lightning network.

When you select the first option, you will be taken to a pop-up window to scan the QR code that the hardware wallet displayed in the first step. We can scan the code, or paste our bitcoin address from the clipboard if we copied it from the hardware wallet in the first step. Once the app has read the address, we specify the amount we want to transfer and choose the fee we want to pay. Strike currently offers three fee classes, depending on the urgency of our transaction:

  • priority (highest fee and priority transfer, which means that our transaction will be sent immediately to the network and we will be included in one of the first following blocks)
  • standard (medium fee and inclusion in the block within a few hours, which usually takes less than 1h)
  • flexible (Strike offers free transfer of funds to an external wallet if you wait up to 24 hours. This is one of the biggest advantages of Strike, especially when we are in a period of high fees)

3. REGISTRATION OF THE ADDRESS

Once again: when entering an address, it is extremely important to follow the one displayed by the device (hardware wallet). You can enter it by copying and pasting the record on your computer or by scanning the QR code on the screen, but make sure it is the same as the one on the device. A virus on your computer could turn it into a fake one!

4. AUTHENTICATION AND TERMINATION OF THE TRANSFER

Once we have successfully entered and verified the address and other details, we confirm the sending as instructed by the app and wait for the funds to arrive in our digital account. When transferring larger amounts, it is always advisable to try transferring a smaller amount first and then the whole amount to make sure we have entered the right address and that there is no mistake on our part. For example, if we had entered one wrong character, we would have lost the funds forever, as the transfer of bitcoins along the blockchain is irreversible.

When we select a priority or standard fee class, our transaction will very soon be visible within the software that we use to access our hardware wallet in the first step. At that point, all we have to do is wait for the network to validate the block in which our transaction has been included so that the funds land at our address. Initially, the status of our transaction will be marked as unconfirmed, as we need to wait for at least two more blocks to be created after our block in order to be 99.9% sure that our transaction is complete. The more consecutive blocks that occur after a block involving our transaction, the higher the probability that our transaction can no longer be cancelled. If our transaction were to be cancelled by chance, it would land back in the queue and be included in a future block. This happens extremely rarely, so there is no reason to worry as the transaction always finds its way to the selected address.

BitStamp

As this is a common question for many beginners, we have prepared a short description of the transfer process using BitStamp as an example:

1. PREPARING YOUR WALLET FOR TRANSFER

Plug the wallet into your computer and start the software. Select the “receive” option in the software to receive funds on your device. Our address is displayed on the device and on the screen.

2. SELECT THE FUNDS TO BE TRANSFERRED

Simultaneously, open the BitStamp website and search for the “withdraw” option that allows you to transfer funds and select the desired funds. Specify the amount you want to transfer and enter the address from your wallet to which you want to transfer the funds.

3. REGISTRATION OF THE ADDRESS

When entering an address, it is extremely important to follow the one displayed by the device (hardware wallet). You can enter it by copying and pasting the record on your computer or by scanning the QR code on the screen, but make sure it is the same as the one on the device. A virus on your computer could turn it into a fake one!

4. AUTHENTICATION AND TERMINATION OF THE TRANSFER

Once we have successfully entered and verified the address in the exchange office, we confirm the withdrawal with two-factor authentication as instructed by the app and wait for the funds to arrive in our digital account. When transferring larger amounts, it is always advisable to transfer a smaller amount first and then the whole amount to make sure we have entered the correct address and that there is no mistake. If we were to enter one wrong character, we would lose the funds forever, as the transfer of bitcoins along the blockchain is irreversible.

Once BitStamp has initiated the transfer of our funds, our transaction will very soon be visible within the software that we use to access our hardware wallet in the first step. At that point, all we have to do is wait for the network to validate the block in which our transaction has been included so that the funds land at our address. Initially, the status of our transaction will be marked as unconfirmed, as we need to wait for at least two more blocks to be created after our block in order to be 99.9% sure that our transaction is complete. The more consecutive blocks that occur after a block involving our transaction, the higher the probability that our transaction can no longer be cancelled. If our transaction were to be accidentally cancelled, it would end up in the queue again and be included in a future block. This happens extremely rarely, so there is no reason to worry as the transaction always finds its way to the selected address.

Transfer of funds is not free

Don’t forget about the fees that exchange offices charge for transferring funds. For example, BitStamp charges a fixed fee of 0.0005 BTC to transfer bitcoin, which is around €30 at the current exchange rate. This makes it useful for transferring as large amounts as possible, but the problem is also when we want to transfer a smaller test amount. For smaller amounts, it is wiser to invest via exchange offices, which charge a percentage of the amount transferred.

Watch the videos below to help you understand how to transfer funds into your own custody: