How to buy bitcoins online

Crypto-enthusiasts like to call bitcoins “digital gold. There is no denying that there are similarities between gold and bitcoins. Unlike state currencies, both are finite – gold is a raw material that is limited in its appearance, bitcoins are limited in their number to 21 million pieces: this is how bitcoin inventor Satoshi Nakamoto wanted to guarantee the stability of their value. However, at the beginning of the Corona crisis it seemed that bitcoin could not justify its reputation as an anti-crisis currency: its price fell sharply and dropped below USD 5,000. However, bitcoin recovered relatively quickly, and since then its chart has almost always gone up.

What is bitcoin?

Bitcoins and other cryptocurrencies are a digital means of payment – but so far they can only be used for purchases on a limited basis: at Rakuten, Subway or Microsoft, for example.

The technology behind this is something called blockchain. It protects the new transfer system against manipulation. Due to its decentralized operating principle, it is also beyond the control of states and banks – the legitimization of bitcoin transactions is done by the users of the network.

How does blockchain work?

Blockchain is also known as distributed ledger technology: it is a public and decentralized ledger. One block of such a blockchain consists of data, a hash – that is, a unique fingerprint of the block – and a hash of the previous block.

The data in the block depends on the blockchain: In the case of the Bitcoin blockchain, the data contains information about the sender, the recipient and the number of coins. If a third party changes the content of the block, its hash will also change and the blockchain will collapse.

What is a peer-to-peer network?

Blockchain uses a peer-to-peer network that anyone can join. The computers of the individual participants then check each block in the chain to ensure that the hash is correct. In this way, the system ensures that manipulation never goes undetected.

How does the proof-of-work mechanism work?

Theoretically, particularly powerful computers are capable of manipulating blocks and recalculating all subsequent blocks to disguise a forgery. The proof-of-work mechanism prevents this: it ensures that it takes at least a few minutes to create a new block. These days, the fraud would have been uncovered long ago.

Three ways to buy bitcoin

Meanwhile, it’s not just brave individuals who are buying coins; institutional investors have also discovered digital currencies. Many are investing their money in two of the most well-known cryptocurrencies, Bitcoin and Ethereum. Together, they have a market capitalization of about 60 percent of all digital currencies. Not surprisingly, therefore, almost every cybercurrency trading hub has Bitcoin and Ethereum in its wallet.

While they are actually available for purchase on every crypto platform, the differences between trading venues are huge. Some offer real bitcoins, others offer bitcoin ETPs on a securities exchange, and still others rely on bitcoin derivatives.

Buying real bitcoins

Investors can buy real bitcoins on traditional exchanges and trading platforms such as Binance. Exchanges sell coins directly to the buyer – the price depends on supply and demand. Marketplaces, on the other hand, are intermediaries; they only provide a platform for a transaction between buyer and seller. The price there also depends on the market, but the exact amount is determined by the seller.

Whoever buys real bitcoins actually owns the digital coins. It is up to them to decide whether to keep them on the appropriate crypto platform or transfer the cryptocurrency to an external wallet to use as a means of payment, for example, in an online store.

Buying from online brokers

Investors can also buy real bitcoins from some online brokers. Younger brokers, such as Justtrade or Trade Republic, have included popular cryptocurrencies – including bitcoin – in their portfolio. But there’s a catch: while cryptocurrencies can be traded easily and cheaply there, it’s impossible to withdraw Bitcoin to an external wallet. The private key, which provides exclusive access to the cryptocurrency storage location, remains in the hands of the external custodian.

Therefore, with these brokers, bitcoin is only suitable as a speculative asset. For most investors, this is usually enough, as the payment options with bitcoins are still limited at the moment. However, those who want to keep this opportunity should look for another provider.

Bitcoin ETPs

Another so-called neo-broker, namely Scalable Capital, offers bitcoin trading in the form of ETPs. These securities can be compared to stocks or ETFs. They are distributed through an exchange and can even be saved in an account. Therefore, they are suitable for investors who want to invest small amounts on a regular basis.

