You, Me, and BTC Your Liberty & Bitcoin Podcast
Technically speaking, Bitcoin is one of the most secure forms of currency ever created. So, why do we constantly hear about scandals and hacks where innocent people lose millions of dollars worth of Bitcoin? The real dangers of Bitcoin lurk in the way that companies and individuals buy, sell, and use it rather than in the technology itself.
With the correct knowledge and methods, it is possible to buy large sums of Bitcoin and keep it safe. The Winklevoss twins bought and maintain a billion dollar Bitcoin fortune using proven techniques. The exact methods they use might be a little overkill for the average Bitcoin investor, but the principles are the same. Let's take a look at the safest ways to buy Bitcoin and keep them safe once you have them.
Be Careful with Cryptocurrencies
Bitcoin is one of many cryptocurrencies available these days. They all have different characteristics and applications, but they share one thing in common: They are all almost completely unregulated around the world. This is boasted as one of the key features of cryptocurrency, as it means independence from government and institutional control. But it also has major downsides for buyers and users.
The complete lack of regulation in the cryptocurrency market also means a lack of protection for you as a buyer or seller. When you buy things with a regular credit card, your bank offers you all sorts of protections from fraud and theft. When Bitcoin is involved, you have no such protections. If your Bitcoins are stolen or never delivered, there is nothing you can do about it. They are lost forever, and the thieves will likely never be caught.
Stolen or lost Bitcoins can be hardly traced, so there is little chance of you getting them back, making them a perfect target for hackers and thieves. This compounds the problem and means there are even more traps set for unsuspecting Bitcoin newbies.
The Safest Ways to Buy Bitcoin
There are many ways to get Bitcoin. You can buy them with cash from a local dealer or mine them yourself. By far, the most trusted and widely used method is using a Bitcoin exchange. These are platforms built to make buying and selling Bitcoins fast and easy. You can also buy hundreds of other cryptocurrencies and trade between them.
However, buying them in this way doesn't come without risks. Large Bitcoin exchanges have been hacked in the past with millions of customer money lost. Some hacks were so bad that the entire exchanges had to close their doors and leave customers stranded. Other times, it were the exchanges themselves that took off with customers money. The trick is to choose the right Bitcoin exchange. One with a proven combination of trust, history, and tight security. CEX.IO is one of the exchanges that ticks all these boxes.
CEX.IO Bitcoin exchange
Based in London, CEX.IO is trusted by millions of Bitcoin traders worldwide, including professional investors. It's widely trusted because it meets all of the key criteria for a safe place to buy Bitcoin.
Firstly, it has the history. CEX.IO has a proven track record and has been operating relatively smoothly since 2013 (an eternity in Bitcoin-time). It's a registered FinCEN company and follows all 'Anti Money Laundering' rules and 'Know Your Customer' policies. Traders and users need to be verified, meaning a safer environment for you to trade. This cautious attitude has helped the exchange remain scandal-free. It's also based in London, one of the world's key financial hubs.
These factors have pushed CEX.IO to the top of the Bitcoin ecosystem as a professional-quality Bitcoin exchange. Millions of dollars are traded on the platform every day. There is a quick buy/sell option that makes it easier for beginners to get started and many more advanced trading tools for professional traders. Margin trading is also available on the platform.
What to do with your Bitcoin once you've bought it?
Once you've bought Bitcoin on CEX.IO or another exchange, you'll want to make sure they are safe. It's important to know that when you leave your Bitcoins stored on an exchange, you are trusting them to look after your funds. This will probably be fine most of the time, but your funds are only as secure as the platform itself.
It's a good idea to keep the Bitcoin you aren't planning on using or trading anytime soon in your own secure wallet. There are many options for storing cryptocurrencies, ranging from easy-to-use smartphone wallets to more sophisticated cold-storage options.
How to Avoid Bitcoin Fraud
Even after you've chosen a safe place to buy your Bitcoin, you'll need to know how to stay safe. Attackers have all sorts of techniques to scam you. 'Phishing' is where an attacker pretends to be a trusted Bitcoin exchange to get you to give them Bitcoin or payment information. Some red flags to look out for are:
- Offers to buy Bitcoin under a market value;
- Websites secured using HTTP instead of HTTPS;
- Emails from your Bitcoin exchange that contain hyperlinks or ask for payment.
Always Stay Safe
Irreversible transactions are one of the key features of Bitcoin and cryptocurrencies in general. The ability to transact without a bank or third party is the reason the technology is so impressive. However, without a bank or a third party, you are also without any payment protections. It's essential to choose a safe method to buy and sell your Bitcoins. Bitcoin exchanges like CEX.IO are by far the safest way to get cryptocurrency for the time being. Just remember, buying Bitcoin comes with all sorts of risks, so only invest what you can afford to lose.
