Cryptohumb.co

Guide

How to buy and store Bitcoin (BTC)

Bitcoin (BTC) is a SHA 256 POW (Proof-Of-Work) cryptocurrency using peer-to-peer technology to work without the need of intermediaries. This article shows you how to buy and store Bitcoin.

Step 1: Create a Wallet

In order to receive, store and send Bitcoin, you need to have a Bitcoin wallet. As of February 2020, cryptocurrency wallets can be divided into five different types: online, mobile, desktop, hardware and paper wallets.

1.1 Online Wallets

Online wallets, aka. web wallets, are usually accessible via your web browser (e.g. Coinbase.com, Luno.com, Bitpanda.com).

On the one hand, sensitive coin information, including private keys, is stored and shared with a third party, which makes the wallet more vulnerable to theft and hacking attacks. On the other hand, these wallets are easy to use and the creation is usually free of charge.

1.2 Mobile Wallets

Mobile wallets are mobile applications that have to be installed on your cell phone (e.g. Coinomi, MEWconnect, Enjin).

Private keys are stored locally on your phone and are not accessible for third-parties. Crypto payments can be made everywhere with an Internet connection. If your mobile phone is infected with a virus, you can lose your coins.

1.3 Desktop Wallets

Desktop wallets are computer programs that have to be installed on your PC or laptop (e.g. Exodus, MyEtherWallet, Atomic Wallet).

These wallets can only be accessed from the computing device where the software is installed. They are more secure than other wallets, especially if the device is not connected to the Internet.

1.4 Hardware Wallets

Hardware wallets provide the highest safety and security level of any wallet (e.g. Ledger Nano S, Ledger Nano X, Trezor One).

Critical information, including private keys, are kept separate from internet connected devices and can’t be accessed from outsiders. Expect to pay between 50 and 120 USD.

1.5 Paper Wallets

A paper wallet is basically a copy of your public and private key on a sheet of paper (e.g. bitaddress.org, bitcoinpaperwallet.com)

Coin information is stored offline and can’t be viewed from third-parties. If you every lose your paper wallet and you have no backup, you will lose your funds.

Step 2: Buy Bitcoin

You can buy Bitcoin in exchange to fiat currencies (fiat-to-crypto) or in exchange to other crytpocurrencies (crypto-to-crypto) on various cryptocurrency exchange platforms and brokers all over the internet. After you have made your payment, you will be able to send those coins to your wallet.

2.1 Centralized Exchanges (CEX)

Centralized cryptocurrency exchanges work as the middleman in the trading process by fulfilling trading orders and storing funds. (e.g. Binance.com, Kraken.com, HitBTC.com)

Pros: customer support, high liquidity
Cons: hacking attacks, phishing scams, government regulations

2.2 Decentralized Exchanges (DEX)

Decentralized cryptocurrency exchanges, aka. peer-to-peer exchanges, provide a platform where two individuals can exchange their funds directly and without the need of intermediaries (e.g. LocalBitcoins.com, Waves.Exchange , Bisq.network)

Pros: low fees, no government oversight, high level of security
Cons: lack of customer support, bad UI

2.3 Brokers

Cryptocurrency brokers work as your trading partner and therefore trade directly with you (e.g. Coinbase.com, Bitpanda.com, Coinmama.com).

Pros: user-friendly, guaranteed price, fast transaction
Cons: high fees, hacking attacks, phishing scams