To begin, you will need one of the following:
- Cash App (Android & iOS) – The easiest way, for super casual users.
- Coinbase Account (Desktop & Mobile) – The most popular way, with more cryptocurrencies and trading tools.
Want to buy Bitcoin? Bitcoin has gotten a lot of attention in the media lately, and many people are deciding to buy it for the first time.
But if you’ve never bought Bitcoin or any cryptocurrency in the past, the process can seem daunting.
This article will explain exactly how to get Bitcoins.
We’ll go over the simple steps you’ll need to take to install a Bitcoin wallet, choose a cryptocurrency broker, and purchase your first bitcoins.
In addition, we’ll explain how to withdraw your Bitcoin to your wallet so that it can be held securely.
We’ll explain how to do all of these things using simple steps, complete with screenshots that will show you what it will look like. By the time you finish this article, you should feel confident that you can buy Bitcoin without any problems.
How to install a Bitcoin wallet
Before you buy Bitcoin, you’ll need to find a wallet to securely store it in.
We are all accustomed to storing money with an authority, such as in a bank, brokerage account, or prepaid debit account. Sometimes these accounts get hacked, and customers can lose thousands of dollars from identity theft and other types of fraud.
But with Bitcoin, you don’t have to trust an authority. You can hold the private keys to your Bitcoin in your own possession. This prevents you from depending on other people’s security to protect your savings.
It also allows you complete control of your money. As long as your bitcoins are in your wallet, no one can prevent you from spending them.
If you would rather have your brokerage hold your bitcoins and take care of the security for you, skip this section and continue to Choosing a cryptocurrency brokerage below.
Here is how to download and install a Bitcoin wallet. In this example, we use the Electrum wallet, one of the simplest and most popular wallets for Bitcoin users. But these steps are similar regardless of the particular wallet you choose.
To get started, navigate to the official website of Electrum Technologies
Choose your operating system. Electrum is available for Windows, Macintosh (OSX), Android, and Python. If you have a Windows PC, the Windows installer link is the simplest one to use.
Once Electrum is finished installing, run the program. You’ll be asked whether you want to auto connect or select a server manually.
In almost all cases, you should choose auto connect. The only exception would be if for some reason the wallet is not updating your transaction history and balances correctly. But this is a fairly rare occurrence.
On the next screen, Electrum will ask you to name your wallet. You can keep it the default name (default_wallet) or change it to whatever you want.
Click next when you’re finished. Electrum will ask what type of wallet you want to create (standard, two-factor, multi-signature, or import keys).
If this is your first time using Bitcoin, choose standard. If you decide to create a different kind of wallet later, you can always transfer your bitcoins out of this one to the new one.
Click next when you have made your selection. On the next screen, choose create a new seed and click next.
Electrum will ask if you want to create a segwit or legacy seed type. To make sure that your wallet is compatible with the greatest number of exchanges and wallets, choose legacy.
Warning: the following section is very important!
Once you click next, the Electrum software will generate a 256-bit number called a private key. This key will control any bitcoins held in the wallet address.
This key will not be shown to you, but what will be shown is the seed words used to generate the key. As long as you have these seed words in your possession, you will be able to access the bitcoins held in the wallet.
If another person obtains these seed words, he or she will also be able to access your bitcoins. Do not give out your seed words to anyone. Write them down on a piece of paper and store them in a secret place where they cannot be lost.
If you lose your seed words and your device happens to crash, you will lose all of your bitcoins. There is no “forgot my password” feature.
Once you have written down your seed words, Electrum will ask you to type them out in order to verify that you have written them down. Click next once you are finished. You’ll be asked to come up with a password.
The password lock is an added security feature in case of the unlikely event that your personal device is hacked.
Most hackers target brokerage accounts and other places that have large amounts of crypto. But of course, it isn’t impossible for them to go after an individual user. So we recommend creating a password here.
If you forget your password later on, you can recover the wallet using your seed words.
Click next once you are done creating a password. You’ll be brought to the Electrum main menu.
Congratulations. You now have a Bitcoin wallet. This means that you can receive bitcoins from anyone in the world, without needing a bank or any other intermediary standing between you and the sender.
Now all you need is someone to send you bitcoins. This is where a brokerage comes in.
Choosing a cryptocurrency brokerage
If you have a friend who owns bitcoins and is willing to sell them to you, you can pay him cash and instruct him to send the bitcoins to your wallet address. This is the simplest way to buy Bitcoin.
