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How to buy bitcoin: A beginner's guide to purchasing cryptocurrency and not being scammed

The Independent logo The Independent 5 days ago Aatif Sulleyman

a close up of a piece of paper © Provided by Independent Print Limited The value of bitcoin has hit a new record high of $11,850 (Editor's note: now past $15,000 as of 1pm 7/12/17), and mainstream interest in the cryptocurrency has skyrocketed.

The notoriously volatile currency is expected to fluctuate wildly, and numerous financial experts are advising people to avoid getting involved with bitcoin, believing that the boom can only end badly.

Related: With talk of Bitcoin hitting $50,000, money saving expert Martin Lewis reveals whether you should invest in it

However, if you’re really curious and either want to dip your toe in the water or simply find out more, here’s how you can buy bitcoin.

The easiest way to get involved is by signing up to a bitcoin wallet service. You can also "mine" bitcoin using a supercomputer – an unrealistic option for most people – or set up and control your own wallet, but using a third-party service is far simpler.

Some of the most popular options are Coinbase, Blockchain.info and Xapo, which you can use on both desktop and mobile.

Here's how you buy and sell Bitcoin (Business Insider)

<p>Bitcoin <a href="http://www.businessinsider.com/bitcoin-price-hits-record-above-5800-2017-10?utm_source=msn.com&amp;utm_medium=referral&amp;utm_content=msn-slideshow&amp;utm_campaign=bodyurl"> hit a record high</a> of $5,866 on Friday, October 13, after a dismal September in which the cryptocurrency fell to $2,900 a coin on September 15.</p><p> Two years ago, the idea of buying the virtual currency even at that price was laughable. After a <a href="http://www.nytimes.com/2017/01/03/business/dealbook/bitcoin-price-soars-fueled-by-speculation-and-global-currency-turmoil.html?rref=collection%2Fbyline%2Fnathaniel-popper&amp;action=click&amp;contentCollection=undefined&amp;region=stream&amp;module=stream_unit&amp;version=latest&amp;contentPlacement=1&amp;pgtype=collection&amp;_r=0"> rapid rise in value</a> in 2013, the cryptocurrency's value more than halved by mid-2015.</p><p> At its lowest point, one bitcoin was equal to about $230.</p><p> Given the currency's covert nature, the average person still may not understand how buying and selling actually works.</p><p> Using the app <a href="https://www.coinbase.com/">Coinbase</a>, which lets anyone trade bitcoins for a small fee, we decided to find out.</p><p>A brief warning: If you're going to do this, tell your bank you're about to buy bitcoin. More on that later.</p> Bitcoin just hit an all-time high — here's how you buy and sell it

You can sign up to these as you would sign up to any website. Enter your name and email address and set a password to get started.

After that, it’s time to connect your bank account, debit card or credit card.

Use two-factor authentication to secure your account, but don’t use your phone number or SMS for this. According to security researchers, criminals only need to know your name and number in order to steal from your bitcoin wallet.

Instead, use Google Authenticator or a security key, such as the YubiKey.

Once you’ve done this, you can start investing in bitcoin. Whichever service you decide to use, you’ll be able to access a graph showing how bitcoin’s value has changed over time. It's likely to look extremely jagged.

With the value of bitcoin so high at the time of writing, it may come as a relief to hear that it is perfectly possible – and not at all unusual – to purchase small fractions of bitcoin.

Once you’ve established how much traditional money you’re willing to invest, complete your exchange through the wallet service, following their instructions. 

However, we can only reiterate how risky the move could be. Not only is bitcoin extremely volatile, but investors in it and other cryptocurrencies are frequently targeted by criminals.

Earlier this month, for instance, the value of bitcoin dropped by 5.4 per cent after $31m worth of cryptocurrency Tether was stolen. Coinbase users have been targeted successfully too.

The best thing you can do to protect yourself is to always proceed with extreme caution.

Scammers constantly use phishing attacks to try to trick people into visiting malicious websites that look official, but aren’t.

They commonly send out fake but legitimate-looking emails, which you need to be wary of. To stay safe, you simply shouldn’t engage with them.

Don’t follow any links in the messages or enter any private details they ask you for. Instead, you should always make sure you’re on the right website or app.

People are also being duped by malicious websites promising quick profits and trading tips. Again, use common sense to protect yourself, and don’t take any unnecessary risks.

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