Bitcoin for Dummies: A Beginners Guide to Your First Bitcoin Investment

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What the heck is happening with Bitcoin's insane record run? How can you get in on the action?

Cryptocurrency has been dominating headlines in recent months, with Bitcoin topping $46K this past week, accompanied by seemingly thousands of articles proclaiming it to be a financial revolution or nothing more than a short-lived fad.

In reality, cryptocurrency has been gaining traction for years, especially as more Millennials are drawn to the appealing concept of decentralized, digital currency.

Getting Started

If you want a simple and easy to follow bitcoin for dummies explanation, how you can get bitcoins and how it bitcoins can help you, without floundering into technical details, this bitcoin for dummies guide is for you.

10 years ago if someone told you about digital money, you would look at them so confused. Imagine a new currency where you can only use it online, store it online and it was completely intangible.

Well 10 years ago it was in the process of becoming a thing and in 2008 it made its debut. The first digital currency is Bitcoin. This bitcoin for dummies guide will explain how the system works and how you can make your first bitcoin investment. It will also direct you to resources that will help you store and use your first pieces of digital currency.

Bitcoin for Dummies: What is Bitcoin?

best bitcoin exchanges

Bitcoin is a cryptocurrency that is open source and created for peer to peer money transfers. Imagine Paypal or Venmo without a central authority. No one to tell you what to pay, how to buy, when to buy with no worries of a huge fee.

Now imagine all your transactions becoming open to the public eye through pseudonymity. Bitcoin was created to combat the financial crisis that happened as the banks had too much power.

Satoshi Nakamoto, the creator of Bitcoin created it to give the people the power of their money. No need for banks to hold your money. You hold your money in your own wallet.

Your wallet can consist of a paper wallet with just your Bitcoin hash address, a mobile/computer wallet or a cryptocurrency hardware wallet.

Benefits

  • Quick: One major advantage of cryptocurrencies, in general, is that they are quick. If you buy something, the seller will get their coins pretty quickly. If you purchase with a Visa, they need to wait for the transaction to be accepted, then settle then go to your bank account in 3 days.
  • Cheaper Transactions: Paypal and payment processors generally charge 3-4% of the fees and charge that from the seller. In this case, the buyer is paying the fees but it amounts to fractions of a percent.
  • Paperless: Going into the age of digital, paperless is becoming bigger as more people are liking it. Digital currencies do not need a reason to be with paper as everything is done on your phone or computer.
  • Irreversible Transactions: Some people think irreversible transactions is a bad thing but there are ways to go around it. For sellers, it is a great idea because people cannot make unnecessary chargebacks as we see it being done on sites like eBay and Amazon. To make sure you’re not sending it to the wrong address, always send a minimal amount to the hash address to make sure it is correct.
  • Appreciating Asset: With the way things are going, it seems like Bitcoin can’t keep going up forever. To be frank, not everything will go up forever. However, the difference between fiat and Bitcoin is that the government keeps printing more money while Bitcoin has a set amount that there will ever be which is 21 million total coins. 

How to Buy Bitcoin

cryptocurrency 101

1. Coinbase – Best Overall

Coinbase has emerged as one of the high-profile names in the Bitcoin world placing itself on the top as a one-stop solution for Bitcoins. Coinbase is a San Francisco based digital asset exchange that lets you turn your fiat currency into cryptocurrency. It is the main entry point into the cryptocurrency space for most people. It’s currently is the quickest and easiest way to buy Bitcoins in the US.

Create your Coinbase account and get $5 in free Bitcoin at Coinbase.

coinbase
Details
  • Fees: Coinbase charges 3.99% fees for credit/debit card purchases but you can get your coins instantly. 1.49% if you buy from your bank account.
  • Pro: “Instant Buy” option available with credit card or debit card
  • Con: Purchases made with bank transfer can take up to 5 days to complete
Summary
  • User Interface: Easy to Navigate
  • Fees: Average
  • Reputation: Trusted

If you wanted to create a Coinbase account you can create a Coinbase account by clicking this link.

At a glanceGo
Coinbase
Offer: Earn up to $28 worth of free crypto

Coinbase offers over 25 cryptos to trade, invest, or stake in. If you want to diversify your income sources through cryptocurrencies, Coinbase is an ideal platform to buy, sell, or even build your crypto portfolio.

CREATE ACCOUNT, GET $10
coinbase

Related: Coinbase vs eToro: Cryptocurrency Trading Comparison

2. Robinhood – Best for No Cost

Robinhood is a great option for those who want to buy Bitcoin but want to avoid paying any fees. Robinhood is an investing app that allows you to buy and sell Bitcoin with no commissions.

If you’re already familiar with how to buy and sell stocks, then buying Bitcoin on Robinhood will be super easy. In addition to buying Bitcoin (BTC) — you can buy Bitcoin Cash (BCH), Bitcoin SV (BSV), Dogecoin (DOGE), Ethereum (ETH), Ethereum Classic (ETC), and Litecoin (LTC).

