This article will guide you while choosing a secure intermediary with a profitable rate.
From its inception in 2008 until the first significant price increase (up to USD $30 per token), Bitcoin was perceived as a virtual toy. In 2011, following the rise in the value of the token, the first cryptocurrency exchanges appeared, and then exchangers. At first, on most platforms, trading was only possible between cryptocurrency pairs. Single platforms where it was possible to buy Bitcoins for fiat money (dollars, euros, pounds etc.) charged high fees. Now the situation has changed: there are numerous ways, but there are also more scams.
Since Bitcoin exists only in digital form, it requires appropriate hardware or software for being stored. A cryptocurrency wallet is a portion of a distributed ledger (Blockchain) that contains a record of the state of an account and all previous transactions. Some wallets function with multi-currencies, while others are designed only to hold Bitcoins. If you transfer Ethereum or another currency to such a wallet, it will irrevocably disappear.
A digital wallet, in simplified terms, consists of a public address or key and a private key or password. The address must be provided to a second party for a transaction to take place, and the secret key confirms your right to control the currency.
All wallets are divided into two broad categories: hot (with constant internet access) and cold (without an active internet connection). The first option is more convenient for trading, but does not exclude vulnerability to hacker attacks. The second method is suitable for long-term storage of large amounts of Bitcoins.
Among hot wallets are the following:
Personal accounts on crypto-exchanges. They are protected by several encryption protocols, and the account is protected by two-factor personal identification. Passport verification ensures security in case of password loss. To create such a wallet, simply register a personal account and click “Create”. The public address will be generated automatically.
Web and mobile applications can be run even without installation. They have an intuitive interface and many features are available for managing accounts on exchanges, as well as tips for trading. The disadvantage is susceptibility to frequent hacks.
Desktop Thin Wallet is software that must be downloaded to your computer. The public key is tied to an IP address, so this wallet is more secure than mobile versions. However, due to the incomplete loading of the Blockchain, fraud is still possible.
Cold wallets include the following:
Paper. Quite often the alphanumeric key is additionally converted into a QR code. The disadvantage is the need to create an additional digital wallet, in order to buy or sell coins (with the exception of direct transactions, but in this case it is impossible to verify the authenticity of BTC without an internet connection).
Desktop Thick Wallet is software that needs to be installed on a PC. Downloading a complete blockchain node in conjunction with binding the software to an IP provides a high level of security, but the process is time consuming. In addition, you will have to download the last blocks of transactions and ensure the latest updates are installed on your antivirus program.
Hardware wallets cost around USD $100 or more. Popular and relatively inexpensive open source models are the Ledger Nano S, KeepKey and Trezor. The public and private keys are already generated during the production of each instance. At the time of writing this article, the mentioned hardware wallets have never been hacked.
In addition to mining and receiving rewards for verifying transactions, BTC can be bought with other cryptocurrencies or fiat money in three ways:
Trading on a cryptocurrency exchange.
Direct deals with sellers without intermediaries.
Each of these methods have pros and cons.
Transactions on cryptocurrency exchanges are controlled by the exchange’s management. If the site is trusted and has a good reputation, customers are less likely to be dissatisfied with their service. Account of every new member is carefully verified. The system also detects suspicious activity and other actions that are not typical for traders in order to stop fraud in a timely manner.
EXMO offers investors to buy Bitcoins in the following way:
On the website https://exmo.com, create an account and verify it. Procedure: click the “Register” button located at the top right corner, create a username and password, specify an email address. Check the box to confirm that you agree with the terms of service. Enter the ‘captcha’ correctly and click the Register button. Now, check your email and follow the link to confirm your account.
In the settings section, it is recommended that you enable confirmation by SMS at login, 2FA authorization and IP whitelist. These are additional ways to protect your personal data.
In order to deposit and withdraw funds, as well as trade on the exchange, you need to go through a simple verification procedure: provide a photo/scanned document confirming your identity, submit necessary data and send a selfie photo. The process of verification can take up to 24 hours.
