Bitcoin is the world's largest and first cryptocurrency. Launched in 2009 Bitcoin slowly started its ascendancy and then suddenly jumped to heights only few could predict. The current price of Bitcoin is $16,082 following the huge crypto crash which has been going on for the whole year of 2022. At its peak, Bitcoin was valued at $67,600. Despite this fall, Bitcoin is still a desirable token and firmly holds the status of king of cryptos. It has a big utility and is being used as a payment method by many.
"I see Bitcoin as ultimately becoming a reserve currency for banks, playing much the same role as gold did in the early days of banking. Banks could issue digital cash with greater anonymity and lighter weight, more efficient transactions." - Hal Finney
Bitcoin is a cryptocurrency that runs on its own blockchain. It was created in 2009 by a mysterious person named Satoshi Nakamoto. Nothing is known about Nakamoto and many consider that this is not his real name, there are also speculations that this is not a single person but a group. When Satoshi Nakamoto created Bitcoin in 2009 his main goal was to challenge the traditional financial system and institutions following the 2008 financial crisis. Bitcoin was created as a deflationary token as it has a max supply of 21 million tokens. It also has a halving mechanism implemented which cuts the rewards Bitcoin miners receive in half approximately every four years. Currently, Bitcoin trades at $16,082 which is considerably lower than its peak valuation of $67,600. This fall was caused by the huge crypto market crash which happened at the start of 2022.
Bitcoin is one of the closest cryptos to traditional fiat currencies. Bitcoin is now widely accepted by different merchants and businesses as a payment option. There are car dealerships, technology companies, jewelry and watch producers, and even insurance companies that accept Bitcoin as a valid payment option. Bitcoin is also used to diversify portfolios, and there are many investors who alongside bonds and stocks, have added Bitcoin to their portfolios.
"Bitcoin is here to stay. There would be a hacker uproar to anyone who attempted to take credit for the patent of cryptocurrency. And I wouldn’t want to be on the receiving end of hacker fury." – Adam Draper
Well when it comes to purchasing Bitcoin, it can be done through many different exchanges and platforms since it is the world's largest crypto asset. But every exchange does not offer the same services and because of that, we need to carefully consider what our main goal is when purchasing Bitcoin and only after that choose the exchange we will be using to purchase it. For example, if you believe in the longevity of Bitcoin and want to purchase it for long-term holding, you should always consider purchase fees. Also, since Bitcoin is so popular it can be easily traded with most cryptocurrencies, if you are looking for that and plan on trading with it, you have to look for exchanges that offer the best trading experience. Let us take a look at the general road map you have to follow in order to acquire Bitcoin.
Our first step when setting out to purchase Bitcoin is to find which exchange fits our needs and expectations. For this, we need to understand which services and features that exchanges offer us will be most useful and important for us. We might value low fees, security, payment options, and other relevant features. Once we find which exchange is best for us we will need to register on the exchange to be able to purchase Bitcoin, unless we are using decentralized exchanges.
If we choose one of the centralized exchanges, we will need to verify our identity in order to be able to use their services. This verification process is somewhat similar to most exchanges, with minimal differences. You will need the same documentation on any exchange, but some might ask for additional information and documents. This process is needed since centralized exchanges are being regulated by government bodies, and they are required to ask you for that information.
This is when we will be able to purchase Bitcoin. Once we pass verification, which can take a few minutes or even days, depending on the exchange, limitations will be lifted from our account, and we will be given different purchase options. It will be best to know which payment method you will be using before reaching this stage, since not every exchange will offer the same options, and you need to check beforehand.
Well we discussed the general actions you will need to take in order to acquire Bitcoin, but which places are the best for doing so. As we mentioned before each person will have different values and needs when buying Bitcoin and here we will go over some of the exchanges that offer one of the best services in a specific field.
When it comes to low deposit and purchase fees, there is no exchange that comes close to eToro. This is an interesting exchange, which alongside cryptos offers stocks and ETFs. When you just want to get your hands on Bitcoin and you don’t have anything planned for it, it will be most logical to purchase it for the lowest fees possible. When purchasing Bitcoin on eToro you will be paying 0% fees on conventional deposit methods such as credit cards and bank transfers. The only fee you have to pay is 1% when purchasing Bitcoin. Here we will show you how you can purchase Bitcoin on eToro.
