How to buy a bitcoin

There’s no shying away from it, buying Bitcoin is a risk.

In March 2013, one bitcoin cost just $40; a year later and the price is $667, hitting a peak of $1,151 over Christmas.

Who knows what’s going to happen next? Aficionados claim the currency will reach $10,000 by the end of 2014, but that’s looking wildly optimistic after the collapse of the world’s biggest Bitcoin exchange, Mt. Gox, last month.

On the other hand, with HMRC now having scrapped tax on the cryptocurrency, it might not be long before mass adoption. That will see the price drop hugely as people begin using it.

For those of you who think mining Bitcoin is just way too expensive (it really is), that will be the time to buy in.

For you others who are lucky enough to consider yourselves a little more flush, you may want to consider buying now, while the price is – admittedly relatively – low, then selling up when it inevitably hits another peak in value.

For all of you, here’s CBR’s guide on how to buy one.

(Bit)coins need a wallet

Before you do anything, you need to get yourself a wallet. A digital wallet – those coins are virtual, after all. This is what lets you send and receive bitcoins.

You can try bitcoin.org or others to get one, but all you need do is download what’s known as a Bitcoin client for your operating system, then click ‘new’ to install your wallet.

These electronic wallets are essentially a place to store your strings of letters and digits; your own personal keys to your bitcoins.

Just like when you lose your wallet in real life, if you misplace your virtual wallet, then your money’s lost too.

That’s why it’s important to make a note of your wallet’s web address, if you use one hosted in the cloud like blockchain.info , so you can get back to it if you delete your browsing history or something.

NB. Your wallet address is totally fine to share – in fact you need to if you want to receive any bitcoins: it’s the equivalent of an account number, rather than your PIN.