How to Buy BTC

In the previous article, you learned why Bitcoin is the ultimate reserve asset and why it’s a no-brainer to allocate some of your savings into the best-performing asset in human history. Now, we continue by reviewing how you can actually build the financial fortress of your future.

You Will Learn:

• How to set up your infrastructure to make any Bitcoin purchase cheap and easy.

• How to store your coins for maximum security and ease of use.

• How to invest strategically.

Where to Buy Bitcoin

In this chapter, we’ll explore some of the best ways to purchase Bitcoin safely and conveniently.

Centralized Cryptocurrency Exchanges (CEXs)

The most common way to buy Bitcoin is through centralized exchanges (CEXs). Think of these as Bitcoin’s front doors—they’re the easiest way to enter the market and bridge the gap between your bank and the blockchain.

These platforms act as intermediaries, facilitating Bitcoin purchases with various deposit methods like bank transfers and credit cards. They offer high liquidity, user-friendly interfaces, and customer support (though, let's be real, some are better than others). The catch? They require Know Your Customer (KYC) verification, meaning you’ll need to provide ID before buying BTC.

Top Tips for Using CEXs

✅ Recommended exchanges: Binance.com or Coinbase.com (for US citizens).
✅ Use bank transfers, not credit/debit cards, to save on fees (cards usually charge 2-2.5% per transaction).
✅ Enable Two-Factor Authentication (2FA) to protect your account from hackers.
✅ Never store your Bitcoin on an exchange—seriously, don’t do it! Exchanges are great for buying BTC, but terrible for long-term storage. Think of them like airport lounges—you pass through, but you don’t live there.

💡 Why move your Bitcoin off exchanges? Hacks happen. Remember Mt. Gox? Or more recently, FTX, then ByBit? Billions lost. The golden rule: Not your keys, not your coins!

How to Store Bitcoin Securely

So, you’ve got some Bitcoin—now what? Leaving it on an exchange is like hiding your cash under someone else’s mattress and hoping they don’t run off with it. To truly own your Bitcoin, you need to self-custody it.

1. Understanding Bitcoin Security: Public Keys, Private Keys & Seed Phrases

• Private Key: A long, randomly generated number that grants full control over your funds. Think of it as the password to your Bitcoin.

• Public Key: Derived from the private key, this acts like your bank account number—safe to share, allows others to send Bitcoin to you, but doesn’t grant access to your funds.

• Seed Phrase: A human-readable backup of your private key, typically 12 or 24 words. If you lose your wallet, you can use this phrase to restore access to your funds. Never share your seed phrase!

2. Hardware Wallets (Cold Storage) – The Best Way to Secure Your Bitcoin

Hardware wallets are secure devices designed to store your private keys—the secret codes you use to sign Bitcoin transactions—within a tamper-resistant environment. This isolation means that even if your connected computer is compromised, your private keys remain secure. To further enhance security, airgapped wallets take this concept to the next level by completely isolating the signing process from any network. Instead of connecting directly to an online device, these wallets use QR codes (or microSD cards) to transfer data: an unsigned transaction is generated on an online device, converted into a QR code, and then scanned by the airgapped wallet to sign the transaction offline. The signed transaction is then displayed as a QR code, which is scanned back into the online device for broadcasting. This method ensures that your private keys never leave the secure hardware, providing an extra layer of protection against digital threats.

💡 Best Air-Gapped Wallets:

✔ SafePal Wallet ($50-$90)
✔ Passport Foundation Wallet ($200)

✔ Keystone 3 Pro Wallet ($149)

3. Multi-Signature Wallets – Extra Security for Large Holders

Multi-signature (multi-sig) wallets require multiple private keys to authorize a transaction, adding an extra layer of security. Ideal for institutions, businesses, or large Bitcoin holders.

Example: A 2-of-3 multi-sig setup requires at least two out of three key holders to approve any transaction.

4. Run Your Own Node

Running your own Bitcoin node is a powerful way to take control of your digital assets while reinforcing the decentralized ethos of the Bitcoin network. By hosting a full node, you independently verify every transaction and block, ensuring that you rely on your own trusted copy of the blockchain rather than third-party sources. This process not only boosts your personal security and privacy but also contributes to the overall resilience of the network, as each node helps propagate accurate and censorship-resistant data. Although running a node requires a commitment to maintaining sufficient storage space (as the blockchain continues to grow) and a stable internet connection, modern software and affordable hardware options have made it increasingly accessible for everyday users. Embracing this approach to storing and managing Bitcoin empowers you to become an active participant in the network, reducing reliance on external intermediaries and reinforcing the foundational principles of financial sovereignty.

