Beginners Guide 2 / 

 

A Step by Step Guide to Buying Your First Bitcoin. 

Difficulty level: BASIC
Time estimate to complete: 10-15 MIN

Previously we covered Crypto Basics in Beginners Guide 1.

We’ve also looked at the risks and answered some of the most common questions people new to crypto have. It’s probably worthwhile reading this too if you’re just getting started.

Read: Learn How to Stop Worrying and Love the Blockchain.

Recap /

Cryptocurrencies are gaining momentum and wider adoption. We think they have a lot of potential because of this. That being said, there are no guarantees and crypto is extremely volatile. Do your own research. Don’t invest what you cannot afford to lose. Don’t think that you can somehow perfectly time the market or get rich overnight.

Introduction

We’re going to carefully walk through the exact  steps you need to follow in order to get set up and to buy your first Bitcoin. 

There’s no better way to understand how it all works than by just doing it.This Beginners Guide will take most people about 15 minutes to complete.

Today’s Crypto Exchanges make it easy to buy Bitcoin in a few minutes —  it used to be frustrating and way more challenging.

— Mark

I was pretty early to crypto compared to most people I know. Back in the day, it took me over 3 weeks to convince my bank to connect to Coinbase so I could buy Bitcoin. Meanwhile, the price of BTC doubled from $300 to $600 USD and I thought it might be getting overpriced. Hard to predict the future as it turns out.

Today you’ll be going through this same process, but thanks to progress and constant evolution in this space, it will only take you a few minutes.

This is a comprehensive no-nonsense guide. Follow it right to the end and you’ll be set up for a future of buying, sending and selling cryptocurrencies safely and securely.

These are the STEPS:
  1. Designate a specific email address just for crypto (recommended)
  2. Get a Password Manager (highly recommended)
  3. Set up a Cryptocurrency Exchange account 
  4. Send some money from your Bank to fund your new Crypto Exchange account
  5. Trade some of your dollars for Bitcoin (or ETH)

TL;DR

We recommend that you follow these steps in order but if you want the shortcut here it is — just pick a reputable Crypto Exchange, follow their instructions and sign up. They all do a fairly decent job of explaining what you need to do to get on-board.

We like Coinbase and Kraken and if you’re in Canada, we think Newton is the way to go.

Step 1

Designate an Email Address Specifically for Crypto Accounts and Private Transactions

No, you don’t have to do this but instead of having your work and personal financial emails all mixed up together, setting up one email specifically for crypto should make your life easier and more organized. Over time you’ll appreciate being able to see all your history and confirmations in one place.

This is fast and it’s free.

I recommend going to Proton and signing up for the free account. 

Why use Proton instead of Gmail?

Google is kinda creepy let’s be honest. Proton offers email and other encrypted services (similar to Google but without all the creepy tracking). In addition to Email, Proton offers: Drive, Calendar and VPN.

Based in Switzerland and founded in 2014 by a team of scientists who met at CERN. Proton decided to put your privacy first, not big tech, government or advertisers. 

Your data is always private, encrypted and belongs to you.

Learn more about Proton.

Step 2

Manage Your Passwords Securely

 

Let’s just continue to get off to the best possible start here.

You’re getting ready to buy, sell and exchange cryptocurrencies — understanding and using best practices for password management is essential to get right from the very start.

You need to have a lot of different and strong passwords. You’ll need to store them all securely and be able to access them easily.

Forget about using a system where you try to reuse a password that you made up from a few things you can easily remember and then you change the last two characters every few months or so. If any of all that sounds even remotely familiar…  it might be time to take a step forward.

 

A good password looks like a lot like this:

Nthfa*ofTVNhdh-epJBz724jddo2VGPxCJLv6Z9fpURh 

or this:

Cl4sh-ecolog-knockout-italy-coca-gecko-earshot-billow-boxwood-lactch

You think you can remember 44 characters and a mix of randomized letters, numbers and symbols? How about 10 random words?

Not a chance. Nobody is ever going to get it in a million years. This is something only a computer could come up with and recall on demand.

Trying to remember passwords is a recipe for complete disaster. So is trying to transcribe something (like the above) from a notebook into a text field on your iPhone. You’d either need weak passwords which would be terrible, or a good way to manage strong passwords.

Just use a Password Manager.

Think of this as an easy win.

Or even better, think of it as a way of literally protecting your digital assets and securing your online activities. Think beyond crypto here. It should go without saying, but your Password Manager will make signing into your online banking, Amazon, Netflix, Apple, or any other subscription you have on multiple devices so much easier and far more secure.

Your Password Manager will have you memorize a single password or PIN that then unlocks the app and provides you with access to all your passwords and private data.

We review the Best Password Managers (2022) in detail if you want more information on them. 

The recommendation here is to go with any one of them but Bitwarden came out on top after comparing these top three: 1Password, LastPass and BitWarden.

Again, this step is optional but highly recommended — once you set this up you’ll be ready to move on to registering your Crypto Exchange account and buying Bitcoin.

Bitwarden

Here’s why we chose Bitwarden

After doing our research, Bitwarden came out as Our Top Pick.

It has a fully functional free version that beats out the “freemium” offered by LastPass. Its premium version is also much cheaper than LastPass or 1Password.

It’s Open Source and uses Zero-Knowledge security, while also allowing you to store your passwords on your own server.

Step 3

Set up and Register for an Account on a Cryptocurrency Exchange.

 

This is the main reason we’re here — it’s how you’ll buy (and sell) Bitcoin and any other cryptocurrencies.

What is a Crypto Exchange?

Good question. Without going into great detail, your Crypto Exchange account will allow you to buy Bitcoin with fiat by connecting to a payment source (your bank or visa). It’s very similar to a typical online bank or trading account.

