Preamble: Before asking the question “How to?”, you should ask the question: “Why Bitcoin?” and the best answer to that question has to be the book “The Bitcoin Standard” by Saifedean Ammous. An excellent piece of work: https://amzn.to/39j2jX0
This is a walkthrough for a safe purchase and storage of Bitcoins
Obviously you don’t have to use our services and you can easily get going in the crypto markets without our help.
This walkthrough should help you find some viable options, so you don’t end up losing money to one of the many scammers in this business.
1) Opening an account with a reputable and secure exchange.
We recommend any of the following exchanges:
– Bitcoin.de – Bitcoin.de is the only exchange that’s based in Germany. Because of German laws, trading on Bitcoin.de does not work the same way as on a traditional exchange, where you first wire money to the exchange’s bank account, which will then be credited to your online trading account in order for you to be able to purchase Bitcoin.
The way it works with Bitcoin.de is kind of like eBay. Which means the buyer pays the seller directly and Bitcoin.de only provides the infrastructure and acts as an escrow service, to ensure the Bitcoins exist and change hands as soon as the fiat money transfer has been made.
Since this is not as convenient as traditional exchanges, Bitcoin.de partnered up with Fidorbank from Munich which helps solve this problem:
If both buyer and seller have an account with Fidorbank, then fiat money and Bitcoins are transferred in real time, basically just like with a real exchange.
I often use this possibility, because the money never leaves my bank account until I make a purchase and I don’t have to park it at some random exchange to buy Bitcoin.
– Kraken.com – Kraken.com is another exchange, where its users can trade various other cryptocurrencies alongside Bitcoin. Contrary to many other exchanges a direct conversion from crypto to fiat (USD, Euro or Swiss Francs) is possible here. Most other exchanges require you to exchange your altcoin to Bitcoin first, before converting into fiat. Kraken.com currently offers over 15 altcoins which can immediately be converted into fiat.
The platform was known for its poor website performance and frequent outages in the past, especially during the bullrun of 2017. They have however improved greatly since and in recent history have proven to be very reliable.
Another advantage is that they also use a Fidorbank account, so transfers from your Fidorbank account to the exchange’s usually only take a few minutes and you are ready to buy Bitcoin very quickly.
– Bitstamp.net – Bitstamp.net is an exchange with a great reputation and a very stable platform and trading engine. Bitstamp was born in Slovenia but is now based in London and they follow a strict KYC and AML policy, which I experienced myself first hand. I had to frequently declare where my transfers were coming from and that includes transfers in fiat AND crypto. They seem to follow European regulations very closely. If you regard this as something positive (reliability/respectability) or something negative (privacy/paperwork) is up to you to decide. Their website however works smoothly and SEPA bank wires usually arrive the following day.
2) Verifying your account / KYC.
Trading activity is limited with almost all exchanges until you verified your account. This differs from company to company, but can include the following measuers:
– Verification via bank account (a tiny amount is transferred and you need to confirm its reference).
– Verification of your passport
– Verification of your residence via utility bill
– Verification by Video-Ident
Many exchanges have different levels of verification. The more info you provide, the higher the level of your verification and the higher the amount/volume that you can trade.
3) Purchase of Bitcoin.
While buying Bitcoin (or Altcoins) you basically have two options:
Basically this is the same market principle with every exchange. However, due to the nature of Bitcoin.de there are a few things to keep in mind, especially if both buyer and seller use express trading with a Fidorbank account. I don’t want to spend too much time explaining how each of the exchanges work exactly, because they all have a FAQ where everything is written in further detail.
4) Creating a secure wallet.
This is one of the most important things regarding crypto. Let me first explain what is NOT a secure wallet:
Onlinewallets with any third parties or exchanges.
A wallet is only considered secure, when I (just me, nobody else) have the private key to this wallet.
The private key means everything in crypto. It allows me to be the only beneficiary of all the funds on a wallet. If I don’t have access to the private key of a wallet (for example on an exchange), I don’t own any Bitcoins. Then the owner of the wallet only has the obligation to transfer the funds on my behalf. If he doesn’t or if the exchange suddenly disappears, so do my Bitcoins. Therefore: not your keys, not your coins!
I use BitAddress, to create a secure paperwallet, which I use mostly for storing my Bitcoins. You can also download this page and run it offline on your computer, or you can also use the Wallet-Generator on my website.
5) Transferring your Bitcoin to the secure wallet.
After creating the secure wallet, you can make the withdrawal from the exchange by using the “withdraw” option and send it to your wallet. Make sure to double check the address, as Bitcoins sent to a wrong address can never be recovered.
You can then check your balance and the transactions on your address via a blockexplorer such as Blockchain.info or BTC.com.