Buying Bitcoins - made simple
When people first hear about Bitcoins they have a lot of questions. Cryptocurrency is actually simple to understand. It is a way to exchange value over the Internet. It is actually very easy to buy, but you need to be careful that you buy and store your Bitcoins from a trusted source. Although BitsofKoin.com does not give financial advice, or make recommendations we can say that Coinbase is a user-friendly, respected, USA based exchange with a great track record. If you like their interface, it may be a great place to start. Since Bitcoins are becoming more widely used there are a growing number of exchanges. The reliability of some is questionable. Several non-USA based exchanges have actually closed down and / or defrauded their customers. So buyer beware! You can store your Bitcoins on an exchange. If you do, we suggest you use the highest level of security the exchange offers. Security is always changing. However, one system that Coinbase uses to protect your Bitcoins is called the Vault. Withdrawals from your vault have a 48 hour window during which the withdrawal can be canceled. Joint accounts can be used for extra security, requiring multiple approvers to initiate a withdrawal. In addition, 2 factor authentication with an authenticator adds an extra level of security. They also state that they store most of the Bitcoins offline in geographically distributed safe deposit boxes and physical vaults.
Nothing is 100%. However, Coinbase does seem to be dedicated to securing your Bitcoins in the safest ways. We would suggest you regularly review security policies and make sure that your Bitcoins are stored in the safest possible way at the time. If you want to store your Bitcoins offline, there are a number of options. One option is a paper wallet. Paper wallets are explained in an article at BitsofKoin. There are also electronic storage devices you can purchase that keep the code to your cryptocurrency offline. The choice is yours, but whatever you decide to do in terms of storage it is good to stay up to date as security is always an issue with any form of banking or financial exchange.