How to buy Bitcoin (BTC) ? Ultimate Beginner Guide

You are not a client of JP Morgan but you also want to have your Bitcoin fund? Do you want, like Goldman Sachs, to give Bitcoin its letters of nobility? So you’ve come to the right doorbell, and you’re going to open this door yourself, because there’s nothing simpler. Buying bitcoin is easy and we will give you the basics to get and use it with confidence.

Contents of the guide “How and where to buy Bitcoin”
  • What is Bitcoin and how does it work ?
  • Who create the bitcoin?
  • What are the characteristics of Bitcoin?
  • How is the bitcoin price determined?
  • Selection of the best sites in 2022
  • Should You Buy Bitcoin? Forecast, risks and strategies.
    • Trader Bitcoin: what taxation? How to declare?
  • Is buying Bitcoin anonymously possible?
  • Where to store Bitcoins after purchase?
  • How to buy Bitcoins? Frequently Asked Questions
  • How to buy bitcoins? Step-by-step tutorial with Binance
    • Prerequisites and tips before buying bitcoins
  • What is Bitcoin?
  • How does bitcoin work? What is Bitcoin mining?
  • Conclusion: The Best Way to Buy or Trade Bitcoin

Bitcoin was created by a mysterious Satoshi Nakamoto who published the White Paper in 2008, he produced the first bitcoins in 2009, and the first purchase in BTC took place in 2010, 2 pizzas bought 10,000 BTC, a value of 36 euros or 0 €.0036 per bitcoin, 11 years later it reached $69,000.

2008, after the subprime crisis – systemic crisis of international scope – our system based on the deregulation of the financial markets, and on their self-regulating efficiency, almost collapsed, it was then that a mysterious Satoshi Nakamoto entered the scene so that such a tragedy never plays out again.

Satoshi Nakamoto believed that governments had shown their incompetence in monetary management, by creating currencies beyond the reach of the people, which printed at will, corrupted the heart of our interconnected economies.

Nakamoto then created the Bitcoin network (with a capital B) distributing bitcoin tokens (with a lowercase b), a digital currency, universal, limited, and inviolable, then once this enterprise was completed, Nakamoto disappeared, and no one ever knew his identify. But Satoshi disappeared for a good reason: that no one can ever control this system by the force of his influence, only the vote between the owners of bitcoins can allow the update and modification of the functioning of the network, therefore the basic rules such as the limit on the number of bitcoins to 21 million cannot be changed, except perhaps if the owners decide otherwise.

So what is Bitcoin? Bitcoin is a currency that wants to be from the people for the people, a digital currency entirely generated on a distributed network, an economical, fast, transparent and secure currency. To fully understand the philosophy behind this first cryptocurrency, we can only recommend ARTE’s free animated documentary series which traces the entire thrilling genesis of the all-powerful Bitcoin.

WHAT IS BITCOIN AND HOW DOES IT WORK ?

bitcoin mining

Bitcoin is a cryptocurrency that is traded and stored electronically. Nobody controls it. Bitcoin is not printed, for example, traditional currencies such as the dollar and the euro it is produced by people and companies around the world, by running computers that are used by software to perform calculations and solve complex equations.

Who create the bitcoin?

The idea of bitcoin was first proposed by a software developer named “Satoshi Nakamoto”, whose idea was to build an electronic payment system based on mathematical immutability.

The idea was to produce the currency independently of any central authority, and to have the currency traded electronically, instantly, and with low trading fees.

People around the world use computer software that follows a mathematical equation to produce bitcoins. This equation is available to everyone, where anyone can view it.

The software used is also open source, which means that anyone can take a look at it and make sure that it actually does their part

What are the characteristics of Bitcoin?

Bitcoin has important characteristics that distinguish it from traditional currencies.

1.Decentralization

The Bitcoin network is not controlled by a central authority.

Each device that mines Bitcoin and processes the trades forms part of the network, as these devices work in coordination with each other. This means that (in theory), no one can manipulate monetary policies, cause a crash, or simply decide to hold people’s money.See also  The Best cryptos to buy this week! (May 2022)

2.Easy to set up accounts

Traditional banks require a lot of procedures to open a bank account, and opening a business account to make transfers is another level of bureaucratic complexity.

