Buying Bitcoin

How to Buy and Store Bitcoin

Coinbase - The easy way

The easiest way is not what I will recommend on this site, especially for those looking to use Bitcoin as a long term investment.  However, it is a very popular method so I will mention it.  There are apps, such as Coinbase, which allow you to quickly enter a credit card and buy bitcoin in minutes with around a 4% fee.  


Exchanges

This is the method I recommend. Setting up an account on an exchange makes buying and selling bitcoin and other cryptocurrencies much cheaper.  I recommend a reputable exchange with high volume. My personal experience is with GDAX, but there are many other popular choices such as Kraken or Bitfinex.  Unless you plan to day trade, choosing any major exchange will work about the same.  Typically fees on exchanges are much lower, such as only 0.25% on GDAX for a market order.

Depositing on an exchange and performing a market order is fairly easy.  For orders of several thousand dollars or more, you may get a slightly better price splitting the order into several small market order spread apart by several minutes.


Other alternatives

Bitcoin can be purchased in other ways as well.  Localbitcoins is a popular service for peer to peer bitcoin sales.  Bitcoin ATMs are also appearing across the country.  I would not recommend ATMs at this time unless you are willing to pay a large premium for your bitcoins. 


Bitcoin Storage

"I bought Bitcoins! Am I done?" Not quite. Storage of your coins is important.  Leaving your coins on an exchange is a small risk.  It is very unlikely but possible for an exchange to be hacked and for your coins to be lost, as your coins will be stored along with all of the other users. It is considered safer to move your coins to a "wallet."  Software wallets are usually free, you just need to be careful about securely storing your log in information.  Having some of your coins on a mobile phone wallet can also make it very easy to send and receive bitcoin.  Hardware wallets cost money, but they are considered the most secure way to hold bitcoin.  If you hold a significant amount of your net worth as cryptocurrency I recommend the use of a hardware wallet for maximum security.  My personal coins are on a Ledger Nano S hardware wallet, with some for spending on a Blockchain.info app on my phone.