How to Buy Bitcoin: The Definitive Guide [2021]

in #crypto2 years ago (edited)

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Bitcoin has gone from being a relatively obscure curiosity in the internet more than 10 years ago to gradually growing to becoming something which is infamous in 2021 and that almost every person on earth with connection to the internet has now heard of and at least understands to a basic level.

Bitcoin has gone through its fair share of trials and tribulations along the way and it is far from out of the woods with consideration to global adoption and the perspectives that people have when they discuss Bitcoin and its future.

However today there are more people than ever before that are buying and selling Bitcoin every day and the global trade in the world's number one cryptocurrency is higher than it has ever been, with many new users searching for information about the best ways to be able to buy Bitcoin in 2021.

With that in mind this guide takes a look at how to buy Bitcoin, beginning with a breakdown of what Bitcoin actually is and why people use it, for moving on to some points that look at the safety of using Bitcoin, what the advantages of using Bitcoin actually are, the different types of places to buy Bitcoin in 2021, and the best places to buy Bitcoin online today.

What is Bitcoin?

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The Basics of Bitcoin

In an ocean of different cryptocurrencies that are available to trade and invest in 2021, Bitcoin has remained as the world's number one cryptocurrency by popularity, the total value of all Bitcoin and existence, and the highest levels of exposure throughout the mainstream and in the general population around the world.

Bitcoin is basically an alternative payment system that is based around the creation of a fully digital currency that users cryptography in order to secure it and to remove the need for a central bank or any other kind of central financial authority in order for it to be issued and managed.

Bitcoin was the first example of how cryptography could be used to create a new kind of currency and to better secure virtual currencies with cryptography in a way that is completely decentralized and that users algorithms and mathematics in order to manage its creation and distribution or government bodies.

Bitcoin was designed to provide a more democratic financial system and to allow people to be able to take control over their financial situation by removing the need for third parties and intermediaries such as banks and to allow for the direct storage and transfer of financial wealth via the Bitcoin network.

How Bitcoin Works

The underlying technology that allows Bitcoin to function is known as blockchain technology, with blockchain being created by Satoshi Nakamoto, and an anonymous group or individual that also created Bitcoin itself and the concept of cryptocurrencies as well in 2009 when they released a white paper known as the Bitcoin white paper.

The purpose of blockchain is to ensure that the creation and distribution of Bitcoin is done in a decentralized way, without meaning that no single stakeholder in the Bitcoin network has complete control over how Bitcoin is created and distributed, with the key mechanism that is used in blockchain that ensures this takes place being cold Bitcoin mining or proof of work.

What this means is that thousands of computers around the world connects to the Bitcoin network via the internet and collectively work to compete against each other in solving cryptographic puzzles with the winner of each competition being awarded with free Bitcoin roughly every 10 minutes, and this acting as an incentive for users around the world to dedicate their electricity and hardware costs to the Bitcoin network, effectively infusing value into Bitcoin inherently by doing so.

As well as the the reward that is given to minors, the winning minor is allowed to select which transactions will be added to the next block of the Bitcoin blockchain and this ensures that no single party has control over which transactions are all and added and that instead the process of adding transfers to the Bitcoin blockchain is done in as random a way as possible.

By its very nature, the Bitcoin blockchain becomes more resistant to attacks from third parties as the amount of processing power that is being dedicated to it increases, with higher levels of total processing power being dedicated to the Bitcoin network meaning that any single attacker would have to have access to higher levels of processing power themselves in order to be able to attack the Bitcoin network successfully.

The History of Bitcoin

In 2009, an anonymous group or individual known only as Satoshi Nakamoto released a research paper to a number of selected communities online that focused on things like cryptography, financial anarchy, and the use of digital currencies, with this research paper being known as the Bitcoin Whitepaper and it's sparking what would become the largest transformation of the global financial ecosystem over hundreds of years.

The beginnings of Bitcoin and the cryptocurrency market were slow and it only gradually spread between people as more of a curiosity than anything else, however as time went on dozens of people turned into hundreds of people and then into thousands of people that were buying and selling Bitcoin every day at a point in time where the price of a single Bitcoin was still much less than one dollar each.

Over time what was a curiosity and an experiment more than anything else gradually became a fully fledged financial ecosystem as platforms such as exchanges began to be created in order to allow for the streamlined trading of Bitcoin at larger volumes without the need to trust the parties that will being traded with, and this will a dramatic expansion of the size of the cryptocurrency market as a result of this with the value of Bitcoin increasing to above one dollar for the first time with this being a significant milestone considering that when it was first created it was thousands of times smaller in value than this.