This form of investing also affects the taxation of profits: instead of being settled on bitcoins through income tax as usual, capital gains tax must be paid on them. This tax rate is usually lower and is automatically calculated by the broker.

Bitcoin derivatives

Bitcoin derivatives can be purchased from a variety of providers. For example, CFD broker Plus500 and online broker Etoro offer bitcoin CFDs. But banks also have bitcoin options and futures in their portfolio.

With derivatives, investors do not purchase the cryptocurrency itself, but only bet on its performance – this is possible for both gains and losses.

Those who also use leverage have the ability to multiply their chances of winning, depending on the amount of leverage – but leverage has the same effect on losing.

Conclusion

Thus, the relevant crypto platform has a decisive impact on how investors can trade bitcoin. But there are other differences: some providers have more coins than others, charge different fees and are regulated differently. So it’s worth making a comparison.When it comes to the sheer number of coins, Binance is a good place to start – you can trade more than 150 cryptocurrencies here. In addition to Bitcoin and Ethereum, you can also buy the popular Dogecoin there. Online broker Etoro has also included a popular coin with a dog meme in its offering.

Exchanges such as Kraken or Coinbase also offer a large selection of cryptocurrencies, but charge higher fees than Binance. With CIS providers, it’s basically the opposite. There are only a few digital coins, but BSDEX or Trade Republic are inexpensive. On the latter, investors can trade stocks and ETFs in addition to four cryptocurrencies. The same goes for online brokers Justtrade and Scalable Capital.

Nuri (formerly Bitwala) offers a feature – the platform combines crypto trading and banking. This includes a bank account and a debit card. Customers can convert Bitcoin and Ethereum directly into euros and receive them at Visa-enabled ATMs.

In most cases, trading on a crypto-exchange requires verification of the registered user. Individual providers use different methods for this – some do not even require identity verification up to certain amounts.

Identification procedures are, for example, Post-Ident or Video-Ident. Other trading platforms involve uploading an identity document, account confirmation or proof of residence address.

Deposit

After a user has successfully registered and, if necessary, verified, he/she can transfer money to his/her exchange account. Traders should make sure that crypto-exchanges cooperate with reputable partner banks: Preferably, they also provide deposit protection.

Payment options are often limited – a standard bank transfer is almost always possible, but usually takes several days. Money via credit card, instant transfer or PayPal can be obtained more quickly, but the fees are usually higher. An exchange that allows a particularly large number of payment options is Binance, for example.

Investment options

As soon as the money arrives in the account, you can start. Traders can either purchase a real coin or speculate on its characteristics – for example, through CFD trading or certificates.

Note: Those who trade derivatives such as CFDs often use leverage to increase their theoretical investment volume. This allows users to make high profits very quickly, but at the same time they can lose a lot of money in a very short time. Therefore, it is highly recommended for beginners not to trade with leverage.

However, for the long-term and practical use of bitcoin, it is recommended to actually buy bitcoins. Don’t worry: investors can also buy cryptocurrencies proportionally and don’t always have to buy a whole coin.

Tips

The purchase process itself is not particularly spectacular: the buyer decides how much he wants to invest, and waits until he is satisfied with the price. Once the purchase is completed, the coins become his property.

On marketplaces like Binance, the amount and quantity of coins are fixed. Once a trader has selected a purchase option, the site blocks the offer to other interested parties, and the buyer only has to transfer the money to have the coins credited to his wallet.

Depending on the exchange or trading venue, fees vary. Usually it is a small percentage of the amount traded.

Purse transfer

To securely store your bitcoins, it is recommended that you create or purchase an external wallet. Wallets can be digital, such as in the form of an app, or analogue in the form of a hardware wallet (cold wallet).

A private wallet contains the receiving address. Using it and a private key, the transfer is protected and it is impossible for the amount to go to the wrong account.

A transfer from wallet to wallet takes a few minutes. In the case of a purchase and sale transaction through the trading platform, the buyer and seller must pay a small fee for the transfer of money.

Sale and payment of bitcoin tax

If you want to sell your bitcoins, you can also do so on a cryptocurrency exchange or trading platform such as Kraken. Selling is as easy as buying.

