Bitcoin is a scarce resource like gold. A total of only 21 million bitcoins can be mined. Hence the price of one single Bitcoin is as high as $19,237, which when converted to rupees amounts to a whopping Rs. 15,19,290.
Most people cannot afford to buy one single bitcoin by themselves. Also, most people would not invest so much in a single instrument. They would more likely choose to diversify a smaller amount in crypto as they are just getting started.
Hence, when most people intend to buy Bitcoin, they intend on buying a fraction of a Bitcoin.
Steps for buying bitcoin
Choose a bitcoin exchange
Various online platforms provide a space for the purchase and selling of bitcoins. Some popular names are WazirX, ZebPay, CEX.IO, Binance, and Coinbase. Select a bitcoin exchange of your choice.
Open an account
You must open an account on such an exchange. All you need to do is fill in your details, along with your Aadhar Card and PAN Card. Other than that, you might have to click a selfie for photo verification on some apps. A Gmail verification is also asked in most exchanges like WazirX and Gemini.
The more information you provide, the more ease and access you have towards buying and selling bitcoin. In case you have not provided all the required information while signing up, you can have restricted access to the amount of Bitcoin you can purchase and sell. This is done to ensure the prevention of money-laundering activities.
Choose a payment option
Now that you have opened an account on a crypto exchange. There is one last thing that you need to do before you get started with purchasing bitcoin. You need to fund your exchange account. This can be done through various sources like debit cards, credit cards, UPI, digital wallets like Mobi Kwik, or a direct transfer from your bank account. Sources like Debit Card and Credit Card charge a huge percentage for service charges. Hence, the best route is a direct bank transfer.
After you have funded your account, you are all set for purchasing. On the exchange, choose your national currency (Rs. /$) and type the amount you would want to invest in bitcoin. The exchange itself will show what fraction of bitcoin you would own if you invested that amount. As you click the purchase option, your bitcoin will be transferred to your exchange account balance.
Safe storage for bitcoin
There are two routes that one can take to store their bitcoin. They are popularly known as the hot route and the cold route.
In the cold route, you would require a device called a nano ledger that looks like a pen drive. Here, you are withdrawing your bitcoins off the exchange. You can say that this is an offline way of storing bitcoins and is the safest method.
The hot route means keeping your bitcoins online.
There are also two ways to go about this.
Either A) you can simply keep bitcoins on the exchange or B) you can transfer them to another interest-earning app.
E.g., Gemini (stock exchange) and Blockfi (interest-earning app) work in this manner. You can transfer your bitcoins from Gemini to Blockfi using a unique address link that is given by Blockfi. Make sure you complete this process with utmost care and attention so that you transfer bitcoins from Gemini to your account on Blockfi (an interest-earning app).
In both these processes, you have to trust these online platforms and believe that they are taking good decisions for their customers. And that is how you can safely purchase and store bitcoins.