What is a virtual world? Definition and classification

How to buy Bitcoin step by step 2022!

The most effective way to find out about bitcoin is to bounce in and get a couple in your "pocket" to discover how they work.

Notwithstanding the publicity about how troublesome and risky it very well may be, getting bitcoins is much simpler and more secure than you could naturally suspect. In a ton of ways, it is most likely more straightforward than opening a record at a conventional bank. Also, considering what has been going on in the financial framework, it is most likely more secure as well.

There are some necessary things to know: you must get and use a software wallet, you must learn how to send and receive money, and most importantly, you must learn how to buy bitcoin from a person or an exchange.

Reminder :

• Bitcoin is valued by its adoption as a store of value and payment system, as well as limited supply and low inflation.
• Although it is impossible to hack Bitcoin itself, it is possible to hack your electronic wallet or exchange account. This is the main reason to take all precautionary measures before storing the currency in your wallet.
• Bitcoin can also be bought through some of the major services such as PayPal and Robinhood.
• One way to indirectly own bitcoin is by investing in companies that have bitcoin on their balance sheets.

Preparation

Before you get started in this field, you will need to get a portfolio. You can do it quite easily by registering on one of the exchanges that will host the wallet for you. And I think you'll want to have one or more exchange wallets in the end, you should initially start with one on your computer to get a better feel of bitcoin because the exchanges are still beta itself. When you reach a certain stage and are familiar with the field, at that hour you can move your money and currencies from exchanges or diversify through exchanges to keep your money safe.

Before You Buy Bitcoin

Privacy and security are important issues for investors in the field of digital currencies, especially bitcoin. So that anyone who obtains the private key of a public website on the Bitcoin blockchain can approve transactions. The private key must be kept secret - scammers may try to take it under the assumption that they know about the enormous property. Know that anyone can see the balance of the overall site you're using. On the other hand, people can transfer this public data by creating different public websites for themselves. This way, they can transfer their Bitcoin reserves across many locations. A proper approach is to keep big guesses in general trends that are not directly related to those that are used in the exchanges.

Anyone can see the background marked by exchanges made on the blockchain - even you. Although exchanges are freely registered on the blockchain, this does not characterize customer data. On the Bitcoin blockchain, only the client's public key appears near the exchange - making the exchanges private but not mysterious. In this sense, bitcoin exchanges are more visible and distinct from cash since each of them is accessible for public visibility, unlike private money exchanges. Anyway, bitcoin exchanges also have an element of secrecy built into their plan. It's really hard to keep track of the performing parties - i.e. the shipper and the recipient of bitcoin - on the digital currency blockchain.

Several international researchers and the FBI have claimed that they can trace transactions made on the Bitcoin blockchain to other users' online accounts, including their digital wallets.

So for example, if someone creates an account on Coinbase, they must provide their identity, and when that person buys bitcoin, it is linked to their name. If they send it to any other wallet, it can still be returned to the Coinbase purchase linked to the original account holder's identity. But overall this should not worry most investors because Bitcoin is legal in the US and most other developed countries.

What is a wallet?

It is a way to store your bitcoins. Specifically, this is the software designed to store bitcoins. It can also run on a desktop computer, laptop, or mobile device and can also be made specifically for storing bitcoins on things like thumb drives. In general, if you are worried about being hacked, this is a good option. Even the Winklevoss twins*, who invested millions in bitcoin, put their investments into hard drives which they then placed in a safe deposit box.

The Winklevoss twins were the first to come up with the idea of ​​creating a social networking site before Facebook. In the same vein, they hired the current CEO of Metaverse "Mark Zuckerberg" who took their idea and became very rich.

How to buy bitcoin?

Overall we have detailed the steps for buying bitcoin below. Remember at the outset that you still need to do your research and decide which option is right for you based on your circumstances.

Step 1: Choose a service or place to trade cryptocurrency

The first step in buying bitcoin is choosing a service or platform for trading cryptocurrency. It includes trading services, places to buy cryptocurrency, cryptocurrency exchanges, payment services, and brokerage. Among all these things, cryptocurrency exchanges are the most convenient option as they offer a wide range of features and more tradable cryptocurrencies.

