It’s a subject Consett Magazine has covered in several other articles in the past, but now more than ever I think it’s important we revisit the world of Cryptocurrency.
In particular the world of Bitcoin.
Bitcoin’s price is up 63,293.42%* since its inception back on 9 January 2009 (10 years ago).
This week alone the Bitcoin price is up a staggering 23.09% on Coinbase.
There are many ways to get bitcoin (including mining it, but we’ll not cover mining in this article) but I think the easiest and quickest way is to buy bitcoin is through an exchange like Coinbase.
So, How Can You Buy Bitcoin?
What you need before you get started:
- A valid photo ID (such as a driver’s license or Passport)
- A bank account, debit or credit card
- Phone or Computer to visit Coinbase
You don’t need to have a balance to have a Coinbase – You can simply use it to purchase bitcoin then send it to your own private wallet, leaving a zero account balance at Coinbase. I firmly believe the safest way to hold bitcoin is in your own private wallet, in case the exchange gets hacked.
You will need valid identification, such as a drivers license or photo ID. Some exchanges require a selfie of you holding your identification card. You will upload your ID directly on the Coinbase website.
For security purposes, Coinbase does not allow you to send your ID by email.
You need a bank account or credit card.
During due diligence, Coinbase will send a few pennies to your bank account, then you must verify the amount to Coinbase. All this is for verification and authentication purposes. Like any bank or money transmitter, Coinbase must comply with Know Your Customer/Anti-Money Laundering laws.
Open Your Coinbase Account
Once you are ready to sign up for an account, go to the account sign-up page, where you will see something similar to this:
Simply fill in the required fields to open your account. You will be prompted to upload your ID and verify your bank account or credit card as you go. Simply follow the prompts as they appear to complete account set up.
Once you have opened an account at Coinbase, you will see its dashboard with the price of bitcoin, Ethereum, and Litecoin, along with a chart of bitcoin.
To buy Bitcoin, scroll up to the top of the main Coinbase page and click on Buy/Sell. A screen should look like this:
You can specify a dollar amount of bitcoin you want and the website will display the amount of BTC you would receive for that amount. In this case, the purchase is for $200 worth of bitcoin or 0.01369407 BTC.
You will see the order to buy 0.0141 BTC for $200, with a $7.67 Coinbase fee, which is 3.8 percent of the purchase price. The price of a bitcoin was $13,627.81 at the time of the sale.
Hit “Confirm Buy.” Then you will see a green check indicating the purchase was successful.
Return to the dashboard and there will be a summary of the account and its activity, including the purchase of $200 worth of Bitcoin.
Setting Up Regular Buys
One approach to buying an investment with a fluctuating price like bitcoin is dollar cost averaging. Dollar-Cost Averaging is a strategy that allows an investor to buy the same dollar (or any currency) amount of investment on regular intervals. The purchases occur regardless of the asset’s price. Dollar cost averaging works well for investors who are buying stocks or cryptocurrencies on a fixed monthly budget.
Coinbase allows you to set up this kind of recurring transaction straight from your dashboard if you wish. Simply check the “Repeat this buy” box on the Buy/Sell page and choose the frequency of your recurring purchase.
Coinbase is a good way to get started with buying bitcoin and altcoins because of its ease of use. It also offers sales of Ethereum, Litecoin and Bitcoin Cash.
Coinbase does have its limitations. And it can be overwhelming to new customers and it takes a while to get approved for trading on its site. Secondly, Coinbase does not yet offer Ripple XRP or several other popular currencies like Dash.
The cryptocurrency world is huge, with about 1,400 altcoins currently.
This is still a risky investment, but the technology is certainly interesting and that’s why I like to invest my time into educating myself about cryptocurrencies (mainly Bitcoin), and how they could transform our lives in the not so distant future.
DISCLAIMER: This is not investment or financial advice. Do your own research. I’ve been using Coinbase to buy, sell, and store digital currency (like Bitcoin). You’ll get £7.69 worth of Bitcoin when you sign up with my invite link and buy or sell at least £76.95 of digital currency: https://www.coinbase.com/join/58fe0f10c449af7c282f3d55
In my own opinion, buying bitcoin is still a risky investment. The technology behind it is certainly interesting and that’s why I like to invest my time into educating myself about cryptocurrencies (mainly Bitcoin), and how they could transform our lives in the not so distant future.