Bitcoin (BTC) is synonymous with the word cryptocurrency for a good reason. It is the first and most popular digital currency in the world, which has amassed a huge adoption rate since its launch back in 2009.
During its early years, a single Bitcoin was barely worth a couple of USD and it took years for people to build up trust in this new type of financial asset that effectively introduced decentralized, digital cash as a means of facilitating payments, lending money, and storing value.
Trading Bitcoin and exchanging it for fiat money or other cryptos has become one of the most popular daily operations for crypto brokers, traders, crypto enthusiasts, and even corporate investors, with crypto exchange platforms seeing multi-billion USD market caps and trading volumes.
However, people often wonder if they have to buy a full Bitcoin in order to start trading BTC. In this article, we’re going to find out whether this is necessary or not.
Is It Necessary to Buy a Whole Bitcoin?
Let’s answer this question right away. No, you don’t need to buy a full BTC if you want to own some Bitcoin.
Each Bitcoin is divided into 100 million satoshis, which are decimals of a full Bitcoin, and given the price of Bitcoin has stayed at several tens of thousands of USD (or AUD in our case) for a while now, you absolutely don’t have to spend that much money if you want to invest in Bitcoin. What’s more, you can even buy BTC for as little as a couple of AUD.
On top of that, it’s highly recommended to make a small Bitcoin purchase if you’re buying crypto for the first time, just to make sure that your Bitcoin wallet is working well. Imagine the stress you could experience in case you buy, let’s say, 10,000 AUD worth of Bitcoin and something goes wrong with your crypto wallet, so you never get the funds. Of course, there is a very low probability that something like this will happen, but it’s always better to try a low-value Bitcoin transfer first to check whether your wallet is in proper condition, rather than to jeopardize a considerable amount of money.
Where to Buy a Fraction of a Bitcoin?
There are various marketplaces for buying Bitcoin and one of their main difference is in the deposit method. Some of these platforms require fiat deposits, while others let you convert the cryptocurrency stashes you already own into BTC. If you don’t have any digital coins in your crypto wallet yet, you’ll need to invest in some fiat currency like EUR or USD in order to buy Bitcoin.
Below are some of the most popular methods that allow you to buy a portion of a full Bitcoin.
One of the safest and most popular ways to purchase Bitcoin is through cryptocurrency exchange platforms. Buying BTC on exchange platforms is relatively simple and easy after you’ve set up an account.
It’s best to go with a popular crypto exchange that has huge daily traffic and trading volumes. The largest exchange platforms are the most secure ones since they are backed by large support teams and developers that are constantly monitoring the platform, making sure the user data and funds are totally safe. In case of a security breach, the companies immediately look to solve all safety issues, because their reputation and user protection are the main guarantees of their popularity and huge market revenues.
The biggest exchange platforms are the so-called centralized platforms, which means they are controlled by a central company that owns the exchange and is fully responsible for maintaining the platform. Some of the most popular centralized exchanges include Coinbase Pro, Kraken, Binance, and Gemini.
Before you choose an exchange platform, you should read their user policy and get acquainted with all the fees and regulations.
Create an Account and Choose a Payment Method
Once you choose a cryptocurrency exchange platform, you need to create a user account. As explained above, the most popular platforms all have tight security measures to make sure there are no scams or fraudulent behaviour on the platform. For this reason, Bitcoin exchanges require a lot of personal information such as your full name and address and a document that proves your identity, such as your government ID, driver’s license, or your passport.
Don’t worry, all of this personal info is safely kept on the central server of the crypto exchange, under tight security measures, and is only used to confirm your identity. Crypto exchanges don’t use personal information for any other purpose. This is the so-called know-your-customer (KYC) protocol that requires an exchange platform to confirm the identity of their users to avoid any illegal activity.
Once you’re done creating a user account, you need to choose a payment option that would allow you to purchase Bitcoin on the platform. The usual payment methods include bank transfers, credit cards, and debit cards, but some exchanges offer additional options such as prepaid Amazon gift cards or PayPal transfers.
Buy Some BTC
If you’ve already selected an exchange platform, created an account, and connected a payment method, you can start purchasing BTC. As mentioned, you don’t have to spend several tens of thousands of Australian dollars to buy a whole Bitcoin. You can select the desired amount of fiat money you wish to spend on BTC. For instance, you can buy 50 AUD worth of Bitcoin on your first purchase, just to check whether your exchange account and crypto wallet work well together.
All you have to do when selecting Bitcoin is to fill the amount field with the number 50 and select AUD as the fiat currency you wish to spend. You will get a preview of how much satoshis you will receive in exchange for 50 AUD. Once you confirm the purchase, the amount of BTC you bought will be deposited in your exchange account in a matter of minutes.
