Last Updated on August 7, 2020
Bitcoin prices are stabilizing and the days of the bubble are long in the past. With big institutions beginning to get into the cryptocurrency game like Fidelity Digital Assets and the major companies (like Starbucks) backing Bakkt, people are beginning to view Bitcoin in a whole new light.
Back in 2017, Bitcoin was still thought of as an investment for tech geeks, while at the peak of the bubble, financial pundits like Jim Cramer likened buying Bitcoin to “pure gambling.” And if you were buying Bitcoin in January 2018, that’s more or less what you were doing.
In 2019, the narrative has changed, and as big money piles into the crypto game, the rules are changing. Bitcoin is coming home to its roots as an alternative payment method and even a business solution. The number of retailers accepting cryptocurrency continues to rise and volatility is slowing down.
Whether you’re an investor, looking to use Bitcoin as a payment method, or a business that wants to pay suppliers or contractors in Bitcoin to save on fees, you need to learn how to buy and sell Bitcoin at a low cost in a secure way.
Buying Bitcoin has become easier than ever and in more countries than ever. In the past, buying Bitcoin could mean long wait times and high fees, but as more cryptocurrency exchanges enter the market offering different features and ways to save, the costs have been coming down. Today, you can find the cryptocurrency exchange offering the features you value the most. There are a few things you should know about how buying Bitcoin works and some of the features you should expect from a cryptocurrency exchange.
Where Cryptocurrency Exchanges Charge Fees
Cryptocurrency exchanges make their money by charging fees on a variety of transactions. They may charge a fee when you deposit fiat currency, when you buy or sell cryptocurrency, or when you withdraw fiat currency off of the platform and back into your bank account. Depending on how you trade, getting a better deal on one or the other can help you save.
Free Cryptocurrency Transfers
Some cryptocurrency exchanges offer zero-fee crypto transfers, i.e., it’s completely free to move your cryptocurrency off of the platform and onto a wallet. This is great for almost every Bitcoin user. While cryptocurrency exchanges offer some security, they can be big targets for cybercriminals.
If you plan on holding Bitcoin or another cryptocurrency as a long-term investment, it’s advisable to shift it to a hardware wallet that’s offline and secure. That transfer should be free.
Cryptocurrency Exchange Security
That said, cryptocurrency exchanges are generally a secure place to store your coins on a short-term basis if you use them regularly to trade or complete transactions. Cryptocurrency exchanges should keep the large majority of the coins stored on their platform offline to mitigate cybercrime risks.
Know Your Customer Procedures
When you first sign up to a cryptocurrency exchange, you will probably need to prove your identity by offering a photo of your ID and a photo of yourself with your ID. This is to help prevent cryptocurrency from being used as a way to launder money.
Armed with this information, you should now be well on your way of buying Bitcoin.
