Buy Bitcoin - Instructions, Current Rate & Costs (2023)
Table of contents
Introduction
Buy Bitcoin - Even in 2023, the interest in Bitcoin, Ethereum and other cryptocurrencies is unbroken. But many are faced with the question of how to buy Bitcoin, Ethereum, Ripple or other currencies.
t makes no difference whether you want to buy Bitcoin in the United Kingdom, United States or Ireland - as a digital currency, you buy cryptocurrencies easily and securely online.
And even though it may look very complicated to many - actually buying and selling cryptocurrencies is as easy as buying in an online shop. And if you want to store your Bitcoin, you don't need a bank to do it, you can simply do it at home on a hardware wallet.
Bitcoin and Co. are very young assets. Accordingly, demand and supply are still subject to strong fluctuations, which are rather unsuitable for investors with a low risk appetite.
NOTE - Consider carefully whether you are prepared to accept strong fluctuations and only invest if you are not absolutely dependent on this money at a certain point in time.
If the price were to hit a low point at that moment, it would mean a loss. But if you can sell at a time that you decide, you can make a profit.
If you've decided to buy cryptocurrencies, here's a guide to buying the most popular cryptocurrencies Bitcoin, Ethereum and Ripple and many more.
We'll show you how to acquire these currencies, how to store them permanently on a secure wallet, and how to use a tool like Cointracking to create your tax report for profits from Bitcoin and other cryptocurrencies in just a few clicks.
What is Bitcoin?
Bitcoin is the first and most market-strong decentralised cryptocurrency based on blockchain. Payments are verified independently of central institutions such as banks or governments via a peer-to-peer network by all computers participating in the network.
These transactions are recorded in a public ledger called the blockchain. Records on the blockchain cannot be altered and are therefore more secure than relying on third parties to keep records of transactions.
The inventor of Bitcoin is known by the pseudonym Satoshi Nakamoto.
To understand Bitcoin, we need to understand the underlying technology: the blockchain.
What is a blockchain?
A blockchain is a database that sequentially stores all transactions that have been made on the network. Every time a transaction takes place, the database is expanded. In the process, the data is updated between all the computers in the network.
Where can I buy Bitcoin?
There are several ways to acquire cryptocurrencies.
Purchase from a crypto broker
- Ideal for beginners
- Simple & secure purchase process
- Optimal support through platform
- Price is set and guaranteed by platform at market price
- Medium-high fees (approx. 1.5%)
- Recommendation: Bitpanda
Purchase from a crypto exchange
- For advanced & traders only
- Purchase process with many control options
- Price is determined by supply & demand
- Low fees (approx. 0.15%)
- Recommendation: Binance
Purchase from vending machine
- For beginners & advanced
- Simple purchase process
- Vending machines are available at gas stations & tobacconists
- Hardware wallet required
- Risk of loss of the voucher (!)
- High fees (approx. 4.7 - 6.8%)
- No recommendation
Purchase from other people
- For advanced users
- Price is set between buyer & seller
- Hardware wallet or online account with crypto exchange required
- Transaction-based fees
What is the cost of a Bitcoin?
The current Bitcoin rate & price trend
The price of Bitcoin is very volatile and can be subject to very large fluctuations.
You can find the price for one Bitcoin here:
Bitcoin (BTC) market data
Bitcoin (BTC) Price Development
Bitcoin compared to Altcoins
How to buy Bitcoin? The step by step guide
EnglischTo make the buying process as simple as possible, here is a step-by-step guide to buying Bitcoins on Bitpanda.
To buy any other cryptocurrency, the exact same steps need to be followed.
If you want to follow the process of this bitcoin buying guide right now, you can sign up to Bitpanda here.
Step 1 - Registration
The first step is to create a user account. With a click on Sign-up (top right) this process is started. For the registration you need an email address.
After entering this data you will receive an e-mail with a link for verification.
After clicking this, the new account will be confirmed and created and then you can log in to Bitpanda.
After logging in, you will be shown the dashboard. The dashboard gives you an overview of your user account, your online wallets and the current status of your portfolio of cryptocurrencies, precious metals and shares. The current price for one unit of the respective coins is clearly displayed in the chart overview.
Step 2 - Verification
In order to buy and sell cryptocurrencies, you need to verify your identity. To do so, simply click on the Panda icon in the upper right corner and open the main menu. Then click on Verify Now.
Here you enter your data according to the requested information and click Save and continue.
Step 3 - Two-factor authentication (optional)
To protect your Bitpanda account and the cryptocurrencies on it from unauthorized access, it is recommended to activate the optional 2-factor authentication. You can start the setup in the Panda menu in the upper right corner by clicking on Security and then on the green Setup button.
