Banking & budgeting

Banking & budgeting

How to buy Bitcoin in 7 steps

By Abigail Hua

By Abigail Hua

In Budgeting & Banking

Disclaimer: This is an educational tutorial to understand Bitcoin, not investment advice.

In 2013 I set out to buy one whole Bitcoin for £200. But it never actually happened.

The closer I got to buying, the more confused and worried about the whole thing I got. So I gave up.

I wasn't to know, but if I'd persevered, that Bitcoin would now be worth over £6,000.

With the ongoing surge in interest and media coverage, the conversation gets louder and louder, and so much harder to ignore.

Bitcoin could have huge implications for everyone's future. I felt it was time to try again. Not to make money, but to understand what the hell all the fuss was about.

The itch led me down a rabbit hole of research, fueled by fascination and excitement. I finally ‘got it'. It also became obvious that today it's far easier to buy Bitcoin than it was 4 years ago.

Today I'm the proud owner of 0.01603666 BTC, which I exchanged for £100.

In this guide, I take you through the exact steps I followed to buy Bitcoin. The process itself took about 15 minutes.

But before we get to the tutorial steps, it's really important to know what we're getting into. Increasingly I hear from students making mistakes due to rushing into Bitcoin because of all the hype. There's so much fragmented or misleading information out there. My aim here is to strip it to total basics without putting you off for another 4 years (hopefully).

What is Bitcoin?

To many people Bitcoin represents the future of paying for something, as a new digital global ‘cryptocurrency'. Rather than using a £1 coin or $1 bill, something could be 1 Bitcoin (1 BTC).

But Bitcoin is much more than a currency, and this is why people often get confused. It's also the entire network (known as a Blockchain) that securely oversees the entire process of someone sending money to someone else.

Say you spend £20 at a restaurant on a Visa debit card. That transaction must be processed through a card machine, Visa, your bank and the merchant bank. At each step, communication and verification takes place.

Bitcoin's promise is removing all of this friction involved in the verification, whilst also making payments much more secure. You could use your mobile phone to send £20 worth of Bitcoin to the restaurant directly.

Now to make it completely real for you, here's a guy buying an ice-cream with Bitcoin back in 2014:

By cutting out the middlemen, transactions become much cheaper too, especially when it comes to international payments.

Bitcoin also takes on the role of government central banks (eg. The Bank of England). Governments traditionally have control over the supply of currency which is open to manipulation and corruption.

The Bitcoin Blockchain is completely open. It isn't owned or controlled by anyone, it's run by a network of many computers around the world.

Of course the young cryptocurrency is not without its critics. Mainstream media, traditional banks and financial commentators all warn against a ‘bubble' set to burst, and the opportunity for Bitcoin to be used by criminals.

7 steps to buying your first Bitcoin

After some lengthy research, I decided on using Coinbase as a ‘one stop shop’. They set me up with an address, a wallet and the conversion of pounds to Bitcoin itself.

coinbase logo

I also like their intuitive website and mobile app, which allows me to send and receive Bitcoin on the move. The whole process took me less than 15 minutes.

  1. 1. Create a Coinbase account

    Click here for a special promo page inviting you to join.

    Complete the short form and hit “Sign up”.

2. Verify your email

Head to your inbox and click the verification link. It may take a few minutes to arrive (check junk folder if longer).

3. Connect your phone

To secure your account, you’ll now be asked to link up your mobile phone.

This is known as 2-factor authentication and means no one can access your account without knowing your password and holding your phone.

Coinbase will immediately send you an SMS with a code. Enter this in the box, and your account’s created and secured 🙂

4. Verify your identity

You’re now looking at your dashboard, but before being able to buy Bitcoin you need to verify your identity.

Scroll down and click the “Verify your identity” block (bottom left).

coinbase verify

Select an ID type. Now decide how you want to take a photo of it (webcam or mobile).

The live verification check only takes a minute or so.

5. Add a payment method

Back on the dashboard, scroll down and now click “Add a payment method”.

For the purposes of this tutorial, I suggest using a debit or credit card. This allows you to buy Bitcoin instantly, but note there is a small fee.

Bank transfer is an option, but that takes several days to setup. Also when I tried it had to be made in Euros (which for the small amount I bought would have cost me more in bank fees than a card).

Run through the card authentication process and now you’re ready to buy your first Bitcoin.

  1. 6. Buy Bitcoin

    Click “Buy/Sell” in the top menu.

    Ensure “Bitcoin” is selected and your payment method should be pre-loaded.

    Enter in the amount of money (or Bitcoin) you wish to buy. I bought $100 but it could be as little as $10 ($100 is needed for the $10 signup bonus).

    The conversion will be automatically shown. The box on the right shows the full transaction, including the fees.

    Click “Buy Bitcoin Instantly” and the Bitcoin will be added to your wallet immediately. Congrats! 😀

    In my example, I purchased $100 with total Coinbase fees of $3.41. The remaining $96.59 bought me 0.01603666 Bitcoin.

    buy bitcoin

  2. Check your Bitcoin wallet

    Click “Accounts” in the top menu.

    Under “BTC Wallet” you should now see your Bitcoin amount and the transaction.

    This is also where you’re able to send and receive Bitcoin.

Views expressed by authors do not necessarily reflect those of Student Wow Deals. Student Wow Deals accepts no responsibility for any reliance upon the articles contained herein.

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