Bitcoin has established itself as the fastest growing asset over the past decade. If in 2010 someone had invested 11 BRL in cryptocurrency, ten years later that amount would have turned into 4 million BRL. All of this appreciation is attracting the attention of people who are interested in investing in the asset.
At first glance, for a beginner, it may seem complicated to buy Bitcoin. But when you break the process down into steps, it becomes very easy. In this text, Canaltech shows you in a very simple way how to buy your first BTC – and, as a bonus, how to store it safely.
What is bitcoin?
Bitcoin is a digital currency created in 2009 by an anonymous person known only as Satoshi Nakamoto. Cryptocurrency uses a decentralized network of computers to handle trading. All transactions are recorded in a “ledger” called blockchain.
This “ledger” is like a huge public record of all transactions involving currency. Before that, however, these moves go through miners first. This group is responsible for “confirming” operations, activities that use the processing power of computers, some of them state-of-the-art, to increase speed. In return, they receive the fees paid by users, in addition to the reward for mining a new block from the network.
For better understanding, follow the example below:
- User A sends 1 Bitcoin to User B, paying a fee of 0.0001 BTC;
- The transaction is sent over the network. Miners prioritize those who pay the highest fees. All transactions are collected in a new block on the operated network. Every 10 minutes, a new block is mined; miners receive the fee, earn the reward of 3.25 new BTC. The transaction is confirmed on the network and arrives in the wallet of user B;
- All transactions that miners have collected in a block are recorded in the ledger. Currently, the network has more than 740,000 mined blocks.
How to buy Bitcoin in Brazil?
There are a few things a beginner should know before starting to invest in Bitcoin: It is necessary to have an account on an “exchange”, an English term widely used in Brazil to refer to a cryptocurrency brokerage. Exchanges are not the only ways to buy Bitcoin, but for a beginner it is the safest.
To open your account at the brokerage, you will need to send your identity documents, a process called “KYC – Know your Customer”, which means “know your customer”. These are normal procedures, government requirements to prevent fraud and money laundering. It is also recommended to have your digital wallet to store your Bitcoin, after all “the exchange is not a wallet”. We’ll talk about that later.
Choose a broker to buy Bitcoin
The first step is to choose a reliable company. Signing up for a cryptocurrency exchange will allow you to buy, sell, and even hold (as long as it’s for a short time) your cryptocurrencies. We will not indicate a particular broker, we will only show you the options of the most popular and reliable companies in the country.
Here are some of the most popular options in the Brazilian sector:
- Liqi: asset tokenization platform, which launched its own cryptocurrency exchange;
- Bitcoin Market: the largest cryptocurrency platform in Latin America;
- Novadax: Cryptocurrency Exchange that promises ease of transactions;
- Walltime: Platform for connecting buyers and sellers exclusively interested in Bitcoin;
- Foxbit: One of the largest exchanges in Brazil;
- BitPreço: Marketplace that connects multiple exchanges in one place;
- Bitcointoyou: First Brazilian exchange, operating in Brazil since 2010;
Nubank: The bank allows the purchase and sale of cryptocurrencies directly through the application (it is not possible to withdraw cryptocurrencies);
- Binance: the largest cryptocurrency exchange in the world, it has the widest variety of digital currencies;
After registration, the next step is to send your documents and go through the approval of the company. The process of buying cryptocurrencies differs from exchange to exchange. If you use a platform with simpler processes, such as Liqi or Walltime, just enter the value in Real to automatically know the corresponding amount in Bitcoin.
If you are using more complex platforms like Binance, you will see options like “market orders” and “limit orders” on the screen. A “market order” means that you buy the cryptocurrency at the price it is currently trading at, at the current market price.
A “limit order” means that you can choose an amount different from the current price. Example: The digital currency costs 100,000 BRL, but you set a limit order to activate when the price drops to 90,000 BRL. purchased automatically.
How to securely store your cryptocurrencies?
Many exchanges allow the user to leave their cryptocurrencies on the platform, which is easier for beginners. However, if you want more protection for your cryptos, it is better to transfer to a digital wallet. There are several types available and they all have different levels of security. The exchange may even offer an option, in order to facilitate the transfer of purchased coins to a safer location.
Basically, there are two categories: hot wallets and cold wallets. In both types it is possible to store Bitcoin and all other cryptocurrencies.
Holidays are understood by those who are not connected to the Internet. These are devices like USB sticks, they store the private key, an alphanumeric code that allows access to your coins. These are the safest types. Examples: Trezor, Ledger Nano, Coldcard, KeepKey.
Hot wallets are devices that are always connected to the network. They store your cryptocurrency’s private key on servers which, although still protected by various security protocols, can be hacked by cybercriminals – so these are less secure options, recommended for those who don’t have not very large sums of money invested in crypto. Examples of hot wallet are mobile apps like Mycellium, Coinomi, BRD Wallet; computer programs such as Electrum, Atomic Wallet; and also sites that offer this service, such as Metamask and Coinbase.
An interesting detail about cryptocurrency wallets is that whether hot or cold, the user is prompted to perform a data access security backup on first use. They are usually 12 or 24 words in English, which must be written in sequential order by the user.
The device displays the words; and the user annotates each snippet. Thus, in case of loss of the device, the person can easily recover the cryptocurrencies by entering the words in the correct order. Be very careful when performing this procedure, after all, this is what allows you to access your balance in a Lost Wallet.