Our first step of action should be to register our personal account on eToro. When doing this eToro will give us a few options. We can register using our email address or we can directly register using our Google, Facebook, and Apple accounts. If you are using traditional email registration you will need to come up with a username and password and that's it, the account will be ready for the next step.
Since eToro is a regulated exchange, they will be asking us to pass KYC verification and verify our identity in order to use their services. At first, they will ask general questions like what is our occupation, our trading budget, how long we plan on trading, and other similar information. Then we will be asked to upload one of the following documents ID, Passport, or Driving license. Then we just need to wait for eToro to verify the documents we provided and we will be given access to the exchange features.
To purchase Bitcoin on eToro we need to go to the explore tab and search for Bitcoin, alternatively, we can go to the crypto section there and look through the list of cryptos and find Bitcoin there. Once we find it we will be given an option to purchase Bitcoin, then we just need to select how we plan on paying and close to purchase.
Binance is known to be one of the best exchanges when it comes to trading features for Bitcoin. For those who are interested in whole blockchain technology and Bitcoin trading, this is the exchange to visit. Binance offers more than 100 spot trading pairs which include Bitcoin, this makes the trading experience smooth and gives us huge opportunities. Binance also offers us options to exchange Bitcoin for any other crypto directly and vice versa with no fees. Binance also has great futures and margin trading options for Bitcoin to increase our profits.
Just like any other centralized exchange, we need to create our Binance account in order to use their services. When creating a Binance account we can use two different methods. Email and mobile numbers, to register our accounts. We simply need to enter one of those and come up with a strong password. Then we will be sent a confirmation code on either email or our phone depending on which we used and once we confirm our registration account will be open.
Just like eToro, we need to pass KYC verification in order to access most of the Binance features. This process is somewhat more simple here. First, we need to enter our personal information such as our name, surname, and address, and then upload the documents which verify our identity. Then we need to wait for Binance to process our documents, it can take up to 24 hours but it's usually done within 1-2 hours.
Purchasing Bitcoin on Binance is a simple process that anyone can do without any problems. Binance has a simple Buy Crypto option at the top menu. There we select which payment option we want to use, then we select that we want to purchase Bitcoin and how much we want to purchase, and after that, we simply follow the instructions and finish the transaction. Once the transaction goes through we will see Bitcoin in our Binance wallet. One of the best things that Binance also has is that you can use PayPal as a payment method which most exchanges don’t offer.
Bitcoin is the world's largest crypto so finding an exchange that offers Bitcoin staking will not be a problem, but when it comes to the best exchange for us it is Kraken. Staking Bitcoin is done off-chain which means that it is not used for validations, since Bitcoin uses a proof-of-work protocol. Kraken might not have the highest returns when it comes to staking Bitcoin, but what they have is that you are not committing to a certain period and can unstake your tokens anytime you want. This removes the biggest risk of staking which is crypto losing value, while your tokens are locked up and you don’t have access to them. When you stake Bitcoin on Kraken you can opt-out any time you wish and save yourself from Bitcoin market crashes, just like the one which happened earlier this year.
To start using the Kraken staking function, you first need to create an account. To create a Kraken account, you will need to enter your country of residence, username, email address, and password in the registration form and then confirm your registration request through the link sent to your email address.
Just like any centralized exchange, Kraken also asks us to pass an additional verification process in order to gain access to most of the exchange features. For this verification, Kraken will simply ask us for our cooperation and a government-issued document that confirms our identity. There is another verification option where we need to provide our financial information and this removes almost all limitations from us, but for most traders, this verification step won’t be necessary.
To purchase Bitcoin, Kraken has a Buy Crypto option. Once we go there we will be given a list of cryptos available for purchase. There we simply select Bitcoin and use the payment option we like the most. Once the payment goes through, Bitcoin should appear in our account wallet.
Most new traders believe that it is best to keep your Bitcoin on the exchange wallet where you purchased it, but it might not be the case in some situations. For example, if you are purchasing Bitcoin on Binance to trade with it, then yes it will be best to keep your tokens there, but if you are buying it for its utility it might be best to transfer it to a different exchange or even personal wallet. Here we will give you a few good options, as to where you can keep your Bitcoin.
Bitcoin is the closest crypto asset to traditional fiat currencies. There are many different services and businesses that accept Bitcoin as a means of payment. If you want to use this interesting feature of Bitcoin and implement it in your day-to-day life, storing your Bitcoin on Crypto.com will be the best option. Crypto.com has its own Visa card which gives you the ability to instantly convert Bitcoin to fiat currencies, or even pay with Bitcoin directly. This is a great feature that will be useful to many people.
