Cryptocurrency has been one of the hottest tech topics around in the past several months. This is primarily due to the incredible amount of fluctuation in the value of the most common form of cryptocurrency, Bitcoin. The end of 2017 saw the value of Bitcoin shoot to a record high, topping $18,000 near the end of December. Analysts and market experts also expect this may just be the tip of the iceberg, with potential value reaching six figures in the coming years.
The process for buying and selling Bitcoin is relatively simple and straightforward. Sure, there are a few pitfalls and negative aspects to both experiences; however, it is easy enough for the average computer user to handle without excess difficulty.
The primary method used to buy and sell bitcoins is similar to the stock exchange. Individual companies, called bitcoin exchanges, act as intermediaries between buyers and sellers. Some organizations exchange the funds when the purchase or sale takes place, directly from a bank account or credit card. Others require you to deposit money into an account with their company prior to being able to perform any transactions.
Coinbase is one of the most popular exchanges in use today, used primarily by newcomers to the Bitcoin scene, and those who usually like to play the long game rather than trade daily. The primary reason for this is that Coinbase uses the method of charging when transactions are made, rather than having you deposit money into a company account. Transactions take days to perform, usually making it unsuitable for the fast-paced nature of flipping your assets daily.
Signing up for Coinbase is best done through their website, as their app can be a bit buggy. While it does include a few steps, they are all straightforward and simple to complete:
- Click here to access the sign-up page
- Verify your identity through using the verification email sent.
- Select “Individual” account for personal transactions.
- Add a phone number used for the two-step authentication process.
- Select which method of payment you want to use, either a card (debit or credit), or a bank account.
- Use either a webcam or mobile phone to submit needed identification documents.
- Once your identity has been verified, fill in the details for your bank account or card.
- Two small charges will be made to your account. Note the last two digits of each transaction, and enter them in to the appropriate fields to verify the account is yours.
And that’s it! From there you can click the Buy/Sell button, and proceed with any purchases or sales you want to make.
If your preference leans more towards buying and selling quickly, potentially many times each day, your best bet is to use a service like Kraken. Instead of making individual charges each time you want to buy bitcoins, money is deposited into an account with the company, via wire transfer from a bank account. Any buy or sell transactions performed are deducted from or deposited into the verified funds contained in your Kraken account. Because the funds are guaranteed, transactions take only seconds to complete.
Things to Watch Out For
While buying and selling bitcoins is simple for even the relatively-novice user, there are a few things you want to watch out for if you decide to take the plunge. A little caution and care can go a long way towards making sure your money grows instead of shrinks.
Contact Your Bank
Most traditional banks see a red flag spring into existence when it comes to any type of cryptocurrency transaction. The anonymous and brand-new nature of cryptocurrency makes it simple for hackers and thieves to prey on the unwary or first-time users, a fact that banking institutions are well aware of. As such, making a quick call to your bank before you try your hand at digital currency, can bypass the possibility of a pesky account freeze while the bank verifies that you are, in fact, behind these charges.
Keep Yourself Secure
As with virtually all digital products, the opportunity for scams and thievery is ever present. Hackers can send malware, designed specifically to steal bitcoins, a type of virtual attack that is becoming more and more popular as the market evolves. Phone porting, or tricking a phone provider into giving complete control of the phone account to an unauthorized party, allows these criminals to change bitcoin account details, and drain any bitcoins you have, or even access your banking details. Taking simple steps, such as using antivirus programs or two-step authentication, can make sure you do not become a victim.
Buying and selling bitcoins and other cryptocurrencies is an excellent way for you to have fun with some extra money, and potentially make a substantial profit while doing so. However, it is extremely important to note that extensive research and understanding are necessary to stay safe and profitable. It is imperative to take those extra steps needed to ensure your experience is a positive one.