Bitcoin Basics: How to buy bitcoins
Here's a few ways that you can get involved in bitcoin by buying some bitcoins of your own.
Keep in mind-
- You don't need to buy whole amounts of bitcoin, it is divisible into smaller units called bits that represent a 1 millionth of a bitcoin.
- Leaving money on an exchange poses a risk of theft. While okay for the inexperienced who want to test the waters or for small amounts, large amounts of bitcoin should be secured in a cold wallet for security.
Coinbase is the largest US exchange, it operates as a regulated exchange, is insured, and has been able to withstand attacks in the past. Coinbase offers two factor authentication for users, and also covers mining fees for transfers. The downside to coinbase is that it does require KYC / AML due to operating as a regulated exchange.
This is a great choice for those who want to allow others to secure their bitcoins or buy from a retirement account. This is likely to be highly regulated and the ETF will be expected to demonstrate proof of control through the signing protocol. This will be even more secure due to the fact that bitcoins will rarely touch the network and 100% of all coins can be kept in cold storage. Unfortunately this option is not available yet, but for those wishing to invest now there's GBTC currently trading at a significant premium.
Local Bitcoins is a peer to peer exchange which simply facilitates finding a local person with which to trade your local currency for bitcoin instead of transacting with the exchange. The benefit is that you're avoiding the single point of failure of an exchange, embracing the decentralized nature of bitcoin, and no need for any bank AML / KYC checks. If meeting up with a stranger, make sure to take precautions to ensure your safety, by meeting in a public place with lights, cameras and other people.