Bitcoin is a virtual, digital cryptocurrency. You cannot touch it.
Bitcoin is stored in a virtual, digital E-Wallet. You cannot touch it.
A less than 3 minute read.
See disclaimer in the end.
This may be a different concept than what our mindsets are used to, but if you think of it, it is a money storage pattern that was implemented by all the banks in recent years. FIAT currency also became digital money and is now traded electronically.
Transacting between FIAT Currency and Cryptocurrency
You cannot simply convert FIAT currency into Bitcoin. You will first need to register an E-Wallet and then you have to transfer funds to your E-Wallet. Once the funds is cleared in the wallet, you can place a buy order and you can even set the price which you are prepared to pay for your Bitcoin. You will be buying fractions of a coin and the sale will be concluded in the crypto-exchange and recorded in the Blockchain the moment that there is a corresponding value available to match your order with a seller. The transaction may even be concluded partly and finished in following trades if there is not enough volume (coin fractions) available in the first trade.
To exit Bitcoin and go back into FIAT currency, it is basically a reversed procedure. You place a sell order and a buyer needs to match your sale in the crypto exchange. The money is then paid into your E-Wallet and from there you transfer it back to your bank account.
The different Cryptocurrency E-Wallets have different fee structures. Some will charge an annual fee, others will require a minimum balance and all will charge transaction fees.
Fees are charged for buying and selling Bitcoin as well as for making Bitcoin to Bitcoin payments. It is therefore best not to frequently move back and forth between FIAT currency and Bitcoin.
When you choose an E-Wallet, make sure that it is well established, secure and in business for some time. Look at the fee structure and very important, make sure that it accepts the FIAT currency of the country that you reside in. That will save you the additional cost of first having to convert from one currency to another when you want to fund your E-Wallet.
Most E-Wallets will prompt you to enable Second Factor Authentication. This is easily done by downloading the Google Authenticator App, scan the code provided in your dashboard in the E-Wallet and then an authentication code will be sent to you each time that you log in or transact inside the E-Wallet.
I am residing in South Africa. I am using LUNO as my preferred E-Wallet for many years. The LUNO application makes it easy to buy, store, trade and learn about cryptocurrencies in South Africa. I have tried a few others, but because of the ease of use and user-friendly interface, I stick with them. I never came across a bad review about LUNO. LUNO is also active in the UK and a few other countries.
My invitation to you if you reside in S.A.
1. Sign up with my invite link
2. Deposit and buy ZAR 500 (minimum amount) in Bitcoin (Luno exchange not included)
3. We both get ZAR 25.00 free Bitcoin
Scared of Bitcoin? ...Why?
The content is published as the opinion of the author.
It is not published as legal advice, nor is it meant to be financial advice.
Whilst effort has been made to ensure the accuracy of information shared, the author disclaims all liability in respect of the content of this information.
Readers are thus required to do their own due diligence and satisfy themselves in all respects as to the accuracy of the content.