Best Places to Buy Bitcoin

A bitcoin exchange is a digital marketplace where you can convert currency like U.S. dollars into bitcoin. Many exchanges that support bitcoin also support other cryptocurrencies.

Every bitcoin exchange uses its own pricing and platform, which may instantly draw you to one exchange over another. Advanced bitcoin users may be interested in more details about the type of exchange. For example, some exchanges use centralized systems and user accounts, while others are decentralized with a focus on privacy. Depending on what you’re trying to accomplish, you may prefer one type of exchange over another.

In some cases, bitcoin exchanges connect buyers and sellers and act as a middleman or a broker. When you buy bitcoin using a bitcoin wallet, the transaction is recorded on the Bitcoin Blockchain, which publicly tracks bitcoin-based transactions. In some cases, exchanges may transact on your behalf and not deliver bitcoin to an external digital wallet.

Bitcoin exchanges are generally considered legal in the United States. However, it is your responsibility to report capital gains to stay on the right side of the law for your annual tax filing.

Bitcoin exchanges are a place you can buy and sell bitcoin. In many cases, the exchange also includes a wallet, which is the account that holds your cryptocurrency. When you use a centralized exchange online or through a mobile app, the exchange effectively will hold the bitcoin on your behalf.

Bitcoin also enables you to use external wallets outside of an exchange. These include computer-based and web-based “hot wallets” and offline “cold wallets” that work kind of like a USB security fob. If you buy bitcoin at most exchanges, you have the option to transfer your coins to any bitcoin wallet.

Bitcoin mining software helps maintain the Bitcoin Blockchain. Every transaction on the blockchain is public and recorded on countless computers around the world. When a transaction takes place, computers called miners race to record the transaction and get a small fee, which is paid by those who make the transaction.

When you run a bitcoin miner, you can effectively create your own bitcoin if you win the race and get paid the transaction fee. To improve your chances, you can join a pool with other miners. However, be aware that mining is power-intensive and could cost you more than it makes you. Bitcoin mining is best for those who are computer savvy.

Buying Bitcoin is safe whenever you use a vetted and respected platform. It’s important to research any platform where you’re considering purchasing Bitcoin before you decide to take the plunge. In terms of Bitcoin being a safe investment, the value fluctuates more frequently than many other traditional investments, meaning it's usually considered to be more risky, often much more risky. If you’re looking to support a decentralized method of making payments, Bitcoin can be valuable. However, there’s no guarantee or insurance protecting the value of what you're purchasing.

If you’re looking to buy bitcoin, follow these steps to get started:

1. Pick an exchange and wallet provider: The first step is to pick a place to buy and store your bitcoin. The easiest and fastest way to start is to choose an exchange that also offers secure bitcoin storage.
2. Open an account: Once you’ve picked your favorite exchange, you most likely will need to open an account and supply basic personal information. Some decentralized exchanges don’t require an account, but you’ll need an existing wallet and more technical know-how to use this type of exchange.
3. Fund your account: If you choose a provider that allows you to deposit fiat currency (dollars, euros, pounds, etc.), you’ll probably have to fund your account before you can make an order. You may be able to buy right away with a debit or credit card, but beware of extra fees.
4. Place an order: Now it’s time for the big moment. Place your order and wait for it to fully execute. Because blockchain processing takes some time, your purchase may not be instant. There are many factors that can lead this to take anywhere from a few minutes to longer than an hour to complete.

Once your order is done, you should see your new bitcoin in your bitcoin wallet or account. Congratulations! You're a cryptocurrency owner.