But be aware: traders have to pay tax on profits from the sale of bitcoins over a certain amount. Cryptocurrencies are subject to the same tax requirements as other foreign currencies. Such private sales transactions are subject to the Income Tax Act.

What determines the value of bitcoin?

Bitcoin is the oldest and best-known cryptocurrency, with a market capitalization of more than USD 800 billion. In comparison, the market capitalization of Ethereum, the second largest digital currency, is just under USD 400 billion.

The price of cryptocurrencies, such as bitcoin, is governed by the principle of supply and demand. There are many factors that fuel demand: Many see blockchain technology as promising, and an increasing number of companies are investing in technical solutions: These include major banks BNP and HSBC, among others.

Bitcoin is also becoming increasingly popular as a means of payment. Shops and service providers are increasingly offering their customers to pay with bitcoin. For example, Paypal: The financial services provider allows its U.S. customers to buy and pay with bitcoin.

However, one of the main reasons for the repeated strong appreciation is investors hoping to get a return on their investment.

How to buy bitcoin with credit or debit card

The process of buying Bitcoin with a credit card is relatively simple and can be done on a variety of platforms. Here’s a step-by-step guide on how to buy Bitcoin with a credit card:

1. Choose a cryptocurrency exchange: There are many exchanges that allow you to buy Bitcoin with a credit card, some of the most popular are Coinbase, Binance, and Bitpanda. Choose an exchange that is reputable and has a user-friendly platform.
2. Create an account: Once you have chosen an exchange, create an account by providing your personal information and verifying your identity. This is a necessary step to comply with anti-money laundering and know-your-customer regulations.
3. Add your credit card: Once your account is set up, you will need to add your credit card information. This will include the card number, expiration date, and CVV code. The exchange may also run a small transaction to verify that the card is valid.
4. Buy Bitcoin: Once your credit card is added, you can buy Bitcoin by selecting the amount you want to purchase and completing the transaction.
5. Store your Bitcoin: After purchasing Bitcoin, it is important to store it in a secure digital wallet. Many exchanges have built-in wallets, but you can also use a hardware wallet for added security.

It’s important to keep in mind that there may be fees associated with buying Bitcoin with a credit card. These fees can vary depending on the exchange and can include a transaction fee, a credit card processing fee, and a currency conversion fee. Additionally, be aware of the credit card company policy, some of them don’t allow buying crypto and may cancel the transaction.

Another thing to keep in mind is that buying Bitcoin with a credit card is a bit more expensive than other methods, because of the extra fees and that the price of bitcoin can change rapidly, so it’s always better to check the price before buying.

Overall, buying Bitcoin with a credit card is a quick and convenient way to get your hands on the popular cryptocurrency. By following the steps outlined in this guide and doing your research, you can purchase Bitcoin safely and securely using a credit card.

How to buy bitcoin with paypal

When it comes to buying Bitcoin, one of the most popular methods is using PayPal. The process of buying Bitcoin with PayPal is relatively simple and can be done on a variety of platforms. eToro, Paxful, and LocalBitcoins are some of the most popular platforms that allow you to purchase Bitcoin using PayPal. To get started, you will need to create an account on one of these platforms and link your PayPal account. Once your accounts are linked, you can make a purchase by selecting the amount of Bitcoin you want to buy and completing the transaction through PayPal.

It’s important to keep in mind that there may be some limitations and fees associated with buying Bitcoin with PayPal. For example, some platforms may have a maximum purchase limit or a higher transaction fee for using PayPal. Additionally, it’s essential to ensure that the platform you are using is legitimate and secure before making any transactions.

Another thing to keep in mind is that PayPal is not a direct way to buy bitcoin, but it’s a way to buy bitcoin with the use of a middleman, that is why the process of buying bitcoin with paypal can be a bit more complicated than buying it directly with a cryptocurrency exchange.

Overall, buying Bitcoin with PayPal is a convenient and efficient way to get your hands on the popular cryptocurrency. By following the steps outlined in this guide and doing your research, you can purchase Bitcoin safely and securely using PayPal.