From around 2013 or 2014 onwards the cryptocurrency market has been progressively pushing for the and father into both the consciousness of the general population and into mainstream Binance where today institutional investors that once claims that Bitcoin was a scam and not to be messed with it is now something that they are themselves investing large amounts of funds into publicly.

As the cryptocurrency market continues to evolve the prominence of Bitcoin and its importance within the market is likely to continue irrespective of the myriad of new cryptocurrencies that are also created, with this being largely as a result of a few factors that include the extensive decentralization of Bitcoin and compared comparison to other cryptocurrencies, and its global brand and recognition throughout the world.

Why Do People Use Bitcoin?

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To Make Payments

One of the main use cases of Bitcoin is as an alternative payment method to the traditional methods that have been or available for decades such as credit cards and debit cards, bank transfers, and payment processes such as PayPal and others, with Bitcoin providing numerous advantages over all of these payment methods and this in shoring Bitcoin's growth over the past 10 years.

One of the first use cases of Bitcoin when it was created and when its community was still growing in 2010 and 2011 was the ability to be able to make global payments easily and quickly without the need for permission from banks or payment processes, and without the need to provide large amounts of personal information and to have that stored on a server somewhere for time immemorial immemorial.

Bitcoin has always been a good option for making payments, that have seen periods of time where higher transaction fees have been a result of the high demand for using the Bitcoin network, but still the robustness of Bitcoin as a payment mechanism remains even throughout these periods of time as well.

To Speculate for Profit

Another one of the earliest use cases of Bitcoin that has remained prominent and popular throughout the past 10 years has been the use of Bitcoin as a tool for profitable speculation and in particular the ability for users to be able to generate an income by speculating on the price changes of Bitcoin that may often be significantly better than earning an income with a 9-to-5 job.

Since its creation until today Bitcoin has been significantly more volatile of an asset than many traditional assets such as stocks and Forex, and while some people have considered this to be a negative, many Bitcoin traders have seen the higher volatility of Bitcoin as an opportunity to be able to generate significant amounts of income that may not be possible in the traditional market where volatility is lower.

Speculating on the price of Bitcoin for profit can be broken down into two main groups of activities, with those being Bitcoin trading and Bitcoin investing, with Bitcoin trading typically being a shorter-term strategy that looks to create repetitive trades with low generations that will make lower amounts but a considerable cumulative amount of role, and with Bitcoin investing being typically a long-term strategy for making lesson numbers of trades but with those trades typically generating higher levels of profit.

To Store Value Over Time

Another major use case of Bitcoin has been the ability to store value over time, much in the way that gold has been used for thousands of years with Bitcoin being considered by many as a form of digital gold being that it has consistently maintained its value and as well as this has actually increased in value consistently as well over the past 10 years at a rate that is much higher than any other investment opportunity.

In not only has Bitcoin been a good investment opportunity over the past decade, but it has in fact being the best investment opportunity by a long way in comparison to anything else with the total ROI from investing in Bitcoin from the beginning of its life until today being more than 30 million% and that dramatically outperforming any other investment class possible.

This is also shown that while there have been periods where Bitcoin has lost value over time is always recovered and grown to a higher level with in a few years after that, with this being based on underlying computational mechanisms within the Bitcoin blockchain, and that effectively ensuring that Bitcoin is a's strong investment F store of value today as it always has been.

Bitcoin Safety

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Is Bitcoin Safe to Use?

One of the biggest questions that have been asked over and over again for the last 10 years is whether Bitcoin is safe to use and the reasons that Bitcoin is not a scam and is in fact here to stay and to become a part of the global financial sector.

As with anything like this, the answer to this question is not as simple as yes or no and there are many situations that using Bitcoin is very unsafe while there are also underlying factors relating to Bitcoin which means that it is substantially safer than using the mainstream financial sector in many ways.

Many scams have been perpetrated using Bitcoin over the past 10 years and the thing about it that makes these scams prevalent and possible to happen is that Bitcoin usage is pseudo-anonymous, meaning that while users aren't 100% completely disconnected while there is not a complete 100% this connection from the identity of users and their financial transactions with Bitcoin, important pieces of information such as names and identity are not directly connected to Bitcoin transactions but only a Bitcoin wallet itself.

What this means is that scammers are able to more readily get away with their crimes by using Bitcoin because their identity is inherently hidden by the usage of Bitcoin instead of other financial mechanisms.

However at its core Bitcoin is very safe to use being that it is completely controlled by algorithms and mathematics and not by human beings, with this meaning that factors such as corruption cannot come into play with regards to the Bitcoin ecosystem at a macro level.