On the other hand, anyone can create a Bitcoin account within seconds, without any procedures or even fees.

3.Secret

Anyone can have any number of accounts, and these accounts are not linked to any names, numbers or personal identifiers.

4.Fully transparent

The Bitcoin network stores the details of every transaction made through it in a huge ledger called the Blockchain.

If you own a bitcoin account, anyone can know how much you have in that account, but no one knows that this account belongs to you.

There are many measures people can take to protect their privacy, including using multiple bitcoin accounts, and not transferring large amounts of money using a single address.

5.Low Transfer Fee

The fees charged for transferring funds from one account to another using Bitcoin are lower than their traditional counterparts.

6.Quick

Bitcoins can be transferred from one account to another and delivery is usually done within minutes. The funds arrive as soon as the Bitcoin network processes the transfer.

7.Its operations are irreversible

When sending an amount in Bitcoin, the transaction cannot be undone, unless the recipient returns the amount.

HOW IS THE BITCOIN PRICE DETERMINED?

Bitcoin is used as legal tender in El Salvador, but not in a majority of countries. Not everyone agrees on defining Bitcoin as a currency. On the other hand, it is unanimous that Bitcoin is speculative and therefore its price fluctuates. Why ?

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Bitcoin‘s price responds to supply and demand.

In economics, we often talk about supply and demand . These two factors are key in assessing the value of an object or an asset.

Bitcoin also responds to supply and demand. Indeed, if the demand increases , that is to say that there are many players who want to buy Bitcoin, then the price goes up . This phenomenon will be accentuated when supply is low . If there is little Bitcoin available for purchase, players will have to fight to buy it and therefore drive the price up .

Conversely, if supply increases and demand decreases , the price of Bitcoin will fall .

Bitcoin is the result of supply and demand. The price moves according to these two elements.

The various factors that influence supply and demand

There are elements that will tend to alter the state of supply and demand. Here are some examples.

Bitcoin has a limited number of tokens: the consequences on the price.

Bitcoin will have a maximum total number of 21 million tokens . According to Chainalysis, there would be 3.7 million Bitcoin lost , or about 20% of the current quantity in circulation. There will be more bitcoins lost in the future and this will lower the available supply .

The Bitcoin adoption curve is increasing and follows that known by the internet. If it continues at the current pace, there should be 1 billion users in 2024 and 3.7 billion users in 2030 . The more Bitcoin is used by players, the more the price should increase. If the demand is increasing while the available supply is decreasing, then the price should increase in the coming years .

Here is the Bitcoin adoption curve. It strongly resembles that of the Internet.

Price = Capitalization / number of tokens

Since the number of tokens is more or less fixed, the price depends on the capitalization . At the moment, the capitalization is low compared to other assets such as Apple, Microsoft or gold. The higher the capitalization, the more complicated it is to move the price. The significant volatility that we currently know about Bitcoin is set to decrease over time as Bitcoin is adopted .

The halving phenomenon: Bitcoin miners participate in the adjustment of supply and demand.

Bitcoin miners are there to accept transactions and secure the network . They have a crucial role and for this they are paid in Bitcoin. If the price of Bitcoin is below (or close to) the cost price, miners will tend to hold on to their Bitcoin . There will automatically be fewer offers . During significant bullish phases, they will be able to distribute their Bitcoin to cover their expenses and make a profit.

Then Satoshi Nakamoto introduced a system called the halving . As explained above, miners are paid in Bitcoin. Their remuneration decreases over time, it is halved at each halving. The halving is a phenomenon that happens every 210,000 mined blocks (about 4 years). This phenomenon makes it possible to increase the price . We notice that Bitcoin has increased in value following these events.

The sentiment of market players

The sentiment of the players is very important in the financial markets, Bitcoin is no exception to this. Indeed, when the evolution of the price is strongly on the rise (bullrun) or strongly on the fall (bearmarket) this will change the behavior of the actors which will thus make the price fluctuate.

The expression FOMO (Fear Of Missing Out) or the fear of missing the train in French is a behavior that causes the investor to buy an asset at the top of the market .

