Photo by ethmessages on Unsplash

How to Buy and Secure Bitcoin in 7 Steps

Munich, Germany — January 2022 — There are countless ways to buy and secure Bitcoin. This article offers Bitcoin newbies a step-by-step guide to buying Bitcoin and keeping it safe.

Before you start purchasing Bitcoin, please keep the following in mind:

• This article is not investment advice or a recommendation to buy. I assume that you have already engaged with the topics of Bitcoin and cryptocurrencies and have done your own research. This article is only intended to help you as an interested beginner to better navigate the crypto world.
• An investment in Bitcoin is considered risky by financial advisors, among other things because of the strong and unpredictable price fluctuations that can occur at any time in the short term. Therefore, ideally, only invest an amount of money that you can spare and plan to hold your Bitcoin for at least four years.
• As mentioned in the introduction, there are many different ways to buy Bitcoin, and there will probably be many more in the future. This article is limited to only one possible way, which I think is suitable for Bitcoin beginners. I am not paid for linking to exchanges, YouTube channels, hardware providers, etc.

Considering the disclaimer above, you can now get started. Plan about 4 hours of time (possibly spread over several days) for your first Bitcoin purchase, including securing your digital asset.

How to buy and secure Bitcoin

1. Create an account with Kraken. Kraken is a United States-based cryptocurrency exchange. The exchange provides trading between cryptocurrency and fiat currencies (Dollar, Euro, etc.). Creating an account is as quick and easy as opening a new online bank account.
2. Set up two-factor authentication for your Kraken account using these instructions: Using an authenticator app for two-factor authentication (2FA)
3. After completing the verification of your identity, you can deposit the amount of money you want to invest in Bitcoin into your Kraken account. Alternatively, you can buy cryptocurrencies instantly using another payment method of your choice (credit card, Apple Pay, etc.). The currency “Bitcoin” is abbreviated with “BTC”.
4. Buy a so-called hardware wallet. For a start, the Ledger Nano S from Ledger is good choice (costs about $59 plus shipping). For security reasons, order the hardware wallet directly from the manufacturer and not via third-party retailers such as Amazon or eBay. What a hardware wallet is and what you need it for is well explained in the video Ledger Nano S Complete Setup — Cryptocurrency Hardware Wallet by Crosstalk Solutions.
5. Set up your Ledger Nano S as soon as it is delivered. Use the video in step 4 as a guide.
6. Exchange your dollars/euros/etc. into Bitcoin (“BTC”) on your Kraken account once the deposit is successfully completed. You will usually be notified by email from Kraken. Skip this step if you have chosen another payment method and already hold Bitcoin on your Kraken account.
7. Send your Bitcoin from your Kraken account to your own wallet. How this works and how you create your own wallet is explained in detail in the video in step 4.

Repeat steps 3, 6 and maybe 7 for each additional Bitcoin purchase.

Further remarks

• The 7 steps above provide instructions for a one-time Bitcoin purchase. However, instead of a one-time investment, you could regularly buy smaller amounts of Bitcoin analogous to a DCA (Dollar-Cost Averaging) strategy.
• You need to pay transaction fees for using the Bitcoin network or for transferring your Bitcoins from an exchange to your own wallet. The amount of the fee is variable and depends on the utilization of the Bitcoin network. If the network is very busy, the transaction fees may be disproportionately high (e.g., $60 per transaction). It may make sense for you not to immediately send each purchased Bitcoin share to your own wallet, but instead to wait with the transfer until either a self-defined Bitcoin amount has been reached (e.g. “$1,000” in BTC per savings plan), or until the transaction fees drop again.
• If you are concerned about the high energy consumption of the Bitcoin network, you might be interested in my article 5 Arguments to Convince Your Partner to Invest in Bitcoin Despite Its High Energy Consumption.

Contact

If you have any questions or comments about buying Bitcoin or this article, please feel free to contact me via LinkedIn. I am happy to connect!