If you're reading this, then you probably don't need much convincing about why you should invest in Bitcoin. It's probable that you already know that Bitcoin digital currency is revolutionarily transparent, accountable, trustworthy, and decentralized.

So, we'll skip the pitch and get straight into the nitty-gritty of how to invest in Bitcoin. Ready?

The easy way to buy Bitcoin is also the most direct. No, you don't need to do anything special like move money to a secret account. Most governments are totally fine with you buying Bitcoin as long as you pay your taxes — unless, of course, you live in Nepal, in which case using Bitcoin is banned altogether.

Let's jump into how to buy Bitcoin in a few simple steps. Depending on how quickly you move, the whole process should only take 20 to 30 minutes — perhaps even less!

1. Create a Bitcoin Exchange Account

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First and foremost, you'll need to start by creating a Bitcoin exchange account.

A Bitcoin exchange is less complicated than it sounds — to use one, you don't need any special trader-specific knowledge. A Bitcoin exchange doesn't look anything like the trading floor of the Nasdaq, either.

Instead, Bitcoin exchanges are simply web-based dashboards and apps that have simplified the experienced down to the click of a few buttons. Today, buying BTC is similar to placing an Amazon Prime order.

There are a few categories of Bitcoin exchanges. The one for you will depend on the amount of options you want for creating your BTC investment.

Bitcoin Exchange for Beginners — If all you want to do is invest in Bitcoin with the least amount of complication then store the digital currency long-term, then this is the exchange for you. In fact, this category of Bitcoin exchange doesn't look or feel like an exchange at all since it is mostly app-based. Looking for a Venmo or PayPal-level experience for buying BTC? This is it.
Bitcoin Exchange for Traders — First off, there is the Bitcoin exchange for traders. These exchanges have simple versions with less trading tools for people who want to easily buy Bitcoin. However, where they really shine is in providing TradingView charts, tons of technical analysis tools, and different options for buy-types such as stop loss, trailing stops, and more. Go for this type of Bitcoin exchange if you want to invest in BTC, then grow your skills as a trader.
Bitcoin Exchange for Peers — Perhaps you've studied up on the decentralized nature of blockchain and want to stay true to Satoshi Nakamoto's vision. In that case, you'll prefer a decentralized Bitcoin exchange that enables peers to connect with each other to buy and sell Bitcoin directly, all without an intermediary institution. P2P Bitcoin exchanges allow peers to connect their secure Bitcoin wallets and trade with the lowest fees. While slightly more complicated than options #1 and #2, decentralized exchanges are worth the effort.

After you've decided which category best fits you, it is time to create a Bitcoin exchange account. Regardless of which category exchange you go for, the process is usually the same — just head over to the registration page and fill out the signup forms.

There are a couple key points to note. First, for categories #1 and #2, you'll need basic identifying information to prove that you're who you say you are, and that the bank account you're linking belongs to you.

For category #3, you won't need to provide identifying information at all, but you will need a cryptocurrency wallet with cryptocurrency already in it to trade against Bitcoin.

Bitcoin Exchanges for Beginners

Square Cash App — A simple way to buy Bitcoin using a trusted app.
Coinbase — The Coinbase app makes investing in Bitcoin simple.
Coinmama — Pioneered buying Bitcoin with a credit card.

Bitcoin Exchanges for Traders

Binance — Global, trusted crypto exchange.
Huobi — Pro tools for experienced traders.
Gemini — Crypto exchange run by Winklevoss twins.
Kraken — Popular Bitcoin exchange for European investors.
eToro — Social platform both buying and selling Bitcoin.

Bitcoin Exchanges for Peers (Decentralized)

Binance DEX — A decentralized Exchange run by Binance.
IDEX — Popular DEX for trading ERC20 tokens.
Kyber Network — Simple, decentralized tool for swapping cryptocurrencies.

2. Buy Bitcoin With a Credit Card, Debit Card, Linked Bank Account, or Crypto

After creating an account with the Bitcoin exchange of your choice, the next move is to invest in Bitcoin by buying some!

This part is really simple and straightforward because the hardest choice is behind you now (choosing the right Bitcoin exchange).

One word of advice, however, is that not all of the exchanges in the previous section work with your payment method of choice. So, figure out which way to pay is the best method for you, then double-back and make sure the Bitcoin exchange you've chosen is correct.

The Bitcoin exchanges for beginners and traders all have options for investing in Bitcoin with a credit card, debit card, or linked bank account, while the decentralized exchanges do not.

