First Bitcoin Purchase
Congratulations! Your Bitcoin wallet has been successfully installed and is ready to receive your first satoshis, the smallest units of Bitcoin. Now comes an important question: How do you actually obtain Bitcoin?
There are several ways. Some are technically more demanding (such as mining), others depend on an agreement with your employer (for example, if they agree to send part of your salary in bitcoin). However, let us look at the simplest and most commonly used method: buying Bitcoin with fiat currency (for example, euros).
How to do it? There are several options to choose from, and we will go through them step by step.
Buying on an Exchange
The most common way to get Bitcoin is by purchasing it through a cryptocurrency exchange. It is a platform that allows you to exchange traditional money (e.g., euros or dollars) for cryptocurrencies. Exchanges are very user-friendly, often have a clear interface, their own mobile application, and also offer the option to track the value of your portfolio.
The purchase is fast, intuitive, and practically anyone can manage it. Moreover, on an exchange you can not only buy Bitcoin, but also convert it back into euros or dollars, trade it, try to speculate on price fluctuations, or exchange it for various altcoins. Another advantage is that if you lose your login credentials, you can easily recover your account. Exchanges also often provide customer support to help in case of problems.
Examples of well-known platforms include Binance, Coinbase, Kraken, or the Czech exchange office Anycoin. At first glance, it may seem like an ideal solution, but there is one major catch: if you keep your cryptocurrencies on an exchange, you are not their true owner. Your exchange account is merely a claim, a record that a certain amount of bitcoin belongs to you. Technically, however, these bitcoins are stored in the exchange’s wallet under its control.
If something happens to the exchange – if it gets hacked, goes bankrupt, or if the state intervenes and freezes its accounts – your funds are at risk. You become the true owner only when you send the Bitcoin to your own wallet, to which only you have access through your seed. From that moment on, your Bitcoin is truly in your hands. No one else can manipulate it, block it, freeze it, or misuse it. It is the moment when you transition from being an exchange user to becoming a sovereign holder of your digital money.
Another disadvantage of such purchases is KYC. When registering on an exchange, you likely uploaded your ID card, a bank statement, or an invoice. This data may be misused in the future, whether in a hacker attack or handed over to the state upon request. The exchange thus obtains detailed information about when and how much bitcoin you purchased, to which address you sent it, what its current balance is, and what profit you made. In such a case, you lose one of Bitcoin’s key features – anonymity and privacy.
Bitcoin ATM
Another popular way to obtain your first bitcoins is through a so-called Bitcoin ATM. It is a physical device resembling a regular ATM. Unlike a traditional ATM, however, it is not used for withdrawing or depositing euros, but for buying (or sometimes selling) Bitcoin for cash.
Using a Bitcoin ATM is simple and does not require any previous experience with cryptocurrencies. The entire process consists of several basic steps:
- You place your wallet address in the form of a QR code against the reader on the Bitcoin ATM.
- You then insert cash into the machine – for example 20, 50, or 100 euros – and press the button to confirm the transaction.
Within a few seconds, the Bitcoin ATM sends the corresponding amount of satoshis directly to your wallet. The transaction is immediate, simple, and requires no registration.
The biggest advantage is anonymity. Since you pay in cash and do not enter any personal data, the entire process takes place without the need for KYC. You do not need an ID card, phone number, email, or anything similar.
Another advantage is immediate ownership of bitcoin. The purchased satoshis are sent directly to your wallet.
However, this method also has certain disadvantages. One of the main ones is a higher fee. Bitcoin ATMs tend to charge higher fees for completed transactions. In addition, the exchange rate at a Bitcoin ATM is often worse than on exchanges, which means that for your euros you receive slightly fewer satoshis.
Another disadvantage is the need for physical presence. Unlike an exchange, where you can buy bitcoin from the comfort of your home, with a Bitcoin ATM you must go in person to a specific location. This can be a problem, especially if you live in a smaller town or in the countryside.
Most Bitcoin ATMs are located in larger cities, shopping centers, or busy areas. For many people, the nearest Bitcoin ATM may be dozens of kilometers away.
Not all Bitcoin ATMs offer the option to sell bitcoin back for cash. This service is often limited to certain models or operators.