At first, when players flock to an asset, demand greatly exceeds supply , so the price increases . However, one must consider players with huge wallets called whales . These large wallets need liquidity to be able to sell Bitcoin. When Bitcoin rises sharply in value and huge numbers of players flock to the market, there is enough liquidity for the whales to sell. This is often the top of a bull market .

Conversely, when the price falls sharply , the psychology of investors is negative. The players therefore believe that Bitcoin will continue to fall and they can increase the selling pressure . This selling pressure will be over when large portfolios have an interest in buying the sales of small holders.

The derivatives market

The derivatives market follows the spot market, but sometimes it will be the cause of large fluctuations in the spot price.

This market makes it possible in particular to be able to use a leverage effect . Leverage can allow less capital to be allocated to a position. This requires experience and good management of capital and risk. The problem is that the leverage effect is misunderstood by the majority of players. For these players, it is enough to put in place strong levers to be able to make big gains . Sometimes, like in May 2021, there is a cascading liquidation phenomenon created by too many players using leverage. This phenomenon will strongly move the price.

Market-making

Market makers are there to bring liquidity to the market . They are there for the market to execute volume. To be able to ensure constant liquidity, these institutions (or individuals) move the market to a location where there is volume to execute. This is not market manipulation, the market maker wins by providing liquidity, but does not care about the direction of the market.

Macroeconomics

Macroeconomics plays its part in the evolution of Bitcoin price. Indeed, we see that Bitcoin is increasingly correlated to the US market . While many analysts rely on technical analysis, others rely on the economic health of a company or countries . Thus, figures such as inflation, interest rates will have an impact on the price.

WHAT IS THE BEST SITES TO BUY BITCOINS IN 2022

There are a multitude of ways to buy bitcoin  or other cryptocurrencies. Buy online, in physical stores or over the counter: everything is possible. Here you will discover the different methods to make a purchase of bitcoins or cryptos. Each has its advantages and disadvantages. The most popular way to buy Bitcoin is through an exchange.

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An online cryptocurrency exchange, or exchange , is simply a digital crypto exchange. Its order book lists the amount of bitcoins that users want to buy or sell along with their price. When supply meets demand, the transfer is made. Here is our selection of the best sites / exchange to buy BTC:

PlatformMinimum depositCostsMethod of paymentBuy bitcoin through
Binance15€1.8%Card and SEPA TransferBuy BTC on Binance
FTX1€0.6%Card and SEPA TransferBuy BTC on FTX
Ascendex30€2%Card and SEPA TransferBuy BTC on Ascendex
SwissBorgSEPA transferBuy your BTC on Swissborg
Crypto.comCard and SEPA TransferBuy your bitcoins on crypto.com
KuCoin30€5%Card and SEPA transferBuy the currency of the future on KuCoin
Coinbase1,99€3.99% in card with a minimum of 0.99% and free in SEPACard and SEPA TransferBuy your bitcoins on Coinbase 

The links in this table and on this guide are affiliate links. Thanks for your support !

SHOULD YOU BUY BITCOIN? FORECAST, RISKS AND STRATEGIES.

bitcoin trading

For some, bitcoin should one day reach a value of $100,000,000 , why? Many see bitcoin as a new internet, they consider the bitcoin adoption curve similar to the son of the arpanet. Today the maximum value of a bitcoin is $69,000, this is revolutionary and if the BTC should again undergo a drastic correction by the end of 2022 that could lower its value by up to -80%, it should one day rise again and exceed its current ATH (“ATH” stands for “All time high”, and thus designates the highest price ever reached by a cryptocurrency).

So if you believe in the cryptocurrency revolution , and in Internet 3.0, then investing and buying bitcoins seems like a no-brainer. Often criticized for its “old age”, Bitcoin has always been able to innovate and silence critics as evidenced by the recent integration of the Lightning Network, only currencies that provide more than exchange value manage to stand up to BTC . Obviously we advise you to do your own research on this subject before investing your money or buying anything, cryptocurrencies are a risky investment, their price fluctuates enormously.

TRADER BITCOIN: WHAT TAXATION? HOW TO DECLARE?

You must declare your bitcoins in the digital asset category during your tax return , also there is an overall tax of 30% on your capital gains, which take place as soon as you convert your bitcoins into euros or dollars (fiat currencies) or that you buy an object with your cryptos.