If your payment method is strictly cryptocurrency, then a decentralized crypto exchange, or a Bitcoin exchange for traders will suit you best.

With that out of the way, let's evaluate how to invest in Bitcoin with a credit card, debit card, or linked bank account.

No matter which exchange you choose, you'll need to go through several verification steps before buying Bitcoin. To save yourself time, have the following things ready before starting the process:

An official form of ID such as driver's license, passport, or ID card.
Your credit card, debit card, or bank account information (account number, routing number, and name of bank).
Proof of address (a recent utilities bill will suffice).

With these items in hand, you'll be ready to invest in BTC in just a few minutes.

It might be worth having a shave before applying, however, as sometimes the exchange will ask for a selfie to make sure you're really you!

After adding your payment information to your Bitcoin exchange account, you're ready to go. At most exchanges, the process for buying BTC is super quick and is over after just a few clicks.

In a nutshell, simply specify the amount of BTC you're buying, or the amount of fiat currency you want to spend. Confirm the amount on the following screen, then submit the transaction, and voila!

Is it safe to invest in Bitcoin with a credit card, debit card, or linked bank account?

You may be wondering if using your credit/debit card or bank account is safe when buying Bitcoin. After all, there are enough bad news stories about hackers and compromised information out there to scare even the most confident buyer.

However, it is perfectly safe to buy Bitcoin with a credit card, debit card, or linked bank account as long as you do so through a trusted Bitcoin exchange.

Trusted Bitcoin exchanges share several qualities. They are:

Regulated — Following local regulations & ordinances
Compliant — Complying with KYC and AML laws
Insured — Backed by an insurance policy that covers losses

In the previous section, all Bitcoin exchanges for beginners and traders listed share these three qualities, making them all phenomenal choices for safely investing in Bitcoin.

Is it legal to buy Bitcoin?

Buying Bitcoin is legal — very legal — in most countries in the world with a few exceptions.

China
Vietnam
Colombia
Ecuador
Bolivia
Egypt
Pakistan

Apart from these countries, the rest of the world deems it legal to buy Bitcoin, although many still maintain Bitcoin banking bans.

Do I have to pay taxes for my Bitcoin investment?

In a word, yes. Investing in Bitcoin constitutes a taxable event in most countries where it is legal.

Luckily, Bitcoin exchanges like Coinbase, Binance, and others make this process extra easy on you by providing printable tax documents related to your investments.

3. Store Bitcoin In a Trusted & Secure Cryptocurrency Wallet

Chose a trusted Bitcoin Exchange — check.

Bought BTC with a credit card, debit card, bank account, or crypto — double check.

What's left? Storing your investment, of course!

Now, conventional wisdom over the past few years has stated that one should never store Bitcoin in an exchange wallet. Is that still true? The answer is...yes and no.

Coinbase, for instance, insures the balance of any funds that are left in hot wallets on the exchange (approximately 2% of all digital currency managed by the exchange). Binance backs its digital wallets with an insurance fund called SAFU.

So, at the larger exchanges, insurance is common. Does this make it ok to store your Bitcoin there? Potentially, but doing so is far from ideal.

That's because the wallet belongs to the exchange — not you. The most secure way to store Bitcoin is always going to be a in a private digital currency wallet that you own the keys to.

What's more, not all personal Bitcoin wallets are made equal. To get the most out of wallet security, you'll want to go with what's known as a hardware wallet.

Hardware wallets are USB-like physical devices that protect the private keys which unlock your Bitcoin wallet. With a hardware wallet storage for Bitcoin, you're the sole owner of the private keys which access it, making your financially independent.

In our book, that's a great way to store your funds since you won't have to depend on an outside source for accessing your Bitcoin investment.

At this point, the hardware wallet race only really has two horses.

There are other brands out there making solid hardware wallets for Bitcoin, but Ledger and Trezor are leagues ahead of the field in terms of security.

Conclusion

Investing in Bitcoin is way easier today than it was just a few short years ago, or even last year! Bitcoin exchanges have made strides in softening up the user-experience from a hackery, hard to navigate one to a process on-par with using Amazon Prime.

In the near future, this process will likely become even easier with one-click Bitcoin investing apps coming online.

Regardless of what technology the future brings, you can invest in Bitcoin right here, right now, by following the simple steps outlined in this guide.

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How to Invest in Bitcoin: 3 Easy Steps