Against a considerable torrent of criticism, bitcoin surged to become one of the most talked-about investments in the world. Seemingly no one can get enough about the blockchain technology that underlines the cryptocurrencies. Having witnessed its mercurial profitability, people want to learn how to buy bitcoin. But before I get to that, I first want to answer the why.
The past year has been nothing short of explosive for bitcoin, and I mean that in a bad way. After briefly touching the $5,000 mark in September, the famed cryptocurrency collapsed, eventually dropping below $3,000 before climbing its way back up. In November, BTC hit about $7500 and reversed sharply down to $6500. Now it’s trading near $8,200. Traditional investors aren’t used to such violent see-saw behaviors in their portfolio. Then again, traditional investments don’t typically make 750% profits in a single year.
Ignoring the longer-term profitability potential, prominent folks like JPMorgan CEO Jamie Dimon blasted bitcoin as essentially a Ponzi scheme. The mistake that Dimon makes is conflating volatility with a market collapse. More critically, he refuses to acknowledge the key similarity that connects all bubble implosions in financial history.
Whether we’re talking about Dimon’s tulip mania example, the 2000 tech bubble, the 2006-2007 subprime housing crisis or the 2008 global financial collapse, their respective theses were proven materially false.
A rare commodity was no longer rare. Authorities exposed companies with fake financials. A roaring wave of bad debt proved housing prices were unsustainable. Bubbles pop because the investment justification ceases to exist.
But bitcoin is more than just a speculatively-driven vehicle. Its blockchain technology has profound implications for multiple industries. Primarily, it can (and will) revolutionize finance and global transactions. To say that bitcoin’s thesis is invalid is to woefully dismiss digitalization trends, such as the Internet of Things.
Having addressed the “why,” let’s now turn to how to buy bitcoin.
The Easiest Way to Buy Bitcoin
Coinbase is the most popular, and in my opinion, the easiest way to ride the blockchain revolution. Not only can you use multiple payment methods, you can also purchase alternative cryptocurrencies Ethereum and Litecoin. Anytime I come across the how to buy bitcoin question, I always point to Coinbase.
Unfortunately, this digital-coin exchange company has a de-facto monopoly on the “normal” process of acquiring cryptocurrencies. As a result, you want to be aware of certain conditions and requirements before diving in.
First, because of Coinbase’s updated security protocols, signing up is more convoluted than when I first joined the exchange. In order to fully sign in and have access to the platform’s buying and selling features, you will need the following: smartphone, government-issued ID, and patience.
Your smartphone will act as a necessary component in the exchange’s two-factor authentication (2FA) process. Some people may run into problems uploading their ID. If this occurs, make sure you’ve downloaded the latest version of your internet browser. If that doesn’t resolve the issue, try different browsers, or even different platforms.
The second major complaint with Coinbase is its poor customer service. By poor, I mean non-existent. The company initially attempts to resolve your “how to buy bitcoin” inquiries through their FAQ section. Failing that, you can try their customer-service bot, which is more artificial than intelligent. If you truly, desperately need human help, call a friend who knows computers. Seriously.
You have a better probability of finding competence at the U.S. Postal Service than getting a hold of an actual Coinbase rep.
Opening Up a World of Possibilities
I don’t want to scare anybody. Once you get over the initiation hump, Coinbase’s user convenience is absolutely incredible. It may very well change the way you approach financial markets in general.
Currently, the digital-asset exchange accepts payment platforms from Paypal Holdings Inc (NASDAQ:PYPL), Mastercard Inc (NYSE:MA) and Visa Inc (NYSE:V). In addition, you can link-up your Coinbase account to your bank or credit union.
Buying cryptocurrencies is remarkably easy. Simply click on the “Buy/Sell” section, choose your payment method, and enter what and how many digital coins you wish to purchase.
Depending on the payment method and the dollar value of your purchase, your transaction fees range from 1% to 5%. Higher-value transactions feature lower fees, as do bank payments. However, the latter method results in a near-week long “acquisition lag,” whereas buying bitcoin through a credit card is instantaneous.
After you’ve learned how to buy bitcoin, the next question turns to when to buy. If you want to acquire cryptocurrencies at two in the morning, it’s entirely your prerogative. In fact, you’ll notice tremendous trading dynamics occur in the wee hours when the Asian markets are just getting started.
It’s at this point you’ll realize that you’re not dealing with the incredibly restricted platform of the New York Stock Exchange. No scheduled time limits exist, nor do plunge-protection teams to give emotional markets a cooling-off period. Bitcoin and the blockchain represent complete and utter freedom, with all its good, bad, and ugly!
Josh Enomoto is long all the cryptocurrencies mentioned in this article.