IS BUYING BITCOIN ANONYMOUSLY POSSIBLE?

Most countries are hunting platforms without official identification procedures (KYC), so buying bitcoin while remaining anonymous is becoming more and more complex. Even the “big ones” who, originally, were not very observant have started to get in tune, like ShapeShift or LocalBitcoins. Buying bitcoin while remaining anonymous means agreeing to:

  • Pay a premium, i.e. a little more expensive than the market price
  • Take a slight risk, but our tips should keep you out of trouble!

Remember that, despite what we often hear:  Bitcoin is not anonymous, but pseudonymous . This is the principle of a blockchain: the funds are easily traceable, all that remains is to link the addresses to their owners. Thus, if you do not provide your identity at any stage, it can more or less be considered that you have purchased bitcoin anonymously. More or less, because we always leave traces on the internet, and then we get into a discussion around the choice of browser, the use of a VPN… but that’s another subject!

So how to buy bitcoins anonymously? In order to be absolutely sure to buy bitcoin while being anonymous, an infallible method remains… Paper money! Yes yes, the very one that so many cryptos want to supplant. Indeed, proceeding by bank transfer will inevitably leave traces, so… Cash only!

Different sites offer you to put you in touch with sellers, without asking you for identification. However, keep this advice in mind: if you want to buy your bitcoins anonymously, with a stranger, do it in a public place. This will prevent you from being scammed if necessary.

Fortunately, sellers have a reputation attached to their name on these kinds of sites. Thus, the better the reputation, the more the seller will be contacted, so all you have to do is find a serious seller, and that he agrees to deal with you! Sites such as  LocalBitcoin  &  Hodl Hodl  offer to connect you with specific  sellers . Some accept cash  deposits , and you will only need an email and a pseudonym to register.

WHERE TO STORE BITCOINS (BTC) AFTER PURCHASE?

To store your bitcoins you need a wallet, it can take the form of hardware or software, a software wallet will be software that generates a seed phrase also called “Rescue phrase”, this seed phrase allows you to recover your bitcoins on any new wallet if you lose yours. This seed phrase – this seed that will hatch your tokens from your wallet – is a key that only you must have on your keychain or risk being robbed.

If you want to invest a small amount in Bitcoin, your best ally will be Binance to buy and store your cryptocurrencies , if however you do not want to keep them on a CEX, a centralized exchange, you can take out your bitcoins on an external wallet, like Zengo. You can also use a hardware wallet like those offered by Ledger by getting a Ledger Nano X or a Ledger Nano S. There is also the paperwallet solution using bitaddress for example.

You can consult the tutorials dedicated to the different wallets that we have recommended. The physical wallet remains the most secure, like a credit card or a USB key ( hardware wallet ). Without going into details, a  reliable and secure desktop wallet is recommended. For example, software to install on any computer:  Electrum .

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On smartphones, our heart swings for Samourai Wallet. Don’t forget to save your mnemonic phrase, this sequence of words that allows you to generate your private keys and your associated public addresses. This is the only way to regain access to your bitcoins , if you reinstall your computer, or if it is lost, broken or stolen! You can  download Electrum here . Once you have a bitcoin wallet, you will have multiple receiving addresses to which you can receive and then transfer your newly purchased bitcoins . The process is thus the same for most cryptocurrencies: you just need to install an application on your PC (Windows or Mac) or smartphone.

HOW TO BUY BITCOINS? STEP BY STEP TUTORIAL WITH FTX

PREREQUISITES AND TIPS BEFORE BUYING BITCOINS

Before any purchase of bitcoin or other crypto-currencies online, you must meet a few prerequisites. First, your computing environment must be protected. If manipulating his bank details or other personal data on a corrupted computer is a very bad idea, doing it with his cryptos is even more so. Make sure your operating system is up to date, as are your antivirus and firewall. Also, use a VPN to leak as little personal data as possible on the web.

BUY BITCOIN (BTC) WITH FTX

We’ll show you how to use the FTX exchange to buy Bitcoin (BTC). Once your FTX account has been created, all you have to do is go to your wallet located in the drop-down menu at the top right. Then, the first solution is to make a deposit by credit card. This method has the advantage of its speed. The money should arrive in your FTX account within seconds. For this, it is necessary on “card deposit”.