Instruction

How to buy bitcoin on cashapp

Cash App is a popular mobile application that allows users to send and receive money, pay bills, and buy and sell stocks and bitcoin. Buying bitcoin on Cash App is easy and can be done in just a few simple steps. Here is a general overview of the process:

1. Download and install the Cash App on your mobile device.
2. Sign in or create an account by providing your name, email address, and phone number.
3. Verify your identity by taking a picture of your government-issued ID.
4. Add a funding source: You will need to link a bank account or debit card to your Cash App account to buy bitcoin.
5. Once your account is set up, navigate to the “Investing” tab on the home screen, and select “Bitcoin.”
6. Enter the amount of bitcoin you wish to purchase and confirm the transaction.

It’s worth noting that Cash App may have different fees for buying bitcoin, and it’s important to check them before proceeding. Additionally, it’s important to be aware of the risks and volatility of buying bitcoin, and to only invest what you can afford to lose. Furthermore, the process may vary depending on your region, it’s always better to check the availability of the feature in your region.

How to buy bitcoin with apple pay

Buying Bitcoin with Apple Pay is a convenient and secure way to purchase the digital currency. Here is a general overview of the process:

1. Choose a platform: There are a few platforms that allow buying Bitcoin using Apple Pay. Examples include Cash App, Paxful, and Local Bitcoins. Research and select a platform that is available in your region and has a good reputation.
2. Create an account: Sign up for an account on the platform you have selected. You will need to provide personal information, such as your name, email address, and government-issued ID.
3. Add a payment method: Link your Apple Pay account to your account so you can fund your purchase.
4. Buy bitcoin: Once your account is linked, navigate to the trading page and select the amount of bitcoin you wish to purchase. You can also find a seller who accepts Apple Pay as a payment method on peer-to-peer platforms like Paxful or Local Bitcoins.
5. Confirm the purchase: Before the purchase is complete, you will be presented with a confirmation page that shows the details of the transaction, including the amount of bitcoin you are buying and the total cost. Review the details and confirm the purchase.

It’s worth noting that the process may vary depending on the platform you choose, and some may have different fee structures or verification requirements. Also, it’s important to be aware of the risks and volatility of buying bitcoin, and to only invest what you can afford to lose. Additionally, it’s important to check the availability of the feature in your region as it may not be available in all countries.

How to buy bitcoin on Binance exchange

Once registered, you will have access to quick and hassle-free bitcoin purchases via five methods:

Direct deposit from card

To buy, you need to go to the second menu item and there choose the necessary amount of deposit and “enter” money into the exchange. After that you will have bitcoins on the exchange’s spot wallet

P2P translation

To make an exchange using this method it is necessary to add a nart and confirm it on the exchange. It is important to add cards only of the person to whom the account on binans is registered. After that you need to go to p2p menu as I indicated above in the screenshot above, select the desired currency and make a transfer and select the desired merchant, example in the screenshot below:

1. Buy with cash – this method is absolutely identical
2. Via third-party service

How to buy bitcoin on Coinbase

The process for buying Bitcoin on Coinbase is relatively straightforward. Here is a general overview of the steps you would need to take:

1. Create an account: To buy Bitcoin on Coinbase, you will first need to create an account on the platform. This will involve providing your name, email address, and creating a password. You may also need to verify your identity by providing a government-issued ID or passport.
2. Add a payment method: Once your account is set up, you will need to add a payment method to fund your account. Coinbase currently accepts bank transfers, credit and debit cards, as well as PayPal. You will need to link your bank account or credit/debit card to your Coinbase account.
3. Buy Bitcoin: Once your account is funded, you can then buy Bitcoin. To do this, navigate to the “Buy/Sell” page on Coinbase and select the amount of Bitcoin you want to purchase. You can also use the “recurring buy” option to schedule regular purchases of Bitcoin.
4. Confirm the purchase: Before the purchase is complete, Coinbase will show you a confirmation page with the details of the transaction, including the amount of Bitcoin you are buying and the total cost. Check that the details are correct and click “Confirm Buy” to complete the purchase.

