Beautifying Your Financial Picture

Three Things You Should Know When Buying Bitcoin For The First Time

by Darryl Nguyen

Bitcoin is no longer bought by those who are outside mainstream financial institutions. Today, large companies are now buying and selling this digital currency. You may be at the point where you want to buy Bitcoin, but before you do, the following are a few important things to understand.

There are several ways to buy Bitcoin with cash

The first time you buy Bitcoin, the least complicated way is to use cash in your bank account. You can buy this cryptocurrency through a financial platform, using an app on your smartphone. Crypto exchanges are also popular. They're called exchanges because you can both buy and sell Bitcoin. Because of the growth in the popularity of Bitcoin, you can now buy it on many online brokerage platforms. These are the brokers of stock options and futures, but who have added Bitcoin to their list of items they are a middleman for.

You will need a place to store your Bitcoin

Just as Bitcoin is a digital currency, you will need digital storage for your cryptocurrency. The most widely used crypto exchanges will offer a wallet for the storage of your Bitcoin. This may be a good idea in the beginning until you begin to understand more about what you can do with your Bitcoin, including selling it. There are wallets available that you can use to store your Bitcoin. You can use these wallets to buy things online, as well as buy and sell Bitcoin. For maximum security, you can use what is called a cold wallet. This is when you download your Bitcoin, with the use of software. Your Bitcoin is then stored on your computer. However, this is an advanced Bitcoin user technique and should be avoided in the beginning.

There are costs associated with Bitcoin

Any time you buy or sell your Bitcoin on an exchange or financial platform, you will pay a commission. This is no different from buying and selling stocks or other financial investments, but you need to shop around to find which commissions from which platforms you're comfortable with. Like anything else, you get what you pay for. Some platforms may have the lowest commissions, but the service may not be as good. Other places may have higher commissions but better customer service and have been in business for a long time. In addition to commissions, any profit you make from Bitcoin will be taxable. You need to keep track of how much money you are spending on Bitcoin, and how much you sell it for.

There are several places to buy Bitcoin with cash and digital storage. You should start simple, and use platforms where you can buy and store your Bitcoin. Keep in mind that there are commissions for buying and selling Bitcoin, and the profits are taxable. 

For more information about how to buy Bitcoin, contact a local company.