- >Ask CryptoVantage: Why is Buying Bitcoin So Hard?
Ask CryptoVantage: Why is Buying Bitcoin So Hard?
Buying bitcoin for the first time can be intimidating because the concept of bitcoin itself is complex and different from traditional currencies. Bitcoin is also quite different from physical assets such as gold and real estate – you can’t see or feel a bitcoin! On top of that, choosing where and how to buy bitcoin can be a daunting task, but if you’re willing to put in the time and effort to learn the basics, the process of buying bitcoin can be easy. This article will help you understand what those basics are so that buying bitcoin feels less intimidating.
Billy Garrison | Oct 13, 2020
The Learning Curve
If you are new to bitcoin you might be wondering where to start. Understanding bitcoin comes with a learning curve and we recommend you take some time to learn how it works. Having a better understanding of bitcoin will make it easier to buy because you will know the “why” behind the steps involved.
First, you will want to know about bitcoin transactions and the blockchain because when buying bitcoin you will encounter things like transaction fees and the need to wait for transaction confirmations. Bitcoin transactions consist of cryptographic signatures which contain public and private keys. Your private keys control your bitcoins, and if anyone else has access to your keys then they can spend your bitcoins. So, it is very important to have a good understanding of bitcoin security. Bitcoin wallets control your public and private keys for you, and each wallet has different trade-offs between security and user-friendliness. Be sure to choose a wallet that has the features you require. Check out our review of the Best Cryptocurrency Wallets.
There are multiple ways to buy bitcoin, from bitcoin ATMs to local sellers, but most people choose to buy their bitcoin from an online exchange. Bitcoin exchanges are marketplaces that allow users to trade traditional currencies for bitcoin and vice versa. Some businesses buy bitcoin from, and sell bitcoin to, their customers directly. These businesses are not technically exchanges but are often called exchanges because of their similarity from a user’s perspective. When we mention exchanges in this article, we are also including this type of business.
Once you have learned the basics of bitcoin, the next step is picking an exchange to buy bitcoin from. This can add to the difficulty of buying bitcoin because there are so many exchanges to choose from. Take a look at the CryptoVantage list of Best Crypto Exchanges to help make your decision.
When you sign up with an exchange, you will typically be required to prove your identity by submitting photo identification along with some additional personal information. Exchanges are required to know the identities of their users – a rule known as Know Your Customer (KYC) – due to Anti Money Laundering (AML) laws. This can be a major hurdle for newcomers since it is a much more involved registration process compared to regular websites. However, once you have registered and proven your identity, you will be able to continue buying bitcoin without repeating the process. Check out our exchange reviews for more information about the specific registration and identification processes of many popular exchanges.
You may be hesitant to buy your first bitcoin because you are worried about the responsibility that comes with keeping it safe. With a little research, you will find there are plenty of resources available to help with this. The most important thing to keep in mind is that whoever has access to your private key can spend your bitcoins – so be sure to protect your keys! Check out our guide “How to Spot Cryptocurrency Scams” to protect yourself from scammers trying to steal your private keys, and remember to keep multiple physical backups of your keys.
It may seem like a lot at first, but many of the things that make buying bitcoin difficult only need to be done once: You only need to learn the knowledge requirements once, and you only need to register with an exchange once. After that, you can buy bitcoin with ease.
Once you’ve taken the leap and bought your first bitcoin, check out our answer to the question “I bought bitcoin, now what?” for tips on what to do next!