The Dangers of the Crypto Market

The cryptocurrency market has provided a source of wealth and income for millions of people around the world over the past 10 years and it is the perfect blend of technology and Binance with it allowing many people to gain significant benefits that are unparalleled anywhere else online.

The saying this there will also been many different risks and scams involved in using cryptocurrencies over the past years are especially, but with this also dating back to the earliest days of the cryptocurrency market where as soon as people realize that they could scam others and get away with it more easily they begin to do so.

Many scams in the cryptocurrency market rely on trust and rely on the naivety of new users to give over critical information such as private keys which give attackers direct access to the funds of the victims.

As a result of this, the best way of dealing with these kinds of risks is to ensure that at no time personal information such as private keys is given to anybody else in the cryptocurrency market at all.

Ways to Protect Yourself When Buying Bitcoin

There are a number of ways to protect yourself when buying Bitcoin that can be the difference between safely using the cryptocurrency market long-term and suffering devastating scams with large amounts of funds being lost.

Some of the more important ways of protecting yourself when buying Bitcoin are to use tools that help to increase security such as hardware wallets and also to use trading platforms that have reputations for being safe places to use.

There have even been cases of crypto trading platforms that have been set up specifically in order to steal the funds of the users of the book and once a large enough amount of cryptocurrency has been posted on the they have exit scams and taking millions of dollars with them in the process.

However safe crypto trading platforms can easily be identified and they should be used at all times, with platforms that have never been hacked before having less of a chance of protecting the users in the future, and crypto trading platforms that have a range of powerful security features also being preferred over others.

What are the Advantages of Using Bitcoin

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Faster Transactions

One of the main advantages of using Bitcoin as opposed to using other payment methods such as banks and payment processes is that Bitcoin typically provides faster transaction times and this is a significant advantage for globally dispersed parties that would like to be able to quickly and easily transfer the funds to each other without requiring the use of a bank.

Thanks can often take you three days or more to process international transfers to different banks however with the use of Bitcoin transfers can be made with in a single hour and this is a relatively reliable time span for Bitcoin transactions to be able to be completed, with there sometimes being increases or decreases in this time depending on the network traffic that is present at the time.

While Bitcoin does provide faster transaction times then banks, many other cryptocurrencies provide even faster transaction times of anywhere down to a few seconds and this is a significant advantage in comparison to the legacy financial system that can of often be large and clunky and can process transactions very slowly with it often taking over an entire weekends to be able to make a transaction to a different account.

Cheaper Transactions

Another advantage of using Bitcoin's effect is that cheaper transactions are possible, with the potential to be able to send hundreds of millions of dollars of value for less than one dollar.

In fact this is exactly what has happened a number of times as large cryptocurrency exchanges have sent large transactions at this scale for less than a single dollar where it would typically cost tens of thousands of dollars with banks.

The reduction in costs of transacting value was one of the major advantages of using cryptocurrencies such as Bitcoin and one of the reasons that many people have used Bitcoin instead of using the legacy financial system.

Different Types of Places to Buy Bitcoin

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Bitcoin Brokerages

Pickling brokerages are platforms that create trading environments for the users and allow them to be able to seamlessly buy and sell Bitcoin, with brokerages making up a large part of the cryptocurrency market in 2021.

Brokerages take an active role in the trading process and will often either execute the trades against the users themselves or will partner with affiliate third parties that will provide the liquidity for trading to be able to take place.

Brokerages are typically the most advanced kinds of cryptocurrency trading platforms on the market and have high-level security and a wide range of features in comparison to the next kind of platform that we look at, cryptocurrency exchanges.

Bitcoin Exchanges

Bitcoin exchanges trading platforms that provide the facilitation of trading services to the users but do not take an active role in the trading process, instead simply allowing a platform for different users to meet and trade with one another.

Bitcoin exchanges were the original kind of trading platforms that populated the cryptocurrency space and even today there is still a large number of exchanges on the market providing the services to cryptocurrency users.

Cryptocurrency exchanges can vary significantly in the quality of the services they provide, and often don't have as high-level performance as brokerages because of the additional training on the processing that is required to be able to create so many simultaneous trades at once.

P2P Bitcoin Buying

Another way for users to buy Bitcoin is doing it peer-to-peer, with this entailing connecting directly with other users and without the use of platforms typically, and being able to make direct Bitcoin transfers.

Local Bitcoin's is one platform that provides P2P services for Bitcoin buyers and sellers and allows them to connect directly without the need for charts and other trading features.