And when you subscribe to one of the exchanges specialized in trading cryptocurrencies, this will enable you to buy, sell and keep cryptocurrencies. It is generally a best practice to use an exchange that allows its users to withdraw cryptocurrencies to their personal online wallet for safekeeping. Also, for those who are looking to trade Bitcoin or other cryptocurrencies, this feature may not be important.

There are many types of exchanges related to cryptocurrency. Since the spirit of Bitcoin is about decentralization and individual sovereignty, some exchanges allow investors to remain anonymous and do not require users to enter personal information about them. Such exchanges also operate independently and are usually decentralized, which means that they are not monitored and do not have a central point of control.

Although such systems can serve illegal purposes, they can also provide services to the unbanked population of the world. For certain groups of people such as refugees or those who live in countries with fragile infrastructure in terms of government credit or banks - anonymous exchanges can help bring them into the mainstream economy.

Currently, however, most of the popular exchanges are not decentralized and follow laws that require users to provide identification documents. In the US, these include exchanges such as Coinbase, Kraken, Gemini, FTX, and Binance.US, to name a few. These exchanges have grown quite dramatically in the number of features they offer.

The crypto world has grown rapidly in the past decade, with many new tokens vying for investor dollars. Except for Bitcoin and some notable coins, such as Ethereum, not all of these tokens and cryptocurrencies are available on all exchanges. Each exchange has its own set of criteria for determining whether to include or exclude the trading of certain tokens.

In the same vein, Coinbase, Kraken, and Gemini offer bitcoin and a growing number of altcoins. So that these three are probably the easiest on the slopes to crypto in the entire industry. The Binance platform caters to the most advanced trader, as well as offers more serious trading functionality and a better variety of other altcoin options. FTX, a rapidly growing crypto exchange at the moment with a multi-billion dollar valuation, offers a limited number of digital currencies to US investors. However, traders outside the US have a greater choice of tokens on its platform.

An important thing to keep in mind when creating a cryptocurrency exchange account is to use safe internet practices. This includes two-factor authentication and a long, unique password that includes a variety of lowercase letters, uppercase letters, special characters, and numbers for the security of your account.

Step 2: Connect the exchange to the payment option

After you choose the exchange, you will need to collect your personal documents. So depending on the exchange, these photos may include your driver's license or Social Security card, as well as information about your employer and source of funds. The information you may need may also depend on the area and laws in which you live. The process is very similar to setting up a typical brokerage account.

After the exchange verifies your identity, in this case, you will be asked to connect a payment option. On most exchanges, you can link your bank account directly or you can link your credit or debit card. Although you can use a credit card to purchase digital currency, it is never a good idea because the volatility of cryptocurrency prices may inflate the overall cost of purchasing a coin.

Bitcoin is generally legal in the US, but some banks may question or stop deposits on crypto-related sites or exchanges.

So it is a good idea to make sure that your bank may allow you to deposit in your chosen exchange.

There are also varying fees for deposits via a bank account, debit, or credit card. It is important before purchasing any cryptocurrency that you should research the fees associated with each payment option to help choose an exchange or to choose the right payment option for you.

Also, exchanges usually charge a fee for each transaction. This fee can be either a flat fee (if the amount of trade is low) or a percentage depending on the amount. Credit cards are subject to processing fees in addition to transaction fees.

Step 3: Place an order

You can buy any cryptocurrency such as Bitcoin (or another cryptocurrency) after choosing the exchange and linking the payment option. Notably, in recent years, cryptocurrency exchanges have become more popular than they used to be. So that it has grown significantly in terms of liquidity and breadth of its features. Parallel with all these changes witnessed by cryptocurrency exchanges, it is noticed that the stereotype that was before about the field of cryptocurrency changed. Previously portrayed as a scam or an industry with questionable practices, it is slowly turning into a legitimate industry that has attracted the interest of all major investors in the financial services industry.

