Taking part in something new can be fun and thrilling. However, new engagements also require cracking the books, and the same goes for entering the world of digital currencies. When people think of buying Bitcoin (BTC), they don’t realize that it’s not a whole entity. BTC is very divisible, meaning you can buy fractions of a Bitcoin.
Bitcoin’s smallest unit is called a satoshi, named after BTC’s enigmatic creator. It represents one hundred millionths of a Bitcoin or 0.00000001 BTC. These smaller units allow people to buy Bitcoin in smaller denominations at a more affordable price.
To help get you started, here’s a quick guide that’ll teach you how to make your first Bitcoin investment.
Choosing a platform
Before you start in cryptocurrency—whether it’s buying or selling—you must carefully choose a trading platform that best suits your trading style. There are two types of platforms where you can trade digital currencies: traditional exchanges and peer-to-peer (P2P) marketplaces.
Traditional exchanges vs. P2P platforms
Traditional Bitcoin exchanges have been around much longer, with the first one popping up in 2010. These centralized platforms match buyers and sellers using an order book or an electronic list of offers. Once matched, these exchanges will facilitate the safe transfer of your crypto or fiat into BTC and vice-versa. So in a way, they kind of act like a middleman, helping you get through the trade.
P2P marketplaces, on the other hand, don’t operate as a third party. Although they also use order books to match them, the difference is that they let the buyers and traders transact directly and only intervene in the case of a dispute. P2P platforms often use escrow services and additional security measures to keep the traders safe.
Since traditional BTC exchanges act as a middleman of the trade, buying Bitcoin on those platforms can be more expensive than P2P platforms. Some platforms can even charge up to a 6% fee on each purchase.
On the other hand, fees on P2P platforms will vary per vendor, payment method, and the platform itself. Paxful, for example, does not charge any fees to buyers. Instead, sellers are the ones that are charged a small fee.
Another thing to look out for is the minimum purchase amount. Some traditional exchanges will set 100 USD as the smallest amount you can buy. Alternatively, P2P platforms like Paxful have a lower minimum, allowing you to start with as little as 10 USD with nearly 400 payment options to choose from.
Buying small amounts of BTC on Paxful
Looking to start small? We can help with that. To buy a small amount of BTC on Paxful, you can follow these three simple steps:
Step 1: Create an account and find an offer
To start, head to the home page and input your preferences so that we can help you find an offer that’s right for you. After selecting BTC as the crypto you want to buy, choosing a payment method, and inputting how much you want to spend (it’ll say the minimum amount below this field), click Find Offers.
You’ll then be shown a list of offers that tailors to your needs. Carefully analyze each detail to choose the best one for you. Here are a few things to look out for:
- How much you’re getting on the dollar – This refers to the profit percentage of the seller. The closer this amount is to a full dollar, the better.
- Offer terms – This is a summary of the seller’s requirements. Make sure to choose an offer with terms you can comply with.
- Seller feedback score – This will indicate how reliable your potential trade partner is. The more positive feedback the user has, the more reliable they are. If you want more insight about the user, you can also head to their profile and check their trade volume and history.
Seller availability – Make sure that you choose an offer with a seller that was active recently. Selecting an inactive one could lead to an expired trade later on.
Step 2: Start the trade
Once you see an offer you like, click on the Buy button. Before starting the trade, quickly go over the offer terms, input how much BTC you want to buy, and then click Buy now to start the trade.
As soon as the trade starts, the seller will send their payment instructions. Make sure to follow these carefully because it can be taken against you if there’s a dispute. If you have any questions about the requirements, feel free to send your trade partner a message via live chat.
After sending in the requirements, mark the trade as Paid and wait for the seller to verify your payment.
Step 3: Receive BTC and leave feedback
Once the seller verifies your payment, they can release the BTC from escrow and the trade is complete. Congratulations, you’ve just purchased BTC! All that’s left to do is leave feedback for your seller and be on your way.
Get started today
As you can see, buying small amounts of BTC isn’t that hard on Paxful. If you’re interested in learning more, you can head to our knowledge base and get all the information you need about trading on the platform. If you’re itching to go and ready to buy Bitcoin, we’ve got offers waiting for you.