Set up a Bitcoin wallet
Bitcoin has had a very turbulent few weeks. A bear market has taken over the cryptocurrency world which has caused the price of Bitcoin to drop very firmly. With the bubble looking to come to an end, could this be a good time to buy in? Time will tell.
So, how can you actually get hold of Bitcoin? After all, your local bank branch won’t be handing out the digital currency any time soon. We show you where you can exchange your cash for the money of the brave new, online, world.
Set up a Bitcoin wallet
Before you can buy any Bitcoins, you’ll need somewhere to keep them. This is done by creating an online wallet. These are offered by a number of online sites, often with apps for Windows, macOS, Linux, Android, and iOS.
The most important things to look for when selecting a wallet is security and ease of use. The more secure the better, as Bitcoin theft has been a problem in the past. This was proven in spectacular fashion in 2014 when the most popular exchange in the world was brought to its knees after 850,000 Bitcoin were stolen.
Be sure to find a wallet provider that allows two-step authentication, always use a strong password (don’t forget it!), and if possible look for the ability to backup your wallet offline.
Most modern providers offer high-levels of security, but in your mind you need to think of a Bitcoin wallet as an actual wallet. If you lose your cash, you’re not getting it back. The same is true of Bitcoin. So protect it judiciously.
Take your time, do some research on any potential wallet providers you prefer, and things should go smoothly.
For more details on how to secure your wallet, and the potential risks involved, read this
helpful guide on the
Bitcoin.org site.
Do I have to buy Bitcoin from an exchange?
The easiest way to buy, and sell, Bitcoin is on one of the many exchanges now in operation around the world. These function in the same way as popping down to the Post Office to buy foreign currencies when going on holiday, except everything takes place online.
You’ll need to create an account on the exchange, and enter your bank details so payments can be made to and from your account. Many also support PayPal if you’d prefer to keep everything digital.
Some of the most trusted exchanges include the aforementioned
Coinbase,
eToro, and
Coinify, but you can search around for others too.
As the value of a single Bitcoin at the time of writing this article is around the £5000 mark, you probably won’t be buying a whole one to start with. Instead you’ll purchase a percentage based on value.
Therefore, if you want to invest £100, then the exchanges will sell you £100 worth of Bitcoin, no matter what percentage that amounts to. These can then be spent online at supporting outlets, or you can trade them on the exchange.
For more details on these digital markets read our Best Bitcoin Exchanges guide.
Buying Bitcoin from a cash machine
Believe it or not you can actually buy or redeem Bitcoins at cash machines around the UK, US, Canada, and other countries worldwide.
These kiosks are connected to online exchanges and allow users to make purchases by depositing cash into the machine itself. They can also dispense the local currency in exchange for Bitcoin already bought online.
You can see the locations of Bitcoin ATM on the very handy Coin ATM Radar site.
One thing to bear in mind though, is that there have been several reports of quite high transaction charges when using the machines. So, if you do want to get your Bitcoin from a hole in the wall, be sure to check what it will cost before you begin.
Now you just have to decide whether to head out into the marketplace to spend your Bitcoins, or hang onto them for a while. Those who opted for the latter a few years ago are very happy they did so now.
