Bitcoin is a network, a protocol, a groundbreaking technology and a culture in and of itself. It is also digital money.
In the guide below, we’ll cover the basics around utilizing bitcoin (BTC) as a financial asset — the best ways to buy BTC, methods for selling BTC (not that you’ll necessarily ever want to) and simple explanations about how to do various transactions.
This guide does not constitute investment advice. Instead, it is meant to offer basic information around how bitcoin functions as a financial asset. Let’s get started!
HOW TO BUY BITCOIN IN THE UNITED STATES
You can buy bitcoin directly through Bitcoin Magazine, by visiting our "buy bitcoin" portal, or by finding the nearest Bitcoin ATM. Bitcoin ATMs are kiosks that look similar to traditional ATMs, but instead of connecting to a bank account, they connect to the internet and facilitate cash and credit card transactions for bitcoin. In exchange for the convenience of using a Bitcoin ATM, transaction fees charged by these machines can be higher than the rates offered by online exchanges — up to 7% higher, according to the Consumer Financial Protection Bureau.
Alternatively, many first-time bitcoin buyers in the U.S. choose to do so through a large online bitcoin exchange, using either a mobile app or laptop. To buy bitcoin through a major exchange, you’ll need a bitcoin wallet, some personally identifiable information, access to fiat with which to buy the bitcoin and, finally, an exchange account. Some exchanges are more reliable than others, and some charge high fees. For more information on exchanges, visit our exchange market guide.
It’s important to note that companies like PayPal and Venmo only offer exposure to bitcoin’s price volatility, because you can’t remove the bitcoin from their platforms to store it in your own wallet. It’s not wise to consider that option for purchasing bitcoin because you can never remove it from the platform. The final step of a bitcoin purchase is often to move the bitcoin to your own wallet, which you control. So, for the final step of buying, you’ll need a bitcoin wallet so that your purchase can be secured somewhere you control. Though many choose to buy bitcoin through large exchanges, establishing a bitcoin wallet for which you control the private keys is a critical next step to ensure that you are in control of your bitcoin.
Make sure to review all the options for buying bitcoin and choose the one that works best for you. For more information on all of your options, from earning bitcoin to buying it using cryptocurrency exchanges, visit our full guide to buying bitcoin for the first time and watch this video tutorial.
HOW DO I SEND AND RECEIVE BITCOIN?
Now that you’ve gotten some bitcoin, you might want to experiment by selling it or spending it. Websites like Bitcoin Black Friday list discounted items and other deals for customers who pay for bitcoin specifically. Bitcoin sellers can leverage exchanges, peer-to-peer platforms, in-person marketplaces and more to sell their bitcoin. For more information on selling bitcoin, visit our guide to selling bitcoin.
On the other hand, if you want to transact with your bitcoin beyond cryptocurrency exchange platforms, you’ll need to set up your own bitcoin wallet. Sending and receiving bitcoin, also known as transacting, usually take place using a public LEDGER called the Bitcoin blockchain. (To learn about transactions that happen off chain, read our Lightning Network explainer.) For a Lightning-friendly mobile wallet option, which can do both on-chain and off-chain transactions, follow this Blue Wallet mobile app tutorial video.
Generally speaking, bitcoin transactions include the record of bitcoin addresses involved, both sender and receiver, and the amount being sent. Always remember that a bitcoin transaction can’t be reversed, so double-check the receiving address before you press send.
There are also many ways you can transact with bitcoin without needing to buy any at all. Reward apps like Carrot help people earn bitcoin, and some freelance job sites show companies where people are paid in bitcoin. In order to receive bitcoin, you’ll need to start by setting up your first bitcoin wallet.
In conclusion, individual bitcoin wallets are the best way to transact with bitcoin. Bitcoin is a strictly digital form of money. We offer several guides for different bitcoin wallets, most of which are available in the Bitcoin Magazine store.
Whether you acquire your bitcoin by buying bitcoin through an exchange or ATM, or any other method, the next step to transacting with bitcoin is making sure it is inside a digital wallet where you hold the private keys. Not your keys, not your coins. That’s all you need to know! Welcome to the future of money.
