How to Buy Bitcoin

Bitcoin is bought on exchanges and is then either traded for other cryptocurrencies or stored in a wallet. The exchange you use will mostly depend on where you live. The bulk of cryptocurrency trading happens in North America, UK, China, and Korea. Coinbase is where a lot people start off because of it’s ease of use. From there they may transfer their coins to other exchanges where they can trade different types of cryptocurrencies based on market trends in hopes to make more profit.

Most exchanges will ask you to confirm your identity by uploading a picture of your driver’s license and maybe another photo of yourself to confirm it is actually you. Identity confirmation criteria varies between different exchanges.

Getting Started on Coinbase

We will use Coinbase in our example since it is the exchange used most by beginners. Go to coinbase and follow the steps to sign up. You will need to verify your phone number and identity before you can deposit and withdraw funds from Coinbase. During the signup process coinbase will make two small transactions on your visa of $1.xx and ask you how much the transactions were in order to verify your credit card. If the transactions do not so up right away on your online banking try giving your bank or credit card provider a call. It might be a good idea to give them a call anyway and let them know you’re buying cryptocurrency as some banks will temporarily freeze your card if they have not been notified.

Once you are signed up and verified you can now purchase bitcoin and a few other cryptocurrencies. The process for buying each is the same. We will go through the process of buying bitcoin now.

Buying Bitcoin on Coinbase

Step 1: Log into coinbase and click on “Buy/Sell” in the top navigation

Step 2: From here you can buy or sell a number of cryptocurrencies. Make sure you are on the “Buy” tab and you have Bitcoin selected. Choose your payment method and the amount of bitcoin you wish to buy. Your fees are automatically updated on the right as you enter your purchase amount. Click on “Buy Bitcoin Instantly” to continue.

Step 3: A confirmation page shows up to confirm your purchase. It will show how many bitcoin you are buying, the price it costs, and what your fees are. Click “Confirm Buy”

Your coinbase account will be credited with your bitcoin within a few minutes. It takes a little time for the transaction to take place so don’t worry if it takes a little while. Sometimes the system gets bogged down during busy times.

What is Cryptocurrency?

Cryptocurrency is a form of digital currency that uses cryptography to secure and verify transactions. One of the main benefits of cryptocurrency is that it can be decentralized. Transactions can go from point A to B without a payment service in the middle such as a bank or payment gateway. Another one of the major benefits is that it can be somewhat anonymous, with the only thing being traceable is the wallet address.


Bitcoin was the first one of these cryptocurrencies and the first to hit the mainstream. It was created by Satoshi Nakamoto in 2009. Nobody knows exactly who Satoshi is, or if it was a group or an individual. Since then multiple cryptocurrencies have emerged. Each one has their own name but you will often hear of people referring to it as either Bitcoin or Altcoins. An altcoin is essentially a cryptocurrency other than bitcoin.


Side Note: Although you will most often hear of cryptocurrencies in the context of currency, there are also types of cryptoassets which use the same technology for other uses, such as ownership of items.


Cryptocurrencies use cryptography along with a public ledger that anybody can download and view. This public ledger is stored on what is known as the blockchain. We will explain the blockchain in more detail later, but for now just think of it as a bunch of transactions stored in blocks. As new transactions happen more blocks are added to the blockchain. Before blocks are added to the blockchain they need to be verified. Computers that verify transactions are called miners. You’ll often hear of bitcoin mining. What these people are doing is verifying transactions for a reward.


There have been many attempts to create a digital currency before bitcoin and cryptocurrency came around. One of the major problems they struggled to overcome was the double spending problem. Double spending means spending the same money twice. This problem is solved by having multiple miners verifying a timestamped transaction. As soon as you spend your bitcoin it will show up as a pending transaction on the network. It then needs to be verified by multiple sources before it is confirmed and then added to the blockchain. If someone tries to spend some bitcoin and then tries to spend the bitcoin again before the previous transaction is confirmed then the first transaction is considered the real transaction and the second one is simply rejected by the system