With the increasing popularity of cryptocurrency and its potential as an asset which can create wealth, more and more people are turning towards making their first crypto purchase. Out of the digital coins available today, Bitcoin is one of the most sought-after, but the buying process can seem daunting to the inexperienced. In particular, it can be daunting for those who are used to buying traditional stocks or shares.
In this article, we’ll look at how to buy Bitcoin on the popular online trading platform, eToro. We’ll look at the basics of Bitcoin, its advantages and disadvantages, as well as the steps involved in buying Bitcoin via eToro.
What is Bitcoin?
Bitcoin is the first and most prominent type of cryptocurrency, or digital currency. It emerged in 2009 and it is decentralised, meaning it is not issued by any centralised institution or bank. With money that is issued by a centralised institution such as a bank, the bank always holds the power and can manipulate currency values. But Bitcoin is not controlled by any single entity and has no central authority or overseer.
Unlike traditional currencies, Bitcoin is digital and is built on a decentralised ledger known as the blockchain. Rather than using a traditional system of banking and transfers, the blockchain is a distributed and shared ledger that records all Bitcoin transactions.
Advantages of Bitcoin
When it comes to the advantages of Bitcoin and cryptocurrency, there are several to consider.
Lower Transaction Cost
One of the main advantages of cryptocurrency is that it reduces transaction costs and gives users more control over their money. This is because there are no third-party intermediaries involved, such as banks or government.
Secure and Censorship-Resistant
Due to its decentralised nature, Bitcoin is much less susceptible to centralised control and manipulation. This makes it much more restrictive to any form of censorship or interference from governments or banks.
Faster Payments
Another advantage is that Bitcoin payments are generally faster – and often much faster – than traditional bank transfers. This is because there is no need for a third party to verify the transaction, which can take days in the case of traditional banking.
Disadvantages of Bitcoin
Despite its advantages, Bitcoin also has some disadvantages that should be considered.
Volatility
Due to its decentralised nature, Bitcoin can be quite volatile. This means its value can decrease quickly, as well as rise, making it a risky investment.
High Cost of Transactions
Due to its popularity, Bitcoin transaction fees have also been known to be relatively high.
Risky Nature
There is also the risk that a Bitcoin transaction will be irreversibly damaged or lost if a mistake is made when sending the coins, since a bank or other intermediary cannot reverse it.
How to Buy Bitcoin on eToro
Now that you’re familiar with the basics, let’s look at how you can buy Bitcoin on eToro.
Sign Up
The first step is to sign up for an account on eToro. All you need to do is enter your email, a username, and a password. You will then be sent an email and asked to confirm your account.
Verify Your Account
The next step is verifying your account. This is typically done through two-factor authentication, where you’ll be sent an SMS message with a verification code. You’ll also be asked to provide certain documents, such as a scan of your passport or ID.
Fund Your Account
Once your account is verified, you’ll need to fund it with money. eToro offers a wide range of payment options, from credit cards and online payments to wire transfers and cryptocurrencies.
Search for Bitcoin
Once you have funded your account, you can start searching for Bitcoin. You can search for Bitcoin directly, or you can filter by specific criteria.
Buy Bitcoin
Once you’ve found the Bitcoin you’d like to buy, you can click on the “buy” button to purchase it. You’ll then be asked to choose how much you’d like to buy and how you’d like the funds to be allocated.
Buying Bitcoin can be a daunting process for those who are new to cryptocurrency and investing. However, with the help of an online platform such as eToro, the process can be made much easier. This article has looked at how to buy Bitcoin on eToro, as well as the advantages and disadvantages of Bitcoin. Ultimately, you should make sure you conduct thorough research and understand the risks before making any investments.