This account is custodial (centralized). You deposit your money and crypto onto their platform and they hold it for you.

There are advantages and disadvantages to this arrangement, but the main benefit here is the ability to connect to you bank and transfer fiat. Which you use to pay for crypto.

You can (and should) also use Private Crypto Wallets (like Exodus and MetaMask) and even Decentralized Exchanges (DEXs) for certain things and we’ll get into this later. Just know that these won’t connect you to a payment source and won’t require your identity or phone number as a result. Instead, you’d have to move some crypto onto them from another crypto wallet first before you can trade or use these platforms.

You’ll also need to register for this account legally and to provide proof of your identity. This is part of Know Your Customer (KYC) and Anti-money Laundering laws (AML) and it’s not an option if you want to have full access to all the features of your wallet.

FYI: Crypto is not anonymous, it is pseudonymous.
Most blockchains are public records, so even though your transaction history will be recorded under a random looking number, it will be an immutable publicly visible record nonetheless.

If you want to see the Bitcoin blockchain or look up a specific address, go right ahead. 

For now you’ll need to pick a Crypto Exchange and follow their instructions. They all tend to do a pretty decent job of getting new users onboard

Here’s what you’ll need to have ready:

  1. Email address
  2. Online banking
  3. Official identification (must be 18 years old)
  4. Secure internet connection*

 

Tip: It might be easier to do all this on a mobile device because you can use the camera to take photos and scan documents as well as using it for authenticating (2FA), but it’s up to you. 

Desktop is also fine and you have a bigger screen to work with.

*Using a secure internet connection is just always a good idea. Look for the padlock icon in your browser/address bar. 👀 

 

Here are the exact steps you’ll go through to register for an Exchange Account:

Start

Choose a reputable Exchange

Like Coinbase or Newton

Download and open the mobile app. (Don’t use the browser on your mobile device.)

1.

Create your Account

Sign up using the email address you’re planning to use for crypto.

Set a strong password.

Use our Referral if you want. It’s not going to get you a lot, but it’s free money for you (and for us). 

Money-Mouth Face on Apple iOS 15.4

This is the referral link

If you’ve skipped ahead, it’s not too late to go back and set up a ProtonMail account and a Password Manager.

2.

Validate your Account

Check your inbox to confirm that the email is valid and to verify your account.

Secure your account with 2FA on your mobile device.

3.

Verify your Identity

This involves submitting a photo of your Driver’s License or State Issued iD.

That’s really about it for the account set up.

Nice work.

 

Coinbase

There’s a few reasons why we like Coinbase:

  • It’s one of the largest and most popular exchanges.
  • They’ve been around for a long time, are based in the USA and they have a ton of positive customer reviews.
  • The Coinbase interface is easy to use, intuitive and simple.

Coinbase also offers a Self-custody (private) wallet in addition to their centralized Exchange wallet.

Step 4

Funding Your Exchange Account with USD

 

Now you’ll connect your bank account so that you can transfer money to coinbase the account. You can also use a wire transfer of SWIFT deposit.

Just follow these instructions (Coinbase used as an example): 

Start by verifying your online banking information

  1. Open trading view
  2. On the left-hand column under Wallet Balance, select Deposit
  3. In the Currency Type field, select USD
  4. Select the Bank Account tab> From> Add Account
  5. You will be redirected to Coinbase.com to complete the bank account verification process

 

Deposit funds into your (coinbase) account from your online banking account

  1. Open trading view
  2. On the left-hand column under Wallet Balance, select Deposit
  3. In the Currency Type field, select USD
  4. Select the Bank Account tab. 
  5. From the drop-down menu, select the verified bank account you’d like to deposit from
  6. Enter the USD amount, and then select Deposit USD to confirm 

 

Note: Crypto deposits are unlimited, however fiat deposits are limited by your payment method.

You don’t have to be Elon Musk or Mark Cuban to buy (or sell) Bitcoin.

– Kind of goes without saying

Step 5

Exchange your USD to buy BTC.

This last part is likely to seem straightforward once you’re a bit used to the exchange app. 

Once the funds arrive in your account from the bank (usually in a few minutes) you can use them to buy BTC. Or ETH or ADA or MATIC or any of the other Altcoins or crypto that you see listed there.

A few notes:

The minimum buys are very small for most cryptos.

To qualify for a referral bonus you’ll usually fund your account with $100 or so.

You’ll probably also have maximum limits as well depending on your account level.

Pro accounts have more trading features and lower fees.

Fees to buy/sell are typically just under 1% (on Coinbase). There are even cheaper options but pricing is pretty competitive from one exchange to the next.

If you want to buy an Altcoin (something more obscure that’s not listed on the exchange) you might need to open another account at either KuCoin or Binance where the crypto you want is listed.  

Do your own research.

Do I have to buy a whole Bitcoin? Is there a minimum amount?

No and not really.

Each and every Bitcoin can be divided into one hundred millions, the way a dollar divides into one hundred. The smallest unit of bitcoin that can be recorded on the blockchain (0.00000001 BTC) is called a Sat or Satoshi. Named of course after the anonymous inventor.

Your exchange might have a $5 minimum or something similar but the bottom line is that you can buy or send a tiny amount of BTC.

Newton

Best Crypto Exchange for Canadians

Newton is No.1 in our humble opinion.
It used to be Shakepay and before that it was Coinberry, but Newton our top pick in 2022.

Simple to set up and easy to use with just enough key features and cryptos supported, without overcomplicating things.

Funding via e-transfer is very straightforward.
You can even send the money back to your bank the same way when you want to take (hopefully) some profits.

Use this Referral Link (if you want $25 CAD).*

It can’t hurt to get a few free dollars for something you’re about to do anyways.

*Referees must trade over $100 CAD within 90 days of sign up. During sign up, you will see my name as the referrer.