Once you know what you are doing, if you want to buy significant sums of bitcoin, the place to do that is on an exchange. There are all sorts of identity checks you have to go through to open an account with an exchange. The process can be rather frustrating. If you’re struggling, one point I’d make is that in many cases I found it easier doing this on my phone than on my computer.
Even more frustrating is trying to send large sums. Banks sometimes limit the amount you can send. Some exchanges require extra verification, which can take considerable time to process, particularly at the moment with so many platforms swamped with new accounts opening.
(There is a global rush to buy bitcoin – it always happens in bull markets – and the general public is in a speculative frenzy anyway as a result of being locked down and having little else to do – see Gamestop for more details).
Where to keep your bitcoins
Bitcoins might be a digital asset (so you can’t touch them). But they’re also a bearer asset (if you hold them, you own them). So you need to keep them somewhere safe.
You can keep your bitcoins at an exchange – some offer cold storage, which is similar to the way that bullion dealers often offer gold storage. And if you feel you don’t have the time or the ability to learn and apply your own sovereign cold storage systems, then storing your bitcoins in cold storage with one of the more reputable exchanges in one of the more reputable jurisdictions, is a solution.
Exchange security is infinitely superior to what it once was. However, just understand that if the exchange goes bust, is hacked or has its assets frozen, you could well have a problem on your hands. The same government protections that exist in traditional finance do not exist in bitcoin. It is a form of digital cash. Replacement certificates cannot be issued, nor the stolen certificates cancelled. Once it is gone, it is gone. (And unlike your gold, it is unlikely to be insured).
The purists and the old hands all recommend taking custody, and so do I. Be your own sovereign bank, as the saying goes.
The most user-friendly means to store your own bitcoins I found to be keys.casa. Other long-term storage options include Trezor, Ledger, Electrum plus a multisig (multi-signature) hardware wallet. These will all start making sense once you start playing around with the technology. The ultimate guide to bitcoin security can be found here.
Cautionary tales from people who bought bitcoin early and still missed out
Back in 2014 I had my email hacked. The hacker found an archived wallet in my gmail account, which he used to steal my bitcoin. It was a common hack at the time and many of us lost our coins.
Today what was stolen amounts to a seven-figure sum. So angry/stupid was I afterwards that I did not buy back what was stolen and went on to miss out on huge gains. There are many people like me who suffered a similar, or in some cases much worse fate.
Imagine if you were one of the early…