Pros of Running Your Own Bitcoin Node:

• Enhanced Security and Privacy:
  Running a full node means you verify transactions and blocks directly, reducing your reliance on third-party services and minimizing exposure to potential surveillance or manipulation.

• Increased Trust and Decentralization:
  With your own copy of the blockchain, you ensure that all data complies with consensus rules. This contributes to a more resilient, censorship-resistant network as every additional node strengthens decentralization.

• Wallet Integration Flexibility:
  Many wallet applications can connect to your full node, allowing you to benefit from its enhanced security and privacy features. For example:

  • Electrum: A lightweight, user-friendly wallet that can be configured to connect directly to your node for improved privacy.

  • Wasabi Wallet: Focuses on privacy features like CoinJoin and works well with a full node to verify transactions independently.

  • Specter Desktop: Designed for use with hardware wallets, it integrates seamlessly with your node to help manage multisig setups securely.

  • Sparrow Wallet: Offers a modern interface with robust full-node connectivity for accurate transaction verification.

  • Bitcoin Core’s Built-in Wallet: If you’re using Bitcoin Core as your node software, its integrated wallet provides an all-in-one solution.

Cons of Running Your Own Bitcoin Node:

• Resource Demands:
  Full nodes require significant disk space—as the blockchain grows (currently over 500GB and counting)—and continuous bandwidth, which might increase operational costs.

• Time-Consuming Setup and Maintenance:
  The initial synchronization of the blockchain can be lengthy. Additionally, regular software updates and occasional troubleshooting are necessary to keep the node running smoothly.

• Technical Complexity:
  Operating a full node may require familiarity with command-line tools, network configuration, and basic troubleshooting, which could be a barrier for users without technical expertise.

• Increased Costs:
  Beyond hardware investment, running a node might lead to higher electricity bills and internet usage costs over time.

By carefully considering these pros and cons, you can decide whether the benefits of running your own Bitcoin node—especially when integrated with robust wallets—align with your goals for privacy, security, and active participation in the Bitcoin ecosystem. Running your own node is not necessary to keep your assets safe, it does offer extra privacy however.

5. Avoid Software Wallets (Hot Storage)

Software wallets are connected to the internet, making them more vulnerable to hacks. Use them only for small, everyday transactions.

Popular hot wallets:

• Exodus

• Electrum

• BlueWallet

• Muun

6. Backups & Security Best Practices

• Write down your seed phrase on paper (never on a computer), or engrave it on metal for durability.

• Use a fireproof and waterproof safe for storing backups.

• Enhance seed security by splitting your 24-word phrase into three 16-word shares stored in separate locations. Any two shares can recover your wallet—protecting against the loss of one set. Each share is missing 8 words, so even if a hacker obtained a 16-word piece would make no use for them as cracking the missing words would cost a gigantic amount of time and money.

⚠ Never share your private keys or seed phrase—if someone gets them, they own your Bitcoin!!!

7. BTC IRA Accounts – Secure Storage with Tax Advantages

For US citizens, a Bitcoin IRA (Individual Retirement Account) provides a tax-advantaged way to hold Bitcoin while ensuring secure storage through regulated custodians. Check out our article for more info in BTC IRA accounts.

✔ BTC IRAs Offer:

• Institutional-grade cold storage.

• Regulatory compliance & insured funds.

• Tax advantages (tax-deferred or tax-free growth).

How to Invest in Bitcoin Strategically

Investing in Bitcoin requires a solid plan to avoid emotional decision-making and maximize long-term gains. A plan should include entry and exit strategies as well as risk management.

1. Buy Strategies

✔ Dollar-Cost Averaging (DCA) – Buy a fixed amount of BTC at regular intervals (weekly/monthly) to average out price volatility.
✔ Lump-Sum Investment – Invest a large sum at once. Historically, Bitcoin appreciates rapidly, so this strategy is often better than DCA.
✔ Mixed Strategy – A combination of lump-sum investing and DCA.
✔ Buy the Dip – Purchase BTC during market downturns for better returns.

2. Sell Strategies

✔ HODL (Hold On for Dear Life) – Long-term holding based on belief in Bitcoin’s future value.
✔ Take Profits Gradually – Sell small percentages at predetermined price levels or time intervals
✔ Use Bitcoin as Collateral – Instead of selling, borrow against your BTC using platforms like Aave, Compound, QiDao.

3. Risk Management

✔ Buy BTC with money you can't afford to lose.
✔ Keep BTC in cold storage for long-term holdings.
✔ Have a plan and stick to it—avoid emotional trading.

A well-thought-out investment plan ensures you make rational decisions, navigate volatility effectively, and secure long-term financial growth.

For a detailed approach to structuring a Bitcoin investment plan, check out the Bitcoin Retirement Plan article.