Historically peer-to-peer Bitcoin trading has been something that many larger trades have avoided because of the high-risk of meeting people face-to-face or using platforms such as PayPal and being ripped off as a result, and therefore trading exchanges and brokerages are typically more popular.

Best Places to Buy Bitcoin Online

PrimeXBT

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PrimeXBT is one of the largest cryptocurrency exchanges in the world by trading volume with up to $7 billion of global trade passing through PrimeXBT's doors every day, and this platform is in fact the fastest growing crypto trading platform over the last few years since its launch as it has gone from starting out with no trade to rapidly increasing to become one of the biggest platforms on the market.

This is largely as a result of the continued push by PrimeXBT to create innovative tools and services and to provide them at low cost to the users, providing direct access to a number of powerful tools such as the world's first form of crypto copy trading, Covesting, as well as direct access to both the cryptocurrency market and traditional asset markets simultaneously in a single account.

PrimeXBT's growth has been as a result largely of it providing the lowest fee schedule of any major cryptocurrency trading platform in the market with a flat rate of just 0.05% being applied to all trades on the platform irrespective of the asset class being traded or the size of the trade.

PrimeXBT has also built a strong reputation for having excellent security measures in place in order to protect its users, with the platform never being hacked throughout its years of operation and ensuring that its users daughters data and funds have remained safe

PrimeXBT has done this by implementing a wide range of bank-grade security measures on the platform that include cold storage of digital assets with multi-signature technology and hardware security modules with rating of FIPS PUB 140-2 Level 3 or higher.

Perhaps one of the most impactful security measures on PrimeXBT is the fact that the platform does not use hot and cold bullets as many other crypto trading platforms do, but instead stores all of its users funds on coal bullets only with this dramatically reducing the risk of being hacked as this is one of the major attack vectors used by hackers and now PrimeXBT users funds are completely disconnected from the internet.

Binance

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Binance is another platform that is popular amongst Bitcoin traders and is often used to buy Bitcoin online as it provides a range of different ways to be able to buy cryptocurrencies and a large listing of different crypto's as well.

Binance has also grown rapidly over the past few years with the native token of the platform, the BNB coin, helping them to be able to grow rapidly and to build a large amount of exposure as a result of various viral marketing techniques.

Binance was hacked in 2019 for more than $50 million and this has led many to question whether or not the platform is safe and secure, and is an important consideration for any new traders that are considering using this platform for doing so.

LocalBitcoins

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LocalBitcoins is a unique platform in the cryptocurrency space and unlike other platforms that provide trading in variants using charts and other trading tools, LocalBitcoins is simply a peer-to-peer platform for connecting with others that are able to either sell or buy Bitcoin from you.

LocalBitcoins is particularly useful for users that would like to be able to trade with people with in their own country being that there are many options for being able to make payments to others using bank accounts or even using in person meetings, as well is there also being a number of international options such as PayPal and Western Union as well.

LocalBitcoins has been a key part of the cryptocurrency space for many years and has built a policy reputation as a result of never being hacked and of always protecting its users funds with advanced security measures and providing a critical service to the cryptocurrency market that has benefited many users over the years.

LocalBitcoins has never expanded into providing services for other cryptocurrencies apart from Bitcoin and has remained Bitcoin maximalist throughout his time of operation, while there have been many opportunities for the expansion to if there him and other oh coins, however local Bitcoin's has remained solely a Bitcoin exchange platforms and remains one today.

In Conclusion

Buying Bitcoin in the cryptocurrency market is very similar in 2021 in many ways as it once was, and also there are some dramatic differences in the way that it is done and the number of different methods available for being able to quickly and easily by Bitcoin in 2021.

There are risks in the cryptocurrency market that balance with a range of unique opportunities that are not present anywhere else including in traditional Binance, and the millions of daily users in the cryptocurrency market are happy to absorb those risks and mitigate against them in order to be able to access these unique opportunities.

While there are many different Bitcoin trading platforms in the market in 2021, and in fact there are hundreds of different trading platforms available to buy Bitcoin, we have selected a few platforms that provide unique services and value and that have remained the top tier the cryptocurrency market for many years as a result of the value that they provide.

You like to learn more about the three platforms we’ve selected and listed as good platforms to buy Bitcoin in 2021, check out PrimeXBT, Binance, and LocalBitcoins.

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As I know, LocalBitcoins requires your ID documents, so it's not anonymous, I hadn't checked all the others. I switched to Crypton exchange after they listed Bitcoin https://twitter.com/UtopiaP2P/status/1480838807935078402?s=20 Because their exchange is no KYC and decentralized. I don't know what else should be done in order to make you even more anonymous online.

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