Module #3 - Making your first investment
Lesson 4 - Buying Your First Bitcoin
We are finally here, we are ready to buy your first Crypto, and we are going to buy some Bitcoin. Excited?
Well anyway, I find this exciting because I love Crypto Assets and it is always great when someone new joins the ecosystem. You can ignore me and buy a different coin, but I think it is important to buy Bitcoin first and always have a little in your portfolio, why?
- Bitcoin is the flagship Crypto Assets and is the reasons all others exist
- It is the base layer currency for all of Crypto
- You will likely need to use Bitcoin to buy other Crypto later down the line
So let's get started.
Step 1: Go to the Buy/Sell Screen
To start with you need to go to the Buy/Sell screen, this is where we will be buying your first Bitcoin from.
Please follow these steps:
- Ensure that the Buy tab is the one selected at the top.
- You will also notice four buying options: Bitcoin, Bitcoin Cash, Ethereum and Litecoin. Make sure Bitcoin is selected, it will have a green border and green tick if it is.
- Select your Payment Method, all those which you have added should show, as my bank account is not yet approved, my only option is the debit card I added so this is what I have selected.
Step 2: Choose an Amount to Buy
Now you need to select an amount to buy:
- Enter an Amount but note here that Coinbase has limits. We'll cover limits and how to raise them later, but my limit is £50 per week on this card at the moment. Do not worry about limits right now; we just want you to buy some Bitcoin.
- Once you have entered an amount, you will notice that this is converted into an amount of Bitcoin, on mine you will see that this is 0.00982646. Equally, you could have selected an amount of Bitcoin to purchase, and it would have told you to have much this would have cost in your local currency.
- To the right you will notice a summary box, which includes:
- How much Bitcoin you are buying, rounded to four decimal places
- The payment method you are using
- Where it will be deposited to
- A cost summary including a Coinbase fee
- When you are ready to buy, click on the button for Buy Bitcoin Instantly
Step 3: Authorise Your Transaction
Before your order is confirmed, you will need to authorise your transaction. This screen is a confirmation of the order with options to Confirm Buy and Cancel Transaction.
If you are happy to make the purchase, then click on Confirm Buy.
Note: my first attempt at buying failed, and I received a text from my bank asking for to confirm whether this purchase is legitimate. I confirmed, and the transaction went through on the second attempt. This may happen to you too, depending on who you bank with and the fraud prevention alerts they have in place.
Step 4: Confirmation
You are now the proud owner of your first Bitcoin. Pretty cool huh? Okay, we are not done yet, let's go to your Coinbase wallet and take a look at your Bitcoin.
Step 5: Checking Your Bitcoin Wallet
So that we can confirm your Bitcoin balance and for your first exposure to a wallet, please go to the Accounts page on Coinbase.
You will notice on this page that there four different wallets listed down the left-hand side, each showing their balance:
- BTC Wallet: Bitcoin
- BCH Wallet: Bitcoin Cash
- ETH Wallet: Ethereum
- LTC Wallet: Litecoin
So all these are different types of Crypto Asset, we'll discuss them all later. Just for now I want to show you a couple of things.
- You will notice that your Bitcoin Wallet is called BTC Wallet, the BTC part is what is known as a ticker. A ticker is used to identify a Crypto Assets on exchanges; you will though hear people referring to Bitcoin as BTC, don't worry too much about this, it is the same thing, like a nickname.
- You will also notice something called Bitcoin Cash; this might get a little complicated. For now, Bitcoin Cash is just another Cryptocurrency with a name similar to Bitcoin. It was created by forking Bitcoin, something I will cover later. It is a different coin, so please make sure you never send Bitcoin to a Bitcoin Cash wallet or vice versa as you could lose your money.
By default, your Bitcoin wallet should be the one selected; you will notice the following:
- How much Bitcoin is in the wallet, mine shows as 0.0098 BTC which is the amount I purchased but has been rounded to 4 decimal places
- The value in £ based on the exchange rate, notice this is less than the £50 I spent, this is because the £50 included a fee from Coinbase. This number will also change as the price of Bitcoin goes up and down
- A list of transactions, currently only showing the Bitcoin I just bought. Over time, this list will grow as you buy, sell or transfer Bitcoin in and out of this wallet
Module #3: Lesson 2 Summary
- When you first buy Bitcoin there is a limit to how much you can buy with your card: this is to prevent fraud but limits are raised as you buy more
- You can buy a fraction of a Bitcoin: Crypto Assets are divisible to decimal amounts, for example, Bitcoin has 8 decimal places
- Once you have made a purchase it is added to your wallet: you can see this in the accounts section
Now you have purchased your first Bitcoin, you can move onto Module #3: Lesson 5 and discover some of the other important features on Coinbase.