Bitcoin Made Simple: The Easiest Ways to Buy & Use Bitcoin
- Your Guide to the Tax Rules Around Day Trading Crypto - March 23, 2020
- MyFX Markets Crypto Margin Trading - February 28, 2020
- Estonian Company ITEZ Enables BTC Trading Via Visa/MasterCard Credit Cards - January 24, 2020
Bitcoin is an exciting new way to manage your personal finances with many advantages for ordinary consumers. But for some people it can seem quite techie and complication, and this can be intimidating and put them off using it.
In actual fact, using Bitcoin is only as difficult as you choose to make it. Because this new technology offers much greater freedom and personal control over the way you manage your finances there are lots of advanced things that you can do, as well as lots of technical terminology that you will come across if you dig down into how it all works. But none of that is necessary – its there for you to choose to look into if you want or ignore if you want, so there really is no reason to be put off using bitcoin because its too difficult or complicated.
In this article I will show you the easy way to buy and use bitcoin, which anybody can do without difficulty. Don’t worry if you are completely new to this subject – I will tell you everything that you need to know to get started, and I think you will agree that it is really quite simple.
Exchanges and Wallets
There are only two things that you need in order to get started with Bitcoin: you need an exchange to buy some coins from and a wallet to store them in. To make things even easier, there are two popular and great quality services which fill both roles: Coinbase and Xapo. In addition to providing an all-round service, both of these wallets will pay the network transaction fees for you when you make a payment, meaning that you can send and receive money without having to worry about any kind of fees at all.
Coinbase is great for users in North America and Europe, offering a range of ways to buy Bitcoin including bank transfers and credit card payments. The fees for buying coins are reasonable and you can make instant purchases if you want. If you sign up using the link at the start of this paragraph then you get 10 USD worth of coins for free if you buy $100 worth (or EUR, GBP or whatever your local currency is).
Xapo is a similar service which allows you to buy coins as well as providing a good quality wallet service and a store with special offers on some great products available to buy with digital currency. You can easily create and manage multiple wallets as well, if you want to.
You will probably need to verify your identity in some way in order to buy your first coins, just as you would if you were going to open an account with a more traditional financial service provider. If you would like to explore other options don’t forget to take a look at our bitcoin wallet comparison.
The Only Terminology You Really Need to Know
You don’t really need to know much to start using your newly purchase coins. Aside from wallets and exchanges, which I’ve already introduced you to, here are the only terms you really need to know about:
Address: This is like an email address but for money, and is what you give to other people so they can send coins to you via the bitcoin network.
BTC: This is a currency code, used in the same way that ‘USD’ is used as shorthand for ‘United States Dollars’.
Bits and Satohis: These are smaller units of one coin, like pennies or cents. There are others too, but these are the ones you are most likely to run into. A ‘bit’ is 1 millionth of a coin, while a satoshi is the smallest possible unit and is equal to one hundred millionth of a coin.
Spending Your Coins
Spending your coins at a store which accepts BTC payments, or sending them to a friend or family member, really is as simple as entering their address and the amount you want to pay, and then clicking send. You may also be asked to enter your password or something like that to confirm your payment, depending on which wallet you use and what your security settings are, but there is really nothing complicated about it.
Addresses are a bit long and difficult to type, so if you don’t like the hassle of having to copy and paste (which can be fiddly on some phones, for example) there are even simpler options.
One of these options is to use your phone to scan a ‘QR code’. If you aren’t familiar with these they are just square images which contain information that your phone can read. You can see an example of this to just to the right of this text. A store may provide a QR code for you at the checkout to make it as easy as possible for you to make the payment. Both Coinbase and Xapo allow you to scan these codes with the app they provide, so you don’t need to manually enter the address and amount – once you’ve scanned you just confirm that you want to make the payment and its all done.
Coinbase also lets you send payments to people using their email address in the same way that users of services like Paypal send payments to each other. If you and the person you are sending money to use Xapo, then you can enter their username instead of an address.
You can even order a debit card that will let you spend your coins at any store that accepts regular credit card payments. Both Coinbase and Xapo have their own cards, although the Coinbase one is currently only available in the USA.
Congratulations! You now know how to use Bitcoin!