Currently, cryptocurrency exchanges have reached a point where they are comparable to their counterparts in a traditional brokerage. Cryptocurrency exchanges today offer several new order types and investment methods. Almost all cryptocurrency exchanges offer both market orders and limit orders, and some also offer stop-loss orders. Among the above-mentioned and most popular exchanges in the world, Kraken offers most types of orders. So Kraken allows for market orders, limit, stop loss, stop limit, take profit and take profit.

Aside from a variety of order types, in the same vein, the exchanges also offer ways to prepare recurring investments, which helps clients average the dollar cost of their investment of choice. Coinbase, for example, allows users to set recurring purchases for each day, week, or month.

Step 4: Safe storage

Cryptocurrency wallets in general, and Bitcoin in particular, are one of the safest ways to store your digital assets. Having your crypto off-exchange and in your personal wallet allows only you to control the private key of your funds. It also gives you the ability to store funds away from the exchange and avoid any future risks to the exchange such as hacking and thus will make you lose your money.

And while most exchanges offer private wallets to their users, security is not their primary business. So we recommend you to use the exchange wallet for large or long-term cryptocurrency holdings.

And for the record, some wallets contain more features than others. Some are just Bitcoin, and some offer you the ability to store several, many different types of altcoins. Some wallets also provide the ability to exchange one token for another.

Generally, when it comes to choosing a Bitcoin wallet, you have several important options. The first thing to understand about crypto wallets is that there are two types of wallets, there are hot wallets (internet wallets) and cold wallets (paper or hardware wallets).

• Hot wallets

Online wallets are also known as hot wallets. Hot wallets are all about wallets that run on internet-connected devices such as computers, phones, or tablets. This can lead to a security vulnerability because these wallets generate the private keys for your cryptocurrency on these internet-connected devices. And while a hot wallet can often be very safe and convenient because it enables you to quickly access your assets and make transactions on them, storing your private key in them makes them more vulnerable to hacking.

Often this seems far-fetched, but holders of hot wallets who have not set up sufficient security should keep in mind that they risk losing money due to theft. This is not a rare event, as it can happen in many different ways. For example, bragging on a public forum like Reddit about how much bitcoin you own while using little or no security and storing it in a hot wallet would be unwise. However, these wallets can also be secured as long as necessary precautions are taken. You should set strong passwords, two-factor authentication, secure internet browsing, and the minimum requirements needed to protect your wallet.

Generally, these wallets are best for the small amounts of cryptocurrencies or cryptocurrencies that you actively trade on the exchange. You can also liken a hot wallet to a checking account. As conventional financial wisdom might say, keep spending money only in a checking account and the rest and the bulk of your money in savings or other investment accounts. The same can be said for hot wallets. Hot wallets include mobile wallets, desktop wallets, web wallets, and exchange accounts.

As we said earlier, exchange portfolios are custody accounts offered by the exchange. The user of this type of wallet is not the owner of the private key of the cryptocurrency contained in this wallet. If there is an exchange hack or your account is hacked, you will lose your money. A common phrase, "Not your key, not your currency," is frequent in cryptocurrency forums and communities.

• Cold wallets

Cold wallets are considered offline wallets and therefore have the least degree of risk. These wallets are also called offline wallets or hardware wallets. This is because it stores the user's private key on something that is offline and can come with software that runs in parallel so that the user can view their wallet without compromising their private key.

Often the safest way to store cryptocurrency offline is via a paper wallet. A paper wallet, it is a wallet that you can create from specialized websites. This results in the public and private keys that you type on a piece of paper. The cryptocurrency at these addresses can only be accessed with that piece of paper with its private key. Many people pack these paper wallets and store them in safe deposit boxes in their banks or even in a safe in their homes. These portfolios are intended for long-term, high-security investments. You cannot sell or trade bitcoins stored in this way quickly.

The most common type of cold wallet is the hardware wallet. A hardware wallet is usually a USB drive device that securely stores a user's private keys offline. These wallets have great advantages over hot wallets because they are not affected by viruses that can infect your computer. With hardware wallets, private keys cannot come into contact with a networked computer or potentially vulnerable software. These devices are usually open-source, allowing the community to determine their safety through code audits rather than the company declaring them safe to use

In general, cold wallets are the most secure way to store bitcoins or any other cryptocurrency. A good way to set up your wallets is to have three things: an exchange account to buy and sell, a hot wallet to hold small to medium amounts of cryptocurrency you want to trade or sell, and a great hardware wallet to store larger items for. long periods.

