1 Dec

Guide to Buying, Selling & Mining Bitcoins

How to buy, sell, exchange and mine your own Bitcoins.

Learn How to Buy, Sell, Exchange and Mine Your Own Bitcoins OnlineWhen Bitcoin hit its first big spike, everyone wanted a piece of the action. Unfortunately, the process of buying it was so technical, so complicated, most people backed off. Those with programming knowledge made a bundle, and the rest sat by watching it happen. Now days, anyone can easily buy Bitcoin, or one of the countless “altcoins” that came after it. This guide will teach you everything you need to know.

How to Buy, Sell, Exchange & Mine Bitcoins

There are many different ways to acquire cryptocurrency. Some are easier than others. Some are cheaper, or more secure. You can even mine your own Bitcoins for free. Once you have crypto, you can sell it, trade it, or even gamble with it over the internet. The following sections will teach you everything you need to know.

Buying & Selling Crypto on an Exchange

If you know anything about the stock exchange, or ForEx trading, the concept of a Bitcoin exchange should make complete sense to you. Just as you might buy stock in a company from a stock exchange, you can purchase crypto currencies from a digital coin exchange. Coinbase is one of the most popular options, along with Binance Exchange, Cash App, Robinhood and many others.

You can buy and sell cryptocurrencies on an exchange for a small fee. The fees will vary from one app to the next, so be sure you know what you’re getting into. Many times, if you only plan to purchase small amounts, you’ll be paying more in fees than you’re likely to make on any investments.

Purchasing from Private Sellers & Vice Versa

The great thing about buying Bitcoins form a private seller is that you don’t have to pay the fees of an exchange. The bad thing is that you can get ripped off, and if that happens, there’s not a darn thing you can do about it. Such is the dangerous nature of dealing in decentralized currencies. Anonymity is great in some ways, but can turn around and bite you in the butt if you’re not careful.

Suffice it to say, do not buy Bitcoin from a private seller if you don’t know and fully trust the person. Unless the transaction is secured by a smart contract, there’s nothing to guarantee either party will uphold their end of the bargain.

Buy & Sell at Bitcoin ATMs

That’s right – you can purchase Bitcoins directly from an ATM machine. Some Bitcoin ATMs also give you the option to sell crypto, too. Despite the colloquial name, they don’t just deal in Bitcoin, either. Many of these machines also offer Bitcoin Cash (BCH), Ethereum (ETH), Litecoin (LTC) Dogecoin (DOGE), etc.

The number of available Bitcoin ATMs has exploded in the last year. By May 2020, there were more than 7,000 in the world. Six months later, that number had nearly doubled to over 12,500, with about 1,000 of those located across the major cities of Canada.

To buy coins form an ATM, all you’ll need is a payment method and a valid crypto wallet ID. There are about 20 different manufacturers of these machines, so the process can vary from one to the next. Some take cash or card, others accept cards only. Some machines may required identification. Mobile verification is the most common. You would need to enter your mobile phone number, then enter the code received on your phone. The requirements will be listed on the machine, so be sure to read over them before you begin. Then, before you finalize the purchase, you’ll have to approve payment of whatever fee the machine charges.

Selling Bitcoin works essentially the same way, but in reverse. Again, read the instructions on the machine so you understand the process before you get started.

How to Mine Bitcoins

Mining for Bitcoin is essentially the same as being employed. You are doing a task, and getting paid for it in crypto. The “job” of a miner is to maintain the global ledger by adding new transactions to the block. Each transaction added is then broadcast to the network for verification. Bitcoin is awarded to a miner each time they create, or hash, a new block.

According to Investopedia.com:

Miners are getting paid for their work as auditors. They are doing the work of verifying the legitimacy of Bitcoin transactions… Once miners have verified 1 MB (megabyte) worth of bitcoin transactions, known as a “block,” those miners are eligible to be rewarded with a quantity of bitcoin.”

Is it worth it?

The value of a single BTC being what it is today (around US$19k), mining a block can be extremely lucrative. As of May 2020, each block mined is worth 6.25 BTC, which comes out to around US$115,000. But it’s not for everyone. For starters, you need to be really good with math and numbers. Plus, it’s not just a matter of doing the work, but doing it the fastest, since you’ll be competing against an unknown number of other miners to get the job done.

The job of a miner is to work as quickly as possible to solve a complex hashing puzzle. The first miner to do it creates the block, and is rewarded with Bitcoin.

What do I need?

Years ago, anyone with a computer and knowledge of blockchain logging could become a miner. Today, you need more than a desktop or laptop. You need a system that is specifically built for the job – what they call an application-specific integrated circuit, or ASIC miner. Each ASIC miner is built for mining a specific type of crypto (BTC BCH, ETH, LTC, etc), and they can cost several thousand dollars.

Another option – one that doesn’t require any special equipment – is what’s known as Cloud Mining. This version gives you an opportunity to purchase a contract with a crypto provider, such as Bitcoin.com, to update the blockchain ledger ‘on the cloud’ from a standard computer. Contracts are length-based, generally lasting anywhere from 6 months to 2 years, and depending on the contract length and crypto provider, can average anywhere from $50 to $15,000 in cost.

Where do I sign up?

If you want to learn more about how to mine your own Bitcoins, here are some great introductory articles and links to help get you started.

 

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