If you are putting a big investment into Bitcoin you will most likely want to store it as securely as possible. Trezor Model T is one of the best options for doing so. This is a hardware wallet, which means that it is not connected to the internet and is impossible to hack. This is a Bluetooth wallet and if you want to access your Bitcoin you simply have to connect it with your computer or mobile phone using Bluetooth. Trezor is in partnership with Exodus wallet, and you will be receiving one of the best features when it comes to hardware wallets.
| Trezor Model T | Crypto.com | |
|---|---|---|
| Security | Dissconected from the internet and impossible to hack | Uses two-factor authantication |
| Price | $250 | Free |
| Benefits | Strong security and compatibility with one of the best hot wallet providers | Implement Bitcoin to your day-to-day transactions |
| Number of available cryptos for storage | 1200+ | 250+ |
| eToro | Binance | Kraken | Crypto.com | |
|---|---|---|---|---|
| Purchase options for Bitcoin | Fiat & Crypto | Fiat & Crypto | Fiat & Crypto | Fiat & Crypto |
| Fees | 0% + 1% when purchasing Bitcoin | SWIFT transfer - Free; Signet transfer - Free Credit Card - up to 2% | ACH deposits - 0.5%; SWIFT - Free; Debit/Credit Card - 3.75% + $0.25 | SWIFT transfer - Free; Signet transfer - Free Credit Card - up to 2% |
| Allows Bitcoin Staking | no | yes | yes | yes |
| Number of trading pairs available for Bitcoin | 20 | 100+ | 50+ | 50+ |
| Trading options for Bitcoin | Spot | Spot, Margin, and Fututres | Spot & Margin | Spot, Margin, and Futures |
| Withdraw fees for Bitcoin | $5 + additional conversion rates if withdrawal is not in USD | SWIFT transfer - $15; Signet transfer - Free Credit Card - up to 2%
Direct Bitcoin withdrawal - 0.0002 BTC | ACH - Free; SWIFT - $4
Direct Bitcoin withdrawal - 0.00001 BTC | SWIFT transfer - $15; Signet transfer - Free Credit Card - up to 2% Direct Bitcoin withdrawal - 0.0001 BTC |
| Security | Regulated exchange with two-factor authantication and crime insurance | Multi-factor authentication, use of cold wallets and crime insurance | Two-factor authentication, multime insurances | Uses cold wallets, two-factor authentication, crime insurance |
"Bitcoin will do to banks what email did to the postal industry" – Rick Falkvinge
Bitcoin is the world's largest cryptocurrency so investing in it should be a good option for most traders. What makes Bitcoin a good investment compared to most other cryptocurrencies is that these cryptos greatly depend on Bitcoin. Whenever Bitcoin prices go down, most cryptos follow suit and vice versa. Another feature that makes Bitcoin investment worthy token is its deflationary nature. Bitcoin has a max supply of 21 million tokens and the rewards that miners receive get cut in half approximately every four years. What this means is that it is a scarce token that can not exceed max supply so as time goes on and acquiring new tokens becomes harder prices are predicted to go up. But Bitcoin also has some negatives, for example, it uses energy intensive and expensive proof-of-work protocol which makes Bitcoin transactions expensive and slow. Because of this, some experts suggest that cryptos that use much faster and cheaper proof-of-stake protocol will one day overtake Bitcoin. So the decision comes down to you, what do you believe in?
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Yes, you can purchase Bitcoin using PayPal on some exchanges. The most notable exchanges that accept PayPal payment options are Binance and Coinbase. But this option might not be available for everyone and usually exchanges only provide this feature for American users.
Each exchange will have a somewhat different process of converting Bitcoin into cash. For example, if you use Binance, you can use their P2P trading platform and sell your Bitcoin to someone for fiat currency which will be deposited in your bank account. Some exchanges like Crypto.com offer direct swaps of Bitcoin to traditional currencies such as USD and EUR which you then can withdraw to your bank account.
If you are an American citizen you have to pay taxes on Bitcoin but not always. When you purchase Bitcoin and hold it, even if prices go up, you are not required to pay taxes as long as you don’t trade with that. But as soon as you make a transaction it will be subjected to capital gains or losses. If you want to learn more about crypto taxes you can read our guide.
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