How to Buy and Sell Bitcoin for Beginners

We get a local cyrptocurrency expert to help explain blockchain for us blockheads.

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Westchester native and cryptocurrency developer Mark D’Agostino teaches us the basics and buzzwords you need to know about Bitcoin.

Digital currencies have had a hell of a first quarter, and it’s barely February. Bitcoin — and by extension nearly all other cryptocurrencies —soared to record highs at the end of 2017, before plummeting two-thirds in value. As I write this, the price of one Bitcoin is hovering around $8,000; not the $20,000 peak around Christmas, but a far cry from the $0.08 it was trading at in the middle of 2010. As of press time the value is just over $11,000, representing a 28 percent increase over the last week but a 12-plus percent dip over the past month.

Such volatility is often cited as one of the major hurdles for prospective Bitcoin investors, but probably the largest can be summed up in a single question:

What the hell is a Bitcoin?

To help explain the what and how of cryptocurrencies, we spoke with Mark D’Agostino, CEO of Grid+, a company tasked with using blockchain software and a dedicated digital currency to more efficiently manage energy consumption in the home. D’Agostino previously worked as a consultant for various financial firms in Manhattan — including several Fortune 500 companies — before joining ConsenSys, a company Crain’s recently profiled as “the brains behind” the cryptocurrency Ethereum. (Grid+ spun directly out of ConsenSys.)

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Bitcoin is a digital-only form of currency developed to allow anyone to transact over the Internet without having to rely on banks or other middlemen. Remember how annoying it was to try and split a bill before everyone you knew had Zelle/QuickPay/PayPal/Venmo/etc.? Now imagine if you could just send money the way you send an email or an MP3, without having to rely on these other companies.

Blockchain is the software that makes this system possible. When you send an MP3, you really just copy the file and send it to someone; you don’t lose the original in the process. That clearly doesn’t quite jive with owning money, and is called the “double-send” problem. Bitcoin’s mysterious (and potentially fictional) inventor — Satoshi Nakamoto developed software that allowed a diffuse network of computers to verify transactions by consensus, thus eliminating the need for secure banks and governing bodies. Blockchain, D’Agostino says, is a completely public ledger spread out across the entirety of the Bitcoin network. You can’t hack the entire network, and you can’t forge a document across millions of checkpoints.

Related: How Is Rising Interest in Bitcoin and Blockchain Affecting Investment Markets?

Ethereum holds a different class of blockchain tokens. For technical and historical reasons that are incredibly complex, Ethereum is more like a family of currencies than just one unit. “Ether,”“Ripple” (or “XRP”), “EOS,” and “Dogecoin” are some of the most currently well-known Ethereum-based currencies. An apt analogy would be that Bitcoin is Apple’s iOS and Ethereum is the multitude of slightly different Android operating systems. The big takeaways however are that:

A) Ethereum’s code is what is primarily used to create thousands of other “altcoin” currencies, and

B) while not completely decentralized, Ethereum allows for not just transactions, but theoretically the coding of infinitely complex contracts and programs.

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“It’s a Turing-complete virtual machine,” D’Agostino says. “Anything you can think of, any computer application in the world, you can code within Ethereum.” It’s this aspect that makes Ethereum currencies so attractive to companies across diverse industries.

Okay, so cryptocurrencies are designed to facilitate various types of online transactions. So why are they worth so much (on a good day)? Simply, it’s speculation: The same way you can buy and sell other stocks or commodities, you can buy coinage to either hold as it accrues value, or trade on the short-term to try and turn a quick profit. As the utility of a coin rises so too does its value, but as is the case with other commodities, a perception of greater or lesser value can cause wild fluctuations in the market.

Enough already! How do I get me some Bitcoin?

As with any investment, do not risk more money than you are willing to lose. You wouldn’t pour your life savings into a single company’s stock; don’t risk your life savings on digital currencies. That said, if you’re still curious to try out crypto investing, here’s how you do it.

Coinbase, while by no means the decentralized platform Nakamoto originally envisioned, is probably the easiest way for the average person to use U.S. dollars to buy Bitcoin, Ethereum, and two of the other largest coins at the moment: Bitcoin Cash and Litecoin. You can connect credit cards or bank accounts and purchase these coins, and they are stored for you by Coinbase. Bitcoin transactions always take longer than Ethereum-based transactions, and bank transactions take longer than card transactions (but have a higher limit), but these are limitations in the code and financial industries respectively, not Coinbase.


  • Coinbase takes a percentage of each transaction, up to 4 percent depending on payment type.
  • The reported coin value is an average and will be different than the price at which you can functionally buy/sell coinage at any given moment, sometimes by as much as 9 percent.
  • Purchases can sometimes take more than a week to be available in your account.


  • If you use your friend’s registration link you will both receive a bonus of $10 USD in Bitcoin.

If you’re worried about your holding your investments on the exchange itself, D’Agostino isn’t. “From what I’ve read and people I’ve talked to, they’re best-in-breed when it comes to security,” he says. “If you were to trust a place, they’re not a bad option.”

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Coinbase is quick and dirty, but for the newbie it’s by far the easiest option.

GDAX, though appearing more complex, is actually just the coin exchange that powers Coinbase. It’s not nearly as beginner-friendly, but offers far more in the way of functionality, allowing you to buy/sell only at certain prices or when there will be no fees attached. Alternative exchanges include Bittrex (well-rated, though currently closed to new users), Binance, and Gemini.


  • Really not suitable for first-timers.
  • You must add USD funds to your account before you can purchase coins.


  • You can use easily transfer coins from your Coinbase account for free.
  • You can buy any of the thousand-plus altcoins.
  • Purchases are immediately available in your account.

Bitwise might be worth considering only if you have a lot of money to throw around but no interest in or ability to manage it yourself. Billed as the world’s first managed index fund for cryptocurrencies, the HOLD 10 Private Index Fund does all of the work of rebalancing your digital investments for you, and claims to routinely outperform both the S&P 500 and Bitcoin on its own.


  • Takes a 2.5 percent annual “management” fee
  • Currently has a minimum investment of $25,000. (Patty Schmidt, an associate investor relations representative for Bitwise says this was actually raised from $10,000 after the company was unable to handle the initial influx of investors. She added that the intention would be to lower the threshold going forward.)


  • Requires zero understanding, storage, or upkeep.

Robinhood is also preparing to dip its toes in the water, but will not be operational in New York for some time.

Wallets, lastly, are what you’ll want if you amass considerable coinage. Since this “money” is all digital, it is only as secure as the computer safeguarding it. Exchanges like Coinbase are sufficient for most users, but as a central location they are vulnerable the way the blockchain itself is not. (Remember the “Mt. Gox hack” a few years ago?)

You can store the private keys to digital wallets yourself on either a “hot” (i.e. network-connected) computer or a “cold” one (no network connection). Companies like Trezor and Ledger offer USB-based hardware dongles that store your keys for you, for just about $100 each. The safest option, while extreme, is also the most amusingly low-tech: print out a QR code of your key and store it as a “paper wallet.”

Congratulations! You now know enough to functionally buy and sell digital currency! Stay tuned for our next foray into cryptographic currencies, when we’ll speak to an anonymous expert who teaches us how to choose which coins we want to invest in.

Read More: He Calls Himself ‘The Wolf Of Westchester’ — and Wants to Teach You to Master the Crypto Market

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