But most of us don’t have friends willing to sell us bitcoins. So for most of us, the only way to acquire them is to buy them from a cryptocurrency brokerage.
There are many different cryptocurrency brokerages you can use. But for this article, we’re going to focus on the two simplest ones for beginners: Square Cash App and Coinbase.
Square Cash App (Android and iOS)
Square Cash App allows you to buy Bitcoin with no fees or commissions. The company makes money off cash transfers. It is willing to sell you commission-free Bitcoin in the hopes that you will use the app for traditional, non-crypto payments.
The only cryptocurrency Cash App offers is Bitcoin. You cannot use it to invest in Litecoin or Bitcoin Cash. And you cannot use it to purchase Ethereum to play digital collectible games.
Cash App also has a $2,500/week transaction limit. If you plan to purchase a large amount of Bitcoin, it may not be the best option for you.
As long as you don’t want other cryptocurrencies and are buying less than $2,500 worth per week, Square Cash App may be the best place for you to buy Bitcoin.
Coinbase (Desktop & Mobile)
Coinbase is one of the largest cryptocurrency brokerages in the world. It has been around since 2012 and has a proven track record of providing excellent security.
In addition to Bitcoin, Coinbase also offers other major cryptocurrencies, including Litecoin, Bitcoin Cash, and Ethereum.
If you are curious about other cryptocurrencies beyond Bitcoin or would like to start using decentralized apps (Dapps), Coinbase may be a better option for you than Cash App.
Coinbase also has a much larger purchase limit than Cash App. You can buy up to $25,000 worth of Bitcoin each day using Coinbase. So if you plan on buying large amounts, Coinbase may be the best option.
Coinbase charges either a flat fee of $0.99-$2.99 or a variable fee of 1.49%-3.99% for each purchase, whichever is greater.
The size of the flat fee is determined by the size of the purchase. If you buy $10 worth of Bitcoin, the flat fee will be $0.99, whereas it will be $2.99 if you buy $200 worth.
The size of the variable fee is determined by what country you live in and whether you pay with a bank transfer or credit card. In most countries, purchasing with a bank transfer will incur a 1.49% fee, whereas a credit card purchase will incur a 3.99% fee.
The biggest drawback to Coinbase is the cost of fees. But for users that want more flexibility, it may still be the best option.
How to buy Bitcoin using Cash App or Coinbase
Once you’ve decided on which crypto brokerage to use, here is the process for setting up an account and using it to buy Bitcoin.
How to buy Bitcoin using Cash App
To set up a Cash App account, first go the Google Play or Apple Store page for Cash App. Then tap install.
Cash App will ask for your phone number. This is used for two-factor authentication – so that a hacker can’t use your password to get into the account unless he has your phone.
Once you’ve entered it and tapped next, you’ll receive a code within a minute or two. Enter this code to continue.
Next, Cash App will ask to connect a bank account. You don’t have to use routing or account numbers. Just put in the debit card number that is connected to your bank account, then tap next.
Enter your full name and tap next. Then enter a $Cashtag. This is a unique username that people will be able to use if they want to send you cash (not crypto).
Tap next. Enter your zip code and tap next again. Invite your friends to get $5 or just skip that part. The Cash App main menu will load.
To buy Bitcoin, first tap the circle in the top-left corner that looks like a person.
Your Bitcoin balance will be displayed. Tap buy.
Enter the amount of Bitcoin you wish to purchase, and tap buy. A confirmation screen will display.
Tap confirm purchase. Within a few seconds, you’ll have Bitcoin in your account.
Because the price is always changing, the amount of BTC you receive may differ by a few pennies from what the confirmation screen showed you. But it should be pretty close.
That’s all there is to buying Bitcoin with the Square Cash App.
If you’re OK with Cash App holding your Bitcoin for you, then no further steps are needed. But if you want to actually take possession of your Bitcoin, read Withdrawing bitcoins to your wallet (below).
How to buy Bitcoin using Coinbase
To create a Coinbase account, navigate to the official Coinbase website. Click Get Started.
Enter your name, email address, and a strong password. Then click next. Check your email for the verification message. Click the link to confirm that you are the owner of that email address.
After passing through several registration pages, you should get to the main menu.
Move your mouse over the Bitcoin area until you see the view asset button. Click this button.
On the right side of the screen is a set of fields you can use to purchase Bitcoin. Put in the amount of Bitcoin you want to buy. Select pay with to bring up a drop-down list of payment methods.