It’s worth noting that depending on the payment method and region, there may be additional steps, such as waiting for funds to clear, or additional verification steps. Also, Coinbase may have different fees for buying Bitcoin, and it’s important to check them before proceeding.

How to buy bitcoin under 18

The process for buying Bitcoin if you are under 18 years old can be more difficult as many platforms have age requirements of 18 or older. However, there are still ways to buy Bitcoin if you are underage. Here are a few options:

1. Use a parent or guardian’s account: If you have a parent or guardian who is willing to help you buy Bitcoin, you can use their account to make the purchase. This will require you to provide the parent or guardian’s personal information, including their ID or passport.
2. Find a platform that allows for users under 18: Some platforms may have lower age requirements or may allow users under 18 to create an account with additional verification steps. You will need to research to find such platforms and check the terms and conditions of the platform to confirm their age requirements.
3. Use a peer-to-peer marketplace: Peer-to-peer marketplaces like Localbitcoins, Paxful allow you to buy Bitcoin directly from other individuals. Here, you may not need to provide your age details and can complete the transaction with a private seller.

It’s worth noting that it’s not legal in most countries to trade Bitcoin or any other cryptocurrency if you are under 18 years old. Also, even if you are able to create an account and buy Bitcoin, it’s important to understand the risks and responsibilities that come with investing in cryptocurrency. It’s always better to consult with a legal guardian or a financial advisor before proceeding.

How old do you have to be to buy bitcoin

The age requirement to buy Bitcoin varies depending on the platform or exchange you are using. In general, most platforms require users to be at least 18 years old to create an account and buy Bitcoin. However, some platforms may have higher age requirements or may require additional verification steps for users under the age of 18. It is important to check the terms and conditions of the platform you are using to confirm their age requirements and any additional steps that may be necessary for users under 18. Additionally, it is important to note that some countries may have additional regulations regarding the purchase of cryptocurrency, and it is the responsibility of the user to ensure they are in compliance with all applicable laws.

Is it possible to buy Bitcoin anonymously without registration?

On the vast majority of cryptocurrency platforms, registration is required. If investors come across a trading site where this is not the case, it could be a fraudulent site – which is why it is absolutely recommended to only buy bitcoin on reputable cryptocurrency exchanges.

Those who still want to trade bitcoin anonymously can do so privately. This means that buyers and sellers get together off the platform and negotiate the transaction in bitcoins. However, such buying and selling transactions must also be reported on a tax return.

Process of buying partial bitcoin

Buying a full bitcoin can be expensive for some people, fortunately, it is possible to buy a partial bitcoin. Here is a general overview of the process:

1. Choose a platform: Many popular cryptocurrency exchanges, such as Coinbase, Binance, and Kraken, allow you to buy fractions of a bitcoin, also known as Satoshi (one-hundred millionth of a bitcoin). Research and select a platform that is available in your region and has a good reputation.
2. Create an account: Sign up for an account on the platform you have selected. You will need to provide personal information, such as your name, email address, and government-issued ID.
3. Add a payment method: Link your bank account or credit/debit card to your account so you can fund your purchase.
4. Buy partial bitcoin: Once your account is funded, navigate to the trading page and select the amount of bitcoin you wish to purchase. Most platforms allow you to buy as little as 0.0001 bitcoin.
5. Confirm the purchase: Before the purchase is complete, you will be presented with a confirmation page that shows the details of the transaction, including the amount of bitcoin you are buying and the total cost. Review the details and confirm the purchase.

It’s worth noting that the process may vary depending on the platform you choose, and some may have different fee structures or verification requirements. Also, it’s important to be aware of the risks and volatility of buying bitcoin, and to only invest what you can afford to lose.

Are there banks to buy bitcoin?

Classic branch banks such as Sparkasse or direct banks such as Comdirect do not yet offer proper cryptocurrency trading. Here, investors can only buy bitcoin derivatives such as futures raws and warrants. Nuri (formerly Bitwala) offers a special service: investors can open a bank account, use a debit card and simultaneously trade and store cryptocurrencies. Thanks to this, Bitcoin and Ethereum can be bought and converted into euros at any time to pay with them when needed.

FAQ