An image containing text, interior, monitor, screenshot Description automatically generated

A menu will then appear asking you to add your credit card details and then indicate the amount to be credited. The maximum amount authorized for purchase is $2,999 (or around €2,760 at the current price). Please note that a 3.3% fee will be charged for this service.

An image containing text (purchase bitcoin)

A second way exists, free but slower, the SEPA transfer. To do so, you must click on “FIAT” then on the line corresponding to the currency you wish to deposit, here in this case the euro, you must press “DEPOSIT”.

buy bitcoin fiat ftx

A window asking you to choose between a Wire transfer or a SEPA transfer then appears. Note that if your bank allows it, it is possible to make a SEPA (Instant) transfer, that is to say instantaneous. Tested and approved, your money arrives within two seconds in your FTX account. Thus, depending on your bank, this means of transfer is much more interesting than using a bank card because it saves you the 3.3% charge on the amount transferred.

An image containing text, exchange ftx bitcoin

Note: at the time of the capture, the SEPA (Instant) service was undergoing maintenance, hence the gray bar on the view.

Once the choice of transfer has been made, FTX indicates the bank details to which to direct your transfer appears. Make sure that the person making the transfer has the same name as the one holding the FTX account. Otherwise, the return costs charged by FTX will be €60. In addition, you will need to indicate the amount transferred and add a file containing proof of your transfer. This can be a pdf file or a screenshot of your transaction. Finally, you will need to click on “Confirm EUR deposit” once all these steps have been completed.

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After receiving your amount in euros, this is where the serious (or fun) things begin! You are ready to buy Bitcoin. Indeed, FTX offers the purchase of Bitcoin directly with your euros (EUR).

For that, it is not very complicated. You have to go to the Markets tab and then to SPOT. Then, uncheck all the boxes except the EUR which you leave highlighted in blue. You will then see the famous BTC/EUR trading pair appear. Click on it to go to the next one.

You will land on an interface that seems complex at first glance, but rest assured, the manipulations are actually very simple. Indeed, the FTX interface is very complete, it shows you the graph of the Bitcoin price against the euro as well as the order book. However, for what you want to do in this case, this information does not matter to you. It is the right part of the interface that will interest you. Select “Buy BTC” then “Market order”. Finally indicate the amount in EUR that you want to convert into BTC and press the “Buy” button.

And hop, it’s in the pocket! Your precious BTC are now in your wallet! Well done young budding investor! We can only hope that you have made a good deal, which I have no doubt about. Be careful, buying cryptocurrencies always represents a share of risk, due to their upward and downward volatility.

CONCLUSION: THE BEST WAY TO BUY OR TRADE BITCOIN

The best way to buy bitcoins is therefore to go to Binance.com or FTX and follow our step-by-step tutorial. Then it’s up to you to move your BTCs, exchange them, spend them, or keep them in your safe. There is only one thing left to say to you: Welcome to the future.

BUY BITCOINS (BTC): FREQUENTLY ASKED QUESTIONS

How to secure your bitcoins?

To secure your bitcoins, we strongly advise you to use a password different from all your other passwords for the platform where you buy your cryptos, use two-factor verifications via google authenticator to avoid the adventures that may have happened to Coinbase users, finally write your seed phrase in one or two notebooks that you hide or store in a safe and do not leave any photos of it on your device.Can you buy bitcoins via ApplePay or GooglePay?

Yes the Ascendex and Coinbase exchange allow you to easily buy Bitcoins with ApplePay or GooglePay , their applications are available on the apple store.Can you buy bitcoins through Paypal?

Yes coinbase offers you to use Paypal for your Bitcoin purchases .Can you physically buy bitcoins?

Yes and no. One of the safest ways to buy bitcoin “physically” will be through crypto ATMs! As a bonus, some ATMs do not require you to identify yourself to get your hands on a token, most offer payment in cash and it is sometimes also possible to resell your BTC!Can we buy Bitcoins by credit card?

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SAKHRI Mohamed
SAKHRI Mohamed

The blog of a computer enthusiast who shares news, tutorials, tips, online tools and software for Windows, macOS, Linux, Web designer and Video games.

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