To do this, you need the Google Authenticator app for your smartphone, with which you scan the QR code displayed. The six-digit 2FA code is now requested for every login.
This completes the authentication process and you can deposit money to your Bitpanda EUR account.
Step 4 - Deposit money into the Bitpanda account
Before you can buy a cryptocurrency, it is necessary to fund the EUR account (fiat wallet) of the Bitpanda account. To deposit funds, click the green Deposit button in the top menu bar.
Fiat Deposit
In the next step you will be asked to select the currency for the deposit. Now select the EUR wallet or another currency of your choice.
Payment methods - bank transfer, credit card or other options
You can choose from the following payment methods:
- Instant bank transfer (1.80% fee)
- SEPA Bank Transfer (free of charge) [now also supports real-time bank transfer].
- Visa credit card (1.80% fee)
- Mastercard credit card (1.80% fee)
- eps-Banküberweisung (0,25 EUR + 2,00 EUR Gebühr [max. 2,00 EUR])
- Giropay (1.50% fee)
- Neteller (0,90% + 3,60 EUR fee)
- Skrill (1,00 EUR + 3,60 EUR fee)
The different payment methods are associated with different fees - while a bank transfer has no cost, but can take longer (2-3 business days), a transfer via Sofortüberweisung costs 1.80% and a deposit via credit card costs 1.80% of the total amount.
After selecting the payment method, you can specify the desired deposit amount.
By clicking on To summary, the transaction will be shown in all details.
By confirming and activating the two buttons, the payment is executed. The credit is now on the EUR WALLET.
Step 5 - Buy Bitcoin
Now click on Prices in the Dashboard, and then select Bitcoin. Here you can see the current Bitcoin rate, your Bitcoin wallet (where your Bitcoins are stored) and the current value of your coins in EUR. Furthermore, you can set a price alarm here - if the set value is exceeded or undershot, you will receive a message.
To start buying bitcoin, click on the green plus Buy-icon.
Alternatively, you can start a purchase from the main menu. Click on Trade.
Now you can select the individual actions. The following options are open to you:
- Buy - With this you buy a cryptocurrency or share
- Sell - With this you sell a cryptocurrency or share
- Swap - Exchange one cryptocurrency for another
- Savings plan - Set up a savings plan with which you regularly pay in a constant amount.
- eps voucher - Here you can redeem a Bitpanda voucher from the Austrian Post (Attention - these are associated with high fees) (0.25 EUR + 2.00 EUR fee [max. 2.00 EUR]).
Now click on Buy.
Now you can choose the cryptocurrency or stock you want to buy.
Now you can choose whether you want to use your entire balance to buy Bitcoin or spend only a part of it. At the bottom you will see how many bitcoins you will get for your purchase amount. Set the amount you want to deposit and click Go to Summary.
Costs & Fees
The summary now displayed will show you all the details of the planned purchase of Bitcoin including the fees. Activate the button and click Buy Now.
The purchase will now be made and you will receive a confirmation.
View Bitcoin Investment
By clicking on Portfolio - Cryptocurrencies - Bitcoin you will see your Bitcoin wallet with your current balance of Bitcoins.
Frequently asked questions
Why buy bitcoin? Advantages & disadvantages
Why buy bitcoin in the first place?
Here you will find an overview of the advantages and disadvantages of investing:
- Simple and technically safe value investment
- strong price fluctuations (for day traders)
- Decentralized processing
- Secure payment option
- Fast payment processing
- Optimal for cross-border transactions (comparatively low transaction costs)
- Available everywhere
- Independent from banks
- Can be stored online or on a wallet (e.g. Ledger Nano S Plus)
- Only a few places to pay with Bitcoin (although more are being added every day)
- Strong price fluctuations (for risk-averse investors)
- Possibly high transaction fees with high network load
- Possible prohibitions through legal regulation (in some countries)
Should I still buy bitcoins now?
This question cannot be answered in general terms, but depends on the respective personal circumstances.
You should clarify the following points BEFORE investing:
- Educate yourself well about the particular cryptocurrency you want to invest in
- Keep up to date with news about your cryptocurrencies
- Choose a secure platform for your purchase (e.g. Bitpanda)
- Store your cryptocurrencies in a hardware wallet (e.g. the Ledger Nano S Plus or Ledger Nano X)
- Can you afford it? Do you still have enough reserves in case you lose the money?
- Bitcoin and cryptocurrencies in general can be subject to high price fluctuations - are you nervously equipped for this stress?
