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Monday, December 6, 2021

What Is the Best Way To Buy Crypto? A Bitcoin ATM Might Be a Good Idea

So, you’re looking at the insane money printing in your country and fear the reincarnation of the Weimar Republic?

You’ve decided that now it’s time to buy Bitcoin and other cryptocurrencies. There was a huge push to buy cryptocurrency with the global economic crisis that began in 2020.

We saw Bitcoin reach heights that it hadn’t before — after so many skeptics had written it off. So if you want to buy Bitcoin, now is the time.

But what’s the best way to buy crypto?

Here are the different ways and why Bitcoin ATMs might be the best option:

What to Know Before You Buy Crypto

Before you decide to buy cryptocurrency, there are a few rules you should know about.

You must first learn the laws and regulations regarding buying crypto in your jurisdiction. For example, you must know the KYC (Know Your Customer) regulations in that jurisdiction.

For example, you might have to divulge certain personal information to buy crypto. This can include your name, address, contact information, etc. You might be required to provide your tax details to a web exchange when you buy cryptocurrency.

You must always follow the laws of your jurisdiction when you decide to buy cryptocurrency.

But it’s also wise to protect your privacy as much as possible. You want to choose an option to buy crypto that requires you to divulge as little information as possible.

That’s why a Bitcoin ATM might be the best option to buy crypto.

How a Bitcoin ATM Works

When you go to a Bitcoin ATM, you’ll have to present a form of ID to verify your identity. In most cases, this is the only identification you’ll have to present to buy Bitcoin from a cryptocurrency ATM.

You’ll insert cash to buy Bitcoin. After your payment goes through, the Bitcoin ATM will print out a receipt. This receipt will contain the information for your cryptocurrency wallet. This includes your Public Key and Private Key. In most cases, it’ll also include a QR code to easily access your wallet.

This type of paper wallet is arguably one of the best ways to protect your Bitcoin and other cryptocurrencies. As long as you don’t divulge your Private Key, you won’t have to worry about your crypto getting stolen.

As more Bitcoin ATMs arise in major cities, one can expect these to become the preferred method to buy crypto.

You can search for “bit coin locations near me” to see if there are any Bitcoin ATMs in your area.

But as we wait for Bitcoin ATMs to grow in popularity, we contend with the fact that web exchanges and hardware wallets are the primary methods to buy crypto.

But are these options ideal? What are the pros and cons of each and how do they compete with a Bitcoin ATM?

Let’s start with how a web exchange to buy crypto works.

Hold Crypto Through a Web Exchange

Web exchanges are currently the most popular option to buy Bitcoin and other cryptocurrencies. They’re also the easiest method for selling and trading cryptocurrencies.

For the average person who doesn’t understand the technology behind cryptocurrencies and blockchain, this is a great option. For those who want convenience, web exchanges can’t be beaten!

So what’s the issue with web exchanges? Why should one buy and hold their cryptocurrencies on web exchanges?

A web exchange offers you a web-based wallet for holding your cryptocurrency. This works in the same manner as storing your cash in a bank.

This convenience is what leads so many new crypto investors to put their trust in a web exchange rather than using a hardware wallet or paper wallet.

But here’s what you have to consider: do you entirely trust the banking system? The people of the Republic of Cyprus, for example, have every reason not to!

One of the biggest concerns for any smart investor should be wealth confiscation. As crypto rises in popularity, tyrannical governments might wish to confiscate your crypto as a means of stealing your wealth. Of course, there are also everyday hackers to worry about.

While you might keep much of your money in your bank, you likely hold some cash at home. Similarly, you want to hold as much of your crypto as possible.

With a web exchange, you don’t hold your crypto. The web wallet holds it for you. This means that you’re wholly dependent on a company to protect your cryptocurrency for you.

You can also expect reporting of your crypto holdings to be done through the web exchange. Your financial privacy is greatly compromised with this method of holding your crypto.

Hold Crypto Through a Hardware Wallet

This option is considered to be the best option by most crypto investors. As such, it’s often the only option that serious crypto investors use. Hardware wallets are rising in popularity, but haven’t yet surpassed web wallets.

With a hardware wallet, you can store your Bitcoin and other cryptocurrencies offline. While a hardware wallet can get hacked, it’s a lot harder to hack a web wallet. 

A hardware wallet offers a lot more security than web wallets as well. When you install your web wallet, you’ll get your Public Key and Private Key.

You’ll also get your recovery phrase in case you lose this information. Some hardware wallets give you the added step of setting up a PIN to access your cryptocurrency.

This puts a lot more responsibility on the owner to protect their crypto. This added responsibility is likely what puts many people off the idea of using hardware wallets. While the responsibility might seem like a hassle, it’s a far better way to protect your crypto from theft. It also offers a greater level of financial privacy.

So what’s the downside of a hardware wallet? Why bother with Bitcoin ATMs when hardware wallets offer so much protection?

