If you want to buy Bitcoin and start your crypto investing journey, one way to do that is by signing up to a crypto trading platform. It’s a fast and easy way to buy some crypto without going through the technical details of how cryptocurrencies and blockchains work.
Bitcoin (BTC) buying guide
To start your crypto investing journey, let’s talk about where & how to buy bitcoin – ultimate BTC buying. This article will focus on buying through a crypto trading platform. Here we’ll also talk about how Bitcoin works, when to buy or sell crypto and how to be systematic in your investing approach.
First, using a crypto trading platform is simple and straightforward. For example, through Coinberry you can quickly go through the following steps to start your crypto investing journey:
- Sign up to Coinberry
- Fund your account through Interac e-Transfer or wire transfer
- Buy some crypto (start for as little as 50 CAD)
To create your account, you’ll need to verify your identity (prepare your government-issued ID and video verification selfie). It’s like opening a new bank account where your identity has to be confirmed first.
After signing up, you can now then fund your account through Interac e-Transfer or wire transfer. After you fund your account, the next step is to buy some Bitcoin. Doing this only requires a few clicks or taps. Then, you should confirm the details before you finalize the transaction.
Why Canadians choose Coinberry
You can buy Bitcoin through several crypto trading platforms. They essentially carry out the same functions when it comes to helping people easily buy and sell crypto. It’s like they act as a huge marketplace where continuous buy and sell transactions happen.
What makes Coinberry stand out is that it has zero CAD deposit and withdrawal fees. As a result, investors save money (and they can use that money on buying more crypto). Coinberry has been able to sustain zero CAD deposit and withdrawal fees because of what happens behind the scenes.
Behind the scenes, Coinberry buys Bitcoin at lower prices at bulk through their network of liquidity providers and then resells that at the listed prices. It’s like they buy on wholesale at discounted prices and then sell the crypto on retail (where they make the profit). The result is that their customers don’t have to pay for the withdrawal and deposit fees.
In contrast, other crypto trading platforms charge a small percentage fee for each transaction. Although it’s only a small percentage, the cumulative amounts will still be significant. It’s especially the case when you plan to go long term in your crypto investing journey. The transaction fees will accumulate which you could have invested on buying more Bitcoin.
How Bitcoin works and what is blockchain
Now that we’ve talked about how to buy Bitcoin, you might also want to learn how Bitcoin works and what blockchain technology is.
First, Bitcoin is digital money. It’s also peer to peer and decentralized. What this means is that you don’t need a middleman or a central financial institution. Through Bitcoin, you can directly participate, send and receive digital money, and pay for goods and services.
For Bitcoin to be useful, it should allow and facilitate transactions. Those transactions are recorded in the blockchain. To illustrate, each transaction becomes a block and added to a chain (which is why it’s called blockchain). This blockchain facilitates the recording of transactions and the tracking of assets.
The key elements of a blockchain are:
- Distributed ledger technology
- Immutable records
- Smart contracts
Distributed ledger technology
This shared public ledger records each transaction only once (which gets rid of the duplication of transactions and records). In addition, cryptography enforces the integrity and the chronological order of the blockchain. Cryptography helps secure the network as well as protect the individual users of the blockchain.
Another key element of the blockchain is immutable records. Immutable means unable to change or unchanging over time. This means no participant can tamper with a transaction once it’s recorded to the shared public ledger.
Aside from the immutable records and distributed ledger technology, another key element of blockchain is smart contracts. These are stored on the blockchain and executed automatically according to a set of rules. These smart contracts are similar to conventional contracts where we define the conditions before something happens (e.g. asset transfers, payments). In smart contracts though, they’re executed automatically once the defined conditions are met.
Should I buy Bitcoin now?
After learning about Bitcoin and blockchain, the next step is to decide whether to buy Bitcoin now or wait for a bit longer. After all, you might have heard that timing is everything in the crypto investing world.
But because of Bitcoin’s volatility, it’s impossible or extremely difficult to time the market and take advantage of the trends. Also, what works today might not work tomorrow because of wild fluctuations, government regulations, new market dynamics (such as new competition), and several economic factors.
What should you do then? You can always start small if you want to minimize the risk. For instance, you can start for as little as 50 CAD and watch what happens. Once you start feeling comfortable, you can increase your investment anytime by buying more Bitcoin or exploring other cryptocurrencies.
After you get a “feel” of how crypto investing works, you can now explore a few different investing strategies. You can start with dollar cost averaging where you consistently buy small amounts of Bitcoin every day, week, or month (instead of putting in a huge lump sum). This way, you avoid the huge swings and huge losses in case Bitcoin’s price drops.
After you tried or learned about dollar cost averaging, you can explore advanced investing strategies or try to analyze the crypto market (which is impossible now given the market’s early years and lack of maturity and stability). Or, you can pursue other opportunities once you’ve set up an automatic approach to buy more Bitcoin consistently.