Keep Your BTC in a Crypto Wallet
When you buy some BTC, it is important to store them in a secure place. Bitcoins, just as other cryptos, don’t exist physically. They exist only on their native blockchain network, so when we say that you need a secure place for storing your BTC, it means that you need a safe cyber location on the blockchain, which only you can access. Bitcoins never leave the blockchain, they only change virtual locations when traded or exchanged.
Cryptocurrency wallets have been invented as a safe means for storing BTC and other cryptos. You can share your unique public or wallet address with other people and exchange platforms in order to receive BTC into your wallet. On the other hand, you mustn’t share your private keys with anyone, because they act as a sort of password that proves your ownership over a certain amount of Bitcoin. If someone gets hold of your private keys, they can jeopardize your funds and send them to their own crypto wallets.
There are two main types of crypto wallets: hot wallets and cold wallets. Hot wallets or hot storage refers to digital wallets that have a constant connection to the internet. These include web wallets that you can access from your browser; desktop wallets that you can install on your PC or laptop; and mobile wallets that you download as an app on your Android or iOS mobile device.
Cold wallets or hardware wallets, on the other hand, aren’t connected to the internet and exist in a physical form similar to USB devices. Some popular hardware wallets with top-notch security are Trezor and Ledger.
All wallet types are secure and it is generally recommended to use a hardware wallet that is connected to a hot wallet in order to keep your private keys as safe as possible at all times.
Classic crypto platforms might be one of the most popular ways to buy the most prominent altcoins such as BTC, Litecoin (LTC), Ripple (XRP), Ethereum (ETH), and Bitcoin Cash (BCH), but there are also other methods that are very reliable such as peer-to-peer exchange platforms.
Some of the most reliable P2P platforms are LocalBitcoins and Paxful. The main difference between standard, centralized exchange platforms and peer-to-peer exchange sites is that the latter directly connect individuals that want to buy or sell Bitcoin and lets them negotiate the terms of their deal.
You can also set a certain price at which you are willing to buy BTC and submit your offer. When an interested seller sees your offer, they will contact you to trade Bitcoin. If you don’t want to wait for a seller to select your offer, you can browse through existing offers and select a seller that suits your needs. These platforms usually don’t require much identification and user data, so if privacy is an important issue for you, then a peer-to-peer broker platform is a great method for buying some BTC.
You can also attempt to do a peer-to-peer trade independently of any platform. This means that you need to find someone who is willing to sell you some BTC and negotiate the terms of the deal such as the fixed coin price and payment method.
If you want to do a peer-to-peer trade, first you need to find a trader. Crypto-related forums and Facebook groups are good places for finding peer-to-peer traders, however, you should be very careful, because there are a lot of scammers that just want to trick people and take their cash.
An easy way to purchase a fraction of a Bitcoin is to find a Bitcoin ATM in your area using sites such as Coin ATM Radar. These ATMs are great for buying small and moderate amounts of BTC because they have their daily payment and withdrawal limits. You just need to find an ATM, select the amount of BTC you want to buy, and deposit enough cash into the machine. You’ll get a receipt and a QR code to scan with your mobile device in order to transfer the bought BTC to your crypto wallet. This process only takes a couple of minutes and it really isn’t complicated at all. Just remember to pay attention to the deposit and transaction fees which can be quite high on BTC ATMs.
What Are the Best Payment Options to Buy Bitcoin?
So, now you know the most popular marketplaces for buying BTC, but what about the available payment options?
Traditional Bank Transaction
Classic bank transactions are a popular means for buying cryptos. You just have to link your bank account with your crypto exchange and directly spend fiat money on Bitcoin. These transactions are very secure because they are conducted between the bank network and your trading platform without any intermediaries, and you can be sure that your money will end up in the right hands.
The main issue with bank transfers is that they sometimes take a lot of time to get processed. This means hours and sometimes even days because cryptocurrencies are still a grey zone for many banks and they want to verify that the transaction isn’t somehow involved in any illegal activities. It isn’t uncommon for a bank to ask for additional information regarding a cryptocurrency transaction, so it is best to consult a bank official on your bank’s transaction policy in advance.
Different payment cards such as credit and debit cards, are a faster option when buying cryptos because you can nearly instantly process the funds and receive your Bitcoin as soon as the BTC blockchain facilitates the transaction (5 to 10 minutes). You just need to make sure you have funds available on your card and add it as a payment option on your chosen trading platform. Once you link your card, you can easily purchase cryptos in a few minutes.
There are also numerous platforms that accept payments from PayPal and Venmo, as well as prepaid Amazon gift cards that are also a useful and quick option for buying BTC.
A Few Ending Words…
As you can see, you don’t need to spend several tens of thousands of AUD to buy a whole Bitcoin. The fact that a single Bitcoin is divided into 100 million satoshis enables people around the world to invest modest sums in the BTC ecosystem and store value in the form of digital currency. Using one of these popular buying methods, paired with one of the listed payment options, you can easily buy a portion of Bitcoin and invest in the asset class of the future.