How to get started with Bitcoin in 5 steps!

Bitcoin (BTC) is a cryptocurrency that eliminates the need for a third party to be involved in financial transactions by acting as both money and a means of payment independent of any one person, group, or entity. It is available for purchase on numerous platforms and is given to blockchain miners as compensation for their efforts in verifying transactions.

Here are five (5) steps to get your bitcoin stash up and running!

1. Join a crypto exchange

The first thing you need to buy Bitcoin is a platform that gives you access to the currency. A lot of cryptocurrency exchanges are complex and intimidating for new investors, but more user-friendly platforms have come out in recent years to make the process a lot simpler.

Here are a few easy-to-use options

Each exchange offers its own selection of cryptocurrencies, so find one that offers Bitcoin. Because of Bitcoin's popularity, almost every platform does.

Joining an exchange requires a verification process, similar to that of any financial institution. You usually have to provide some form of ID, and the process can take minutes or days, depending on the platform.

2. Get a crypto wallet

A crypto wallet is the software that holds the information about your digital currency. Think of it like your bank account for Bitcoin.

Many exchange platforms include a wallet you can use to store your investments from that platform. You may want to sign up for a third-party wallet for added security and flexibility.

Crypto wallets can be "hot" -- connected to the internet via desktop software, website, or mobile app. Or they can be "cold" -- living on a hard drive not connected to the internet. Cold wallets are more secure because they’re almost immune to malware, but they cost money. Hot wallets are usually free to sign up for and use.

3. Connect your bank account

You can buy Bitcoin with "fiat" currency -- that is, traditional, government-issued money like dollars or euros -- or in exchange for other digital currencies. If you’re buying for the first time, you’ll go with the former.

Depending on the exchange, you can make a purchase via ACH bank transfer, wire transfer, credit card, or debit card. Buying cryptocurrency with a credit card or debit card tends to come with the highest fees, though they might be the most convenient for you.

Regardless of how you buy, you can usually only withdraw Bitcoin from your wallet to a bank account or via wire transfer. So the set up for most exchanges includes connecting your bank account.

Newer apps make this easy by using a platform called Plaid, which securely and seamlessly transfers data among thousands of financial institutions. It’s what you’ve used if you ever connected your bank account to an app like Venmo, for example.

4. Place your order

Once you’re verified and have connected a form of payment, you can place orders on the exchange. In most apps, this works just like any other online broker: You choose which coin you want to purchase (Bitcoin or another currency) and how much you want to spend.

The value of a single Bitcoin fluctuates quickly and has risen steeply since mid-2020. It's currently around $20,000. You can purchase fractions of a coin, though, and many platforms have minimum investments as low as $10.

5. Manage your holdings

Will you be an active trader, a long-term investor, or use Bitcoin as tender?

You can do any or all of these with the Bitcoin you own. The simplest and most common option for novice investors is a long-term investment. Like with any investment, active trading in reaction to market shifts won’t get you far unless you really know what you’re doing (and have a fair amount of luck).

Options to shop with Bitcoin are expanding. You can often find online vendors that accept payment directly in Bitcoin and pay for goods or services by sending money from your wallet to theirs.

A few platforms offer a debit card connected to your Bitcoin balance, which you can use to make purchases with vendors in dollars directly from your crypto wallet.

The ease of buying and managing cryptocurrency has grown tremendously in recent years — faster than its reputation can keep up with. If you get into the market now, you’ll be ahead of the curve as some investors consider Bitcoin the butt of a joke or a dark web tool for the edges of the internet.

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