Select add another account.
Enter your bank account or credit card information. When you get back to the purchase screen, select preview purchase.
Click buy now. If you used a credit card, Bitcoin should be available in your account within a few seconds. If you used a bank transfer, the transaction may take a few days.
If you want Coinbase to hold your Bitcoin for you, then no further steps are necessary. But if you want to hold the Bitcoin yourself, read the next section to learn how to withdraw it.
Withdrawing bitcoins to your wallet
Once you’ve installed a wallet and purchased bitcoins from a cryptocurrency brokerage, it’s fairly simple to withdraw your bitcoins from the brokerage and into your personal possession. Here is how to withdraw bitcoins from either Cash App or Coinbase.
In these examples, we use the Electrum Bitcoin wallet. But the steps will be similar regardless of the wallet you use.
How to withdraw bitcoins from Cashapp to Electrum
To withdraw bitcoins from Cash App, first enable deposits and withdrawals.
From the main menu, click the icon in the upper-left that looks like a person.
Scroll down the page and select enable withdrawals and deposits.
You’ll be asked a series of questions to prove your identity. At the end, you’ll be asked to take a picture of your Driver’s License or other ID.
Once you’ve finished verifying your identity, you’ll be brought to a withdrawal screen. Open Electrum on your PC and click the receive tab.
The code in the receiving address field is your Bitcoin address. It is a hash of your public key, which is derived from your private key. Any bitcoins residing at this address will be under your full control – as long as no one else gets your private key.
When you send bitcoins from this address at some point in the future, you’ll broadcast the public key to the Bitcoin network. This will allow the nodes to verify that you are the owner of the bitcoins in this wallet.
However, you will not broadcast the private key, so no one will be able to spend whatever bitcoins are still in the wallet.
Hold your phone’s camera up to the PC screen. Center it on the QR code at the right side of the screen. This will copy your Bitcoin address into Cash App.
Double-check to make sure that the address in Cash App is the same as the address in Electrum. If you make a mistake copying the address, you will lose all of your Bitcoin!
Click send. Within a minute or two, you should see a message in Electrum saying that you have an unconfirmed transaction.
This transaction should be confirmed within the next 5-20 minutes.
That’s all there is to withdrawing Bitcoin from Cash App to a private wallet.
How to withdraw bitcoins from Coinbase to Electrum
To withdraw bitcoins from Coinbase, select accounts from the main menu.
On the left side of the screen, under BTC Wallet, click send.
This will bring up the send BTC dialogue box. In the fields at the bottom, enter either the USD amount of Bitcoin or the number of Bitcoin itself you want to withdraw.
Regardless of which field you use, the other field will automatically update. In other words, if you enter a USD amount, the number of Bitcoins will automatically update based on current prices and vice-versa.
Now load up Electrum. From the main menu, click the receive tab at the top of the screen.
Where it says receiving address, you will see your Bitcoin address. This code is a hash of your public key, which is derived from your private key. The Bitcoin nodes will use this address to determine where to send your Bitcoin.
Once your Bitcoin is located at this address, no one will be able to control it except you, the holder of the private key.
When you send Bitcoins from this wallet at some point in the future, you will send the public key to the nodes. However, you will keep the private key a secret so that no one else can spend your Bitcoin.
Although a public key can be derived from a private key, the reverse transaction is not possible except with quantum computers that currently don’t exist. So as long as you don’t let anyone know your private key, your bitcoins should be safe.
Press the blue clipboard button on the right side of the receiving address field. This will copy the address to your clipboard.
Now switch to your browser and click the recipient field within Coinbase. Right-click and select paste or hit CTRL-V to paste the address.
Double-check to make sure that the address in the recipient field of Coinbase is the same as the receiving address in Electrum. If you put in the wrong address, you will lose your Bitcoin!
When you are finished, click continue. You’ll get a message saying that the Bitcoin has been sent.
Within a minute or two, you should see a message from Electrum saying that there is an unconfirmed transaction.
This transaction should confirm in around 10 minutes on average. It may take more or less time.
Eventually, your transaction will show as confirmed in Electrum.
That’s it. You now have possession of your Bitcoin.
Buying Bitcoin can seem daunting. It’s not obvious how to choose a broker, set up an account, make a purchase, and withdraw Bitcoin. But this article has attempted to explain in simple steps how this can be done.
We hope you found this article to be helpful. If you would like more information about cryptocurrencies and decentralized applications (Dapps), check out more of the articles on this site.
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