Bitcoin may have become widespread in 2017, but not everyone who is going to buy Bitcoin did so two years ago. If you look at the five generally accepted stages of technology adoption, i.e. Cryptocurrency adoption entered the early majority phase in 2017 and is still there today. The staying power of crypto has been demonstrated in the past few months as Bitcoin dipped for most of 2018 and early 2019, before starting an impressive rally in early April. For people who didn’t buy Bitcoin at the first peak, this rally may be all it takes to get a toe or foot on the cryptocurrency gate.
But for the newbies who are in cryptocurrencies, Blockchain is still a wild west, very wild. If you are looking to join the early majority and buy Bitcoin online for the first time, here are five things you should know:
- Any reputable online cryptocurrency provider will verify your identity:
Think about when you opened your bank account. Most likely, you would have to do it in person, provide a government-issued identity card, such as a driver’s license or passport, enter your Social Security or national identification number, and complete and sign a series of forms. In other words, you had to show your intention when opening the account and show that you were who you said you were.
How? It is a combination of regulations in the served jurisdictions, a risk management approach and a desire to maintain Internet and Blockchain security. Requiring users to prove their identity helps cryptocurrency sellers, brokers, and exchanges protect themselves and their users from fraud and fight money laundering. If you go back in time to the beginnings of Bitcoin, it was created as a decentralized peer-to-peer currency with a high degree of anonymity. As a result, in addition to being used by many ordinary people who are enthusiastic about Bitcoin’s technological capabilities and see it as an investment strategy, it unfortunately also became an avenue for money laundering and scammers. Identity verification seeks to mitigate the risk posed by bad actors.
What does verification look like? Unlike banks, which almost always require you to open an account in person, if you buy cryptocurrencies online, you’re, well, online. You cannot simply enter the website and show your ID card. So how do you show that it really is you and that you want to buy Bitcoin online? In addition to requiring a government-issued ID card, many crypto providers will also ask to see a picture of you with that ID card. This way, the provider knows that the person in the ID matches the person who opens the account. Some providers will also request a “statement of intent” or a form stating that you really want to open the account.
Of course, those same bad actors who commit fraud by buying Bitcoin can also pose as cryptocurrency sellers. It’s always important to put your online security first – do your research when choosing where to buy cryptocurrencies, and make sure the service you use is legitimate and reliable.
Use caution when providing your documents; after all, it is your identity that we are talking about. However, don’t be alarmed if you’re asked to provide a copy of your identity card or other personal information when creating an account to buy cryptocurrencies online. While it is still possible to buy small amounts of Bitcoin online without providing ID, for larger amounts purchased with a credit card, debit card, or by bank transfer, any reputable service will ask for your ID.
- You need a special wallet:
Most people new to cryptocurrency don’t realize they need a place to store it. Unlike the fiat currency (dollars, euros, yen, and other government-backed currencies), which is stored in your bank account, or under your mattress, the cryptocurrency is not only virtual, but also decentralized, which it means that you live outside the banking system. So how do you maintain your cryptocurrency? In a wallet intended only for crypto. Cryptocurrency wallets come in different forms; They can live online, on your desktop, as a mobile app, on a USB stick, or even on paper. Whichever wallet you choose for your crypto, you will be given a wallet address, which is a string of letters and numbers that you can use to receive cryptocurrencies, as well as a secret code or private keys, which will allow you to access your holdings of cryptocurrencies and sell or trade them (more on that in a second).
An important thing to note is that each cryptocurrency has its own Blockchain, meaning the technology that allows the cryptocurrency to exist, so each cryptocurrency has a different format for its wallet addresses. That means that your Bitcoin wallet address and your Cardano wallet address will be different, even if you have a multi-currency wallet that allows you to see all of your holdings in one place.
How do you choose a wallet? Do your research. Active wallets or wallets that live online (in an app or in the cloud) give you easier access to your funds, but are more susceptible to hacking. Cold wallets or wallets that live offline (like paper wallets or external drives) are safer for storage, but harder to retrieve if damaged or lost. Many people with various crypto wallets choose to distribute their assets in more than one wallet.
If you are buying cryptocurrencies for the first time, you will have to set up a wallet.
- You are nothing without your private keys:
Private keys are the password for your cryptocurrency wallet; a very long and intricate set of numbers and letters that are associated with your particular wallet address. You need them to send your cryptocurrency or to withdraw money. It sounds simple enough, but unfortunately it is more complicated.
Unlike your bank password, which you generate yourself (and which is probably not very secure), your private keys are automatically generated, they are part of what makes Blockchain so impenetrable, and cannot be reset if you lose them. . In some cases, when the wallet provider withholds your private keys, they may be recoverable, but don’t count on it; The internet is full of stories of people who lost their private keys and with them, millions of dollars in Bitcoin.
How does that happen? Part of this is due to the way Blockchain technology works and what makes it so secure. Part of this is due to the decentralized nature of cryptocurrency, a double-edged sword that puts you fully in charge of your own economy, but is also fully responsible for it. But in short, if you lose your private keys, even if you have a cold wallet that gets damaged, you lose all of your cryptocurrency holdings. It is imperative that you keep your private keys in a safe place and that you know where that place is.
Another thing to keep in mind? If someone has access to your private keys, they have access to all of your cryptocurrencies. Not only should you keep it safe, but you should also not give your private keys to anyone to whom you would also not give your bank account password. So if someone suggests managing your money and asking for your wallet address and private keys, all alarms should sound.
- Cryptocurrency is not all Bitcoin:
Most people who think about cryptocurrency automatically think of Bitcoin. Actually, there are over 2000 cryptocurrencies currently in existence. Some of them are niche coins associated with particular projects that will never take off and are probably not worth taking a second look at. However, at the top of the rankings are several alternative currencies that may sound familiar, such as Ethereum, Litecoin, and Ripple. These coins are more affordable than Bitcoin, and while they don’t have the same market share, they can provide a legitimate alternative entry point to the cryptocurrency. Cryptocurrency brokers like Coinmama allow you to buy Ethereum by credit card or bank transfer, as well as seven additional alternative currencies.
Don’t discredit buying Ethereum or other alternative currencies when building your crypto wallet.
- Buying Bitcoin is not difficult:
We’ve come a long way since the early days of Bitcoin, when getting Bitcoin could be a difficult challenge. These days, there are many ways to buy Bitcoin, including through Bitcoin ATMs or peer-to-peer networks. The easiest way to buy Bitcoin for the first time is with a credit card, it is recommended. Once you have set up your crypto wallet, it is no different than any other online purchase you would make. Coinmama allows users to buy Bitcoin with credit or debit cards for up to $ 5000 at a time. Just sign up, verify your account and start shopping.
A recommended place to find cryptocurrencies and make your order with a credit card is: Coinmama
Disclaimer: Financescity only offer legal, financial or investment advice, but it is not a substitute for the due diligence of each interested party. Financescity does not endorse any of the initial coin offerings (ICOs) promoted here. The content and links provided in each article are for informational purposes only.