It’s because there’s still a great chance of theft and hacking. Many hardware wallet manufacturers will hold your personal information including your address in your database. This leaves you vulnerable to a hack, as what happened with the Ledger hacking fiasco!

While it’s much harder to hack a hardware wallet, it continues to happen. There are crypto investors who have lost entire fortunes from hardware wallet hacks! Paper wallets are the remaining alternative that offers the best security.

Hold Crypto Through a Paper Wallet

So now we come to the final option of holding your crypto through a paper wallet. 

This is perhaps overlooked as it doesn’t have the sophistication of a web wallet or a hardware wallet. But this is one of the most conspicuous ways of protecting your crypto assets.

You can keep your crypto wallet on your person at all times. You can also keep it in a safe in your home. As long as no one else has access to this slip of paper your crypto is safe.

Buying Bitcoin or other cryptocurrencies through a Bitcoin ATM is the least intrusive method for your financial privacy as well.

As stated before, the only intrusion is an ID verification and a potential recording from a CCTV camera. The paper wallet won’t have any personal details printed on it. This is in complete contrast with a web exchange that requires you to register a user account.

The paper wallet solution requires you to take added precautions for your security. If you lose your paper wallet, you’ll lose access to your cryptocurrency forever. While this is nerve-wracking for some crypto investors, it’s the best way to protect your crypto.

Why You Need to Protect Your Crypto

Now let’s look at the importance of protecting your crypto. As mentioned, the paper wallet option offered by a Bitcoin ATM is the safest choice.

So why do you need to be cautious about protecting your crypto? The same way that you’ll want to protect your fiat currency.

The two main concerns about protecting crypto come from concerns about tyrannical governments and hackers. 

Crypto Seizures

Firstly, you should always follow the laws of your jurisdiction. Many crypto investors might choose hardware wallets and paper wallets as these are less intrusive on your financial privacy. However, if you’re required to report your crypto assets then you must do so!

But it’s always best to do the reporting yourself rather than having another institution report your crypto.

Different countries have varying attitudes toward crypto ownership. Some countries will impose tyrannical rules to confiscate or severely tax your crypto assets. As such, you might want to keep your crypto under the radar if it’s legal to do so. 

You might even want to consider relocating to more favorable jurisdictions to protect your crypto. Many crypto investors find countries like Antigua and Barbuda, Portugal, Switzerland, or Singapore to be more favorable for investing in crypto.

Crypto Hacking

The next concern is crypto hacking. As mentioned, a paper wallet is the hardest crypto wallet to hack. As such, you’re less likely to lose your crypto assets if you hold them in a paper wallet.

But, as scary as losing your crypto fortune might be — that’s only the start of your troubles! The hackers can learn about your personal information and use this information to track you.

For example, you’ll likely have to provide your address and banking information if you buy crypto from a web wallet. If you buy a hardware wallet online, your address might also get stored on a database.

This information can get shared on the dark web and you’ll be a target for hackers. You can get stalked or have someone break into your home to seize even more of your assets!

It’s crucial to protect your privacy as much as possible. As such, you want to avoid sharing your personal information when you don’t have to.

If you have to report your crypto assets to your tax authorities, you can do so on your own. Don’t outsource this responsibility to a third party who’ll also have access to your information. You can’t always be sure that this third party will protect your data.

Best Practices

So, are you convinced that Bitcoin ATMs are the way to go?

If so, you want to consider some of the best practices to ensure you have no problems with buying crypto through a Bitcoin ATM. 

The first is to consider where a Bitcoin ATM is located. You should never use a Bitcoin ATM that isn’t in a safe location. After all, would you withdraw cash from an ATM in a high-crime area?

As cryptocurrency rises in popularity, one can, sadly, expect theft to rise around Bitcoin ATMs. Always stick to Bitcoin ATMs in safe areas. You also want to only buy crypto from ATMs in jurisdictions with lax crypto regulations.

For example, do you travel often? If so, you might want to only buy crypto when you travel to a jurisdiction that’s friendly to crypto.

You want to check if buying crypto in that jurisdiction requires local tax reporting. Try to avoid this as much as possible unless you’re willing to put up with the hassle of reporting.

In most cases, you’ll need cash to buy Bitcoin and other cryptocurrencies. You might want to consider how much crypto you’ll get based on your cash holdings. For example, do you get more Bitcoin if you buy with US Dollars or with Euros?

If you travel often, then you might want to consider if it’s better to buy crypto with the local currency or your native currency.

That’s the Best Way to Buy Crypto

Now that you know the best way to buy crypto, you can go to a Bitcoin ATM to start loading your wallet!

With a paper wallet, you’ll be responsible for protecting your crypto. You’ll get to buy crypto with fewer intrusions to your financial privacy.

Web wallets divulge your information to tax authorities and are vulnerable to hacking. Hardware wallets are more secure but still are vulnerable to hackers.

A cryptocurrency ATM is the best way to buy Bitcoin and build your wealth through digital money!

You can find more great content on cryptocurrency here on our website!

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