How to Create Bitcoin Account in 2023?

Technically speaking, there is no such thing as a Bitcoin account. Users interact with the Bitcoin network through a special type of software called a Bitcoin wallet. A Bitcoin wallet allows you to view your cryptocurrency holdings, receive BTC coins and authorize transactions. You do not need to provide any personal information whatsoever in order to use Bitcoin. 

If you’re wondering how to create a Bitcoin account, you’re perhaps trying to learn how you can get started with buying Bitcoin. In this case, you will have to create an account on a cryptocurrency exchange. We also recommend that you set up a Bitcoin wallet to secure your BTC coins.

Creating a Bitcoin account – everything you need to know

When people say “Bitcoin account”, they usually refer to one of two things. They are either talking about a Bitcoin wallet, or a cryptocurrency exchange account that can be used to buy and sell Bitcoin.

Bitcoin wallets allow you to send and receive Bitcoin

A Bitcoin wallet is a software tool that manages the private keys that are required to authorize a Bitcoin transaction. You can install a Bitcoin wallet on your desktop computer or use a Bitcoin wallet app on your smartphone.

When you set up a Bitcoin wallet, it will generate private keys as well as your public addresses, which are derived from your private keys through a special cryptographic function. 

You will also receive a recovery phrase, usually consisting of 12 words, that you can use to get access to your Bitcoin at any time, even if you uninstall your wallet software or lose your device. It’s extremely important not to share your recovery phrase or private keys with anyone.

When you’re sending BTC, what’s actually happening is that your wallet app is using your private keys to “sign” the transaction.

Unlike a bank account, a Bitcoin wallet is not tied to you as a person. You can create as many Bitcoin wallets as you like, and you don’t need to disclose your name or any other personal information in order to send and receive BTC. 

However, if someone else gets access to your private keys, they will be able to steal your BTC and you won’t be able to do much about it. In Bitcoin, there are no such things as chargebacks, as BTC transactions cannot be reversed.

If you plan to hold a significant amount of Bitcoin, we recommend that you purchase a hardware cryptocurrency wallet. A hardware wallet will greatly increase the security of your BTC coins for a relatively low price — you can get a high-quality Ledger Nano S wallet for less than $100.

The Ledger Nano S Plus hardware wallet.

If you just plan to invest a small amount into Bitcoin, a software wallet will suffice. Here are some of the best software Bitcoin wallets that you can use:

Bitcoin exchanges allow you to buy and sell BTC with fiat currency

A cryptocurrency exchange is a platform where you can buy and sell cryptocurrency using your local fiat currency (for example the US dollar or the euro) or trade between different cryptocurrencies at current market prices. In most cases, you will need to provide some personal information to the exchange before you’re allowed to buy Bitcoin on it. 

Depending on the exchange you use, you will have different options for buying Bitcoin. Some of the most common options include bank transfers, credit card purchases, or online payment systems such as PayPal.  

One of the most important factors to consider when choosing a cryptocurrency exchange is your location. Some exchanges only operate in specific markets, and don’t accept customers from certain countries. For example, customers from the United States cannot use the Binance cryptocurrency exchange.

Here are some of the best cryptocurrency exchanges that you can use to buy Bitcoin in 2023:

How to setup a Bitcoin account?

If you don’t own any Bitcoin yet but would like to get started, our step-by-step guide will show you what you need to do:

1. Choose the cryptocurrency exchange you will use to buy Bitcoin
2. Fund your account with your preferred payment method and buy Bitcoin
3. Create your own Bitcoin wallet and withdraw your BTC to it (optional)

1. Choose the exchange where you will buy Bitcoin

The first step is to choose which cryptocurrency exchange you will use to buy Bitcoin. Our list of the best cryptocurrency exchanges is a great starting point to find high-quality exchanges. If you don’t own any Bitcoin yet, you will want to use a centralized cryptocurrency exchange, as decentralized exchanges don’t accept fiat currencies like USD and EUR.

If you’re not an advanced trader and you would just like to buy some Bitcoin, here is what you should be prioritizing when choosing an exchange:

• The exchange should have a good track record on security
• The exchange should accept the payment method you want to use
• The exchange should accept customers from the country you reside in

If you’re just getting started, you don’t need to pay special attention to trading fees and advanced features such as futures trading.

2. Buy Bitcoin

After you deposit some funds to your cryptocurrency exchange account, you can use it to buy Bitcoin. If you’re buying Bitcoin with a credit or debit card, you won’t need to make a separate deposit transaction.

Depending on the exchange, they might offer a simplified cryptocurrency buying feature. If they don’t, use the exchange’s spot marketplace to find the suitable trading pair. For example, if you have deposited EUR to your bank account, you need to find the BTC/EUR trading pair. 

After you find the correct trading pair, you can use a market order or a limit order to buy Bitcoin. If you just want to buy some Bitcoin and don’t have an opinion on whether it’s currently undervalued or overvalued, we recommend you use a market order as it’s the simplest way to buy BTC.

Market order

A market order will execute at the best available market price. When using a market order on Bitstamp, you specify how much crypto you want to buy. For example, you can submit a market order for 0.1 BTC and the exchange will execute the order at the best available prices. While  you can sometimes get better prices by using a market order, the downside is that you can’t be exactly sure how much of your fiat currency will be spent as the order is executed. 

Limit order

A limit order lets you set the price at which you want to make your purchase. For example, let’s say that you want to buy 0.1 BTC and Bitcoin is currently trading at $30,000, but you think that you can get it at a more favorable price. You can submit a limit order for 0.1 BTC at a price of $28,000. When the price of Bitcoin reaches $28,000 or below, the exchange will automatically go through its order book and buy 0.1 BTC for you.

A limit order will never execute above the price that you specified. The downside of a limit order is that it could take a long time before the price reaches your desired level, so you cannot be sure when your purchase will actually be completed.

3. Create your own Bitcoin wallet and withdraw BTC from the exchange (optional)

After you buy Bitcoin on an exchange, we recommend that you create your own Bitcoin wallet. We provide a full guide on how to secure your cryptocurrency.

It’s important to understand that when you have Bitcoin in your exchange account, the BTC coins are actually controlled by the exchange and not by you. This is because the coins are held in a wallet owned by the exchange.

However, you can create your own Bitcoin wallet and transfer coins from the exchange to it. This will ensure that you have full control over your BTC coins, so long as you keep your private keys and recovery phrase safe. A good wallet to start off with is Trust Wallet.

After you create your wallet, it will display the address you can use to receive Bitcoin. A Bitcoin address is a long string of numbers and letters that looks something like this (please note that we are using this address as an example, don’t send any BTC to it): 

1A1zP1eP5QGefi2DMPTfTL5SLmv7DivfNa 

Then, you can withdraw coins from your exchange wallet to your Bitcoin address. We recommend that you start with a test transaction for a very small amount of BTC, just to ensure that everything is working as expected. If the test transaction is successful, you can proceed to transfer the full amount.

As we’ve said before, we recommend that you purchase a hardware wallet if you plan to invest an amount into Bitcoin that is significant to you.

The bottom line

Hopefully, this article helped answer all the questions you might have had about how to open a Bitcoin account. Most importantly, you need to understand that the term “Bitcoin account” is a bit misleading, as it’s unclear whether it refers to a Bitcoin wallet or a cryptocurrency exchange account that can be used to buy and sell Bitcoin.

If you want to learn everything you need to know about buying Bitcoin, make sure to check out our ultimate guide to investing in cryptocurrency.