How to buy bitcoin with PayPal

Also, you can buy bitcoin through the payment processor PayPal Holdings, Inc. (PYPL). So there are two ways to buy bitcoin with PayPal. The first and most seamless way is to buy cryptocurrency using your PayPal account connected to a payment mechanism, such as a debit card or bank account. The second option is to use your PayPal account balance to purchase cryptocurrency through a third-party provider. Often this option is not as convenient as the first because only very few third-party sites allow users to buy bitcoins using the PayPal button.

Four cryptocurrencies - Bitcoin, Ethereum, Litecoin, and Bitcoin Cash - can also be purchased directly through PayPal. Except for people who live in Hawaii, residents of all USA can either use existing PayPal accounts or create new ones. You can also use your cryptocurrency to purchase certain products and services through the Checkout With Crypto feature.

To set up a crypto account with PayPal, you must provide some of the following information: name, physical address, date of birth, and tax identification number.

A credit card cannot be used to purchase Bitcoin using PayPal. During the purchase process, PayPal will display the price of the cryptocurrency. But this price is mostly subject to rapid change due to the volatility of the cryptocurrency markets. And before buying you should make sure that you have more than the price you set in the budget for the purchase in your bank account.

And when you buy bitcoin directly from PayPal, they earn money through the spread of the cryptocurrency or the difference between the market price of bitcoin and the exchange rate with the US dollar. The company also charges a transaction fee for each purchase. This fee depends on the dollar amount of the purchase. For example, to be clear a flat fee of $0.50 is charged on purchases between $100 and $200. Next, the fee is calculated by a percentage of the total dollar amount. For example, a fee of 2% of the total amount as a whole is charged on cryptocurrency purchases between $100 and $200.12

One of the biggest drawbacks of buying cryptocurrency through PayPal is that you cannot transfer cryptocurrency outside of the payment processor platform. Therefore, most of the time you cannot transfer the purchased bitcoin from your PayPal wallet to an external crypto wallet or your personal wallet.

Another drawback to using PayPal is that very few online exchanges and platforms allow PayPal to be used to purchase cryptocurrencies. Overall, eToro is among the few platforms that allow online traders to use PayPal to buy bitcoin on its platform.

How to buy bitcoin with a credit card

The process of buying bitcoin with a credit card is often similar to purchasing with a debit card through Automated Clearinghouse (ACH) transfers. You must also enter your credit card details with the trading company or online exchange company and authorize the transaction. Overall, it is frankly not a good idea to buy bitcoin with credit cards. For several reasons.

First, all exchanges do not allow the purchase of bitcoin with credit cards because of the associated processing fees and risk of fraud. It may also act in the best interest of the clients. This is because credit card processing can incur additional fees for such transactions. In addition, when you pay the transaction fee, you will end up with a processing fee that the exchange may charge you.

The second reason is that buying credit cards is often expensive. Credit card issuers treat Bitcoin purchases as cash advances as they charge huge fees and interest rates on these advances. For example, both American Express and Chase count cryptocurrency purchases as cash advance transactions. So for example, if you buy $200 worth of bitcoin with an American Express card, you'll pay $20 (the current cash advance fee for such transactions) and additionally, the annual fee is 25%. Furthermore, the credit card company sets a certain limit on $1,000 worth of bitcoin purchases per month.

An indirect way to buy bitcoin with a credit card is by getting a bitcoin rewards credit card. These cards work much like your typical rewards credit card except that they offer rewards in the form of bitcoin. Therefore, they invest the cashback earned on purchases in Bitcoin. A notable example of a Bitcoin rewards card is the BlockFi Bitcoin Rewards credit card.15 However, be aware that annual fees for these cards are often expensive and there may be additional costs associated with converting fiat currencies to crypto.