Go to the Wallet tab, where you can top up your account. When choosing any option, the site redirects the user to the transfer page with instructions on how to use and trade with each currency, card or e-wallet.
In the Trades section, located in the upper right corner, use the filters to select a currency pair. At the bottom left corner, a Buy and Sell column is located with currency calculators (the transaction fee will be included in the total amount). Limit, Market and Stop are the names of orders that can be used. Urgent purchases can be made using Market and should you wish to wait for a good deal, use Limit.Stop is suitable for automatic trades. After the order is executed, the coins will be transferred to the trader’s account.
The Quick exchange section is suitable for instant transactions using the exchange rate.
The following payment methods are available to users:
Bank cards – VISA and MasterCard.
Bank transfers – Bacs, Chaps and Faster Payments.
Payment systems – Sepa, AdvCash and Payeer.
EXMO Gift Card is a tool for transferring cryptocurrency funds between EXMO users.
Benefits of buying on the exchange:
Traders can buy almost any amount of cryptocurrency, there are no restrictions on the amount.
One of the safest options, high level of protection against fraud.
Many options for replenishing your balance.
Relevant prices are offered to traders.
Ability to create pending purchase orders at a desirable price.
The trading process is simple and not time consuming.
The need for registration and account verification.
Buying Bitcoin is quick and easy with online exchange services. The procedure looks like this:
Login to the official website of the exchanger.
Select the type of deal (if there are options offered).
The public key must be entered in a special form.
In the payment window, the bank card details need to be confirmed.
On average, funds are credited within 30-60 minutes.
Benefits of buying from an online exchanger:
Simple, no registration required.
Numerous payment methods offered.
The limitation on the number of purchased Bitcoins depends on the reserve of the exchanger.
Not the most profitable option.
LocalBitcoins.com is an established and relatively reliable site for finding sellers and buyers.
Benefits of buying P2P:
High anonymity of the operation.
Possibility to pay in cash.
There is practically no infrastructure on the market, there are a few trusted sellers who are located only in large cities, the need for a personal meeting.
High risk of fraud.
Finding a seller and the acquisition process itself takes significantly longer than the other two options.
The only way to check a partner’s reputation is to read reviews about them.
Most exchanges and exchangers work with several payment systems and services at once, so you can easily buy Bitcoin using pounds.
In principle, the procedure for purchasing Bitcoin with pounds is not very complicated and is suitable for all of the above payment methods. Instructions on how to buy Bitcoins with pounds are outlined below:
Select an exchange or exchanger that allows replenishment of the balance in GBP. For example, on the EXMO exchange, account funding is available using bank transfers Bacs, Chaps and Faster Payments.
In this case, you simply select the method of replenishment. The system will direct you to a page with a form that contains the necessary details for payment.
Transfer the required amount to the trading platform and purchase cryptocurrency.
As you can see, the process for buying Bitcoins with pounds is extremely simple.
Each method has advantages. When buying on a trusted exchange, the user does not have to worry about the legality of transactions. Almost unlimited tokens available. The balance can be replenished from a bank card, electronic wallet, crypto wallet and through payment systems. The exchange rate offered is the most profitable for traders; you can transact once a desired price is reached. The disadvantage is the need to register an account.
Exchange services are available around the clock and without registration. But using their services may not be the most profitable course and there is a risk of being scammed. The number of tokens available is usually limited. The P2P method of dealing is most risky, although it is possible to pay in cash, and almost 100% anonymity offered. The disadvantages include safety concerns for sellers and the buyers as well as the need to find a second party for the transaction.
EXMO exchange reminds users that investments in cryptocurrencies are high-risk, the company is not responsible for your losses as a result of your trading activity and operations. Please remember that each user is personally responsible when choosing third-party services for exchanging and trading cryptocurrencies.