Overall, using Robinhood to buy Bitcoin is smart, easy, and straightforward. Plus, you’ll even give you a free stock worth up to $225 for joining. Then you can sell that stock and buy free Bitcoin with it.

robinhood crypto
Details
  • Fees: Free
  • Pro: Easy to use and you can buy or sell bitcoin without commissions.
  • Con: Limited supported currencies and no crypto wallets.
Summary
  • User Interface: Easy to navigate and fully customizable
  • Fees: Low
  • Reputation: Trusted
At a glanceGo
Robinhood
Offer: Get a free stock worth up to $200

Robinhood has commission-free investing, and tools to help shape your financial future. Sign up and get your first stock worth up to $200, free.

OPEN ROBINHOOD ACCOUNT
free stock robinhood

Related: Robinhood Review: My Experience Day Trading on Robinhood

3. BlockFi – Best for Earning Interest on Your Crypto Holdings

BlockFi is one of the easiest places to buy, sell and earn cryptocurrency. The exchange allows users to earn up to 7.5% APY on their cryptocurrency and offers a commission-free trading environment, similar to Robinhood. BlockFi provides users the opportunity to earn interest on their crypto holdings instantly, which had never been done before.

So what if you need customer service? BlockFi offers support in three avenues: live chat, email, and phone lines with an agent during weekdays.

Details
  • Fees: There are no hidden fees, no minimum balances, and no reason to wait.
  • Pro: With a BlockFi Interest Account (BIA), your cryptocurrency can earn up to 7.5% APY. Interest accrues daily and is paid monthly.
  • Con: None, BlockFi is committed to trust and transparency. BlockFi has one of the built a best-in-class compliance program to protect your assets.
At a glanceGo
BlockFi

BlockFi offers a cryptocurrency exchange, interest-bearing accounts, and low-interest-rate loans worldwide. There are no transaction fees on trades, and you won't have to worry about hidden fees or minimum balances.

GET STARTED
gemini

4. Kraken – Best for Security

As one of the largest and oldest Bitcoin exchanges in the world, Kraken is consistently named one of the best places to buy and sell crypto online, thanks to its excellent service, low fees, versatile funding options, and rigorous security standards — but this is only part of the story. They’ve been at the forefront of the blockchain revolution since 2011.

kraken
Details
  • Fees: The fee per transaction for buying Bitcoin is 0.9%.
  • Pro: Lightning-fast engine allowing 1,500,000 transactions per second gives users a great trading advantage.
  • Con: No credit/debit card deposits.
Summary
  • User Interface: Sleek design, a good overview of the trading market with lots of customizations.
  • Fees: Low
  • Reputation: Trusted

If you are trying to take your crypto investments to the next level, you can get started with Kraken here.

At a glanceGo
Kraken

New to Bitcoin and cryptocurrencies? No problem. Crypto may seem confusing, but Kraken can help. Sign up today and buy 50+ cryptocurrencies in minutes. Get started with as little as $10.

GET STARTED
kraken

5. Gemini – Best Beginner Friendly Platform

Gemini is the best place to buy Bitcoin with debit card instantly. Gemini makes it simple to research the crypto market, buy Bitcoin and other cryptos, and build a portfolio for the future of money.

You can also buy DOGE on the platform and is one of the only exchanges where your deposits are FDIC-protected.

gemini
Details
  • Fees: Gemini charges 3.99% fees for credit/debit card purchases but you can get your coins instantly. 1.49% if you buy from your bank account.
  • Pro: You can buy Bitcoin right now with a debit card, very easy to use app-based interface, available in all 50 states, you can even earn interest on your crypto.
  • Con: Customer service support is not the best.
Summary
  • User Interface: Easy to navigate and fully customizable
  • Fees: High
  • Reputation: Trusted
At a glanceGo
Gemini

For casual investors, Gemini offers a trading platform that’s easy for beginners, an advanced platform for serious traders, and a portal for peer-to-peer trading.

GET STARTED
gemini

Steps to Purchasing Bitcoin

Image source: bitemycoin.com

First and foremost, you need a Bitcoin wallet. As you can guess, this is also tangible and is either on your computer or phone. You can also have a hardware wallet. The wallet will have the ability to store, send or receive your cryptocurrencies. When you have found one that you like, go ahead and pick an exchange to buy your Bitcoins.

Coinbase is the easiest to start with. You simply create an account and put your bank account or credit card information in. Once you do that, you can head over and purchase. In the beginning, there will be a limit on how much you can buy which is a good security measure. When you purchase and get them all into your account, go ahead and send it to a wallet of your choice. Having a wallet makes you the bank of your own coins. bitcoin for dummies

I hope you liked my simple and easy to follow bitcoin for dummies guide. Now the real question is, will you invest in bitcoin?

coinbase

About the author

Brian Meiggs
Brian Meiggs is a personal finance expert, and the founder of My Millennial Guide, a personal finance site helping you put more money in your pocket. He helps millennials follow the smart money in order to increase their earning potential and start building wealth for the future. He regularly writes about side hustles, investing, and general personal finance topics aimed to help anyone earn more, pay off debt, and reach financial freedom. He has been quoted as a top personal finance blogger in major publications including Yahoo! Finance, NASDAQ, Discover, MSN Money and more.
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2 COMMENTS

  1. This is the perfect website for anybody who hopes to understand this topic.

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    need to?HaHa). You certainly put a fresh spin on a topic which
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