- How can you tax bitcoin (e.g. with Cointracking) [find our Cointracking review here].
Investment Thinking Tip
The Bitcoin price has risen sharply in recent years despite some ups and downs.
Many new investors think that it only makes sense to buy at the lowest prices and sell at the highest prices - so in the case of Bitcoin, you should have invested 10 years ago and now it's too late.
Here, a different line of thinking should be taken: The right question is, by how much percent does my investment increase or decrease in a given period of time?
Because even if the most favorable purchase price for Bitcoin is in the past, a percentage increase of an investment is also interesting.
And this can be very high (but also negative) in the case of cryptocurrencies.
What is my investment strategy?
Long term investment
If you want to use your cryptocurrencies as a long-term investment, here are the advantages & disadvantages:
- You save yourself a lot of stress when observing price fluctuations
- You save transaction fees
- You save on bitcoin tax return preparation
- You sell when it suits you and your life situation and not because the course demands it at the moment.
- Short-term price gains cannot be realized
Daytrading
In daytrading you try to buy at the lowest possible price and sell at the best possible price. This is associated with the following advantages & disadvantages:
- You can realize short-term price gains
- These price gains can be very high, especially for low-valued cryptocurrencies
- You can start with a small budget, reinvest the profits and thus continuously expand your portfolio
- High effort
- You must pay tax on your profits when you sell
- Transaction fees for buying & selling
Note: Even though the chances of quick success are very inviting to daytrade due to the high price fluctuations and the simple buying and selling process of crypto brokers & exchanges, you should really be sure that you want to do it. Day trading can be very stressful and nerve-wracking, as you have to watch the price practically all the time to be able to take profits. Here you should work with professional tools like Bitpanda Pro, which also offer the possibility to trigger automatic buy and sell processes.
Attention - This article is for informational purposes only and is not intended to be a recommendation to trade Bitcoin or any other cryptocurrency.
Does Bitcoin mining still make sense ? (2023)
Bitcoin mining is a process in which miners use special software to solve difficult mathematical problems. By solving these problems, the miner generates a block on the Bockchain. Every time someone generates a block, they are rewarded with Bitcoins.
The more computing power you provide, the more coins you can get as a reward.
Technically, anyone with their own PC can do bitcoin mining - but it's hardly profitable to do anymore.
Mining has become increasingly difficult in recent years, and the energy required to do so, as well as the investment in expensive hardware, has made bitcoin mining inefficient and expensive.
In the so-called halvings, which take place at certain intervals, the generation of a block is only rewarded with half of the Bitcoins. The last halving was in May 2020, so if you previously got 12 Bitcoins for a block, you now only get 6.5 Bitcoins. So it becomes increasingly difficult to be profitable.
It is also important to keep in mind that mining cryptocurrencies might be taxable in your country. You can find more information about this on the page of the Ministry of Finance.
Therefore, it is faster, easier and certainly more profitable to buy Bitcoins from online-brokers.
Can you buy bitcoin anonymously without verification?
You can buy Bitcoin anonymously only with restrictions.
For example, you can buy Bitcoin up to a certain amount (about 250 EUR) without verification at a Bitcoin machine. However, if you exceed this amount or later want to trade on an exchange, verification is necessary.
Currently, an EU-wide regulation is also under consideration, according to which anonymous hardware wallets must be verified in the future if you want to transfer crypto assets from an exchange to or from these wallets.
In fact, one of the purposes of the blockchain is to be able to transparently track all transactions. So if your wallet can be assigned to you at any time, all transactions to this address are also traceable. Even if it appears anonymous at first glance, it is not.
Basically, however, the anonymous purchase of Bitcoin is becoming increasingly difficult and the question arises whether an anonymous purchase will make sense at all in the future.
At the latest if you want to trade anonymously acquired Bitcoins on marketplaces, exchanges or exchanges, a registration and often also verification on the corresponding platforms is usually necessary.
Thus, taxes not paid on profits would also be visible. Since this can cause many problems, you should pay close attention to the correct taxation of your profits. With the crypto tax tool Cointracking you can quickly and easily create a tax report with just a few clicks and you won't run into any problems.
How do I transfer Bitcoins?
You can find detailed instructions on how to transfer Bitcoins on our page Store Bitcoin on the Ledger Nano S Plus.
Where can I buy Bitcoins?
The easiest, fastest, safest and cheapest way to buy Bitcoins is to buy them on an online platform. Alternatively, you can also buy Bitcoin at ATMs, at the Post office or at gas stations and tobacconists.
However, since this is much more complicated and expensive, you should always buy online if possible. How to do that, you will learn in our tutorial.
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