Bitcoin hit a record high above $8,200 on Monday, November 20. The surge follows a dismal September in which the cryptocurrency fell to $2,900 a coin on September 15.
Two years ago, the idea of buying the virtual currency even at that price was laughable. After a rapid rise in value in 2013, the cryptocurrency’s value more than halved by mid-2015.
At its lowest point, one bitcoin was equal to about $230.
Given the currency’s covert nature, the average person still may not understand how buying and selling actually works.
Using the app Coinbase, which lets anyone trade bitcoins for a small fee, we decided to find out.
A brief warning: If you’re going to do this, tell your bank you’re about to buy bitcoin. More on that later.
Get the latest Bitcoin price here.>>
When you first open the app, you're presented with the latest price of bitcoin and its change within a certain period. You can see in the chart below how wild the latest moves have been. (We bought the bitcoin in January 2017.)
I happen to be one of the many who have never traded bitcoin before. There's a certain level of wariness in buying into the cryptocurrency world.
However, Coinbase's interface makes it simple to enter the basic personal information it needs to create your account.
User-friendliness quickly hit a snag. When I put in my address, the app didn't recognize I had already selected it from the autofill menu. I couldn't proceed unless I switched to the desktop app.
The final step before entering my financial information was two-step verification for security, which Coinbase quickly sent to my phone.
Entering all my information was just as straightforward as everything else. The problem was that I couldn't exit this screen. Neither the 'buy' nor 'not now' option registered. I had to press the X and start all over.
Ultimately, and frustratingly, it was back to the desktop. So far, the actual process of buying bitcoin was simple — the app itself was my only nemesis. My $50 ended up buying 0.0524 of one bitcoin.
Oh. It appeared the price was falling pretty fast the morning I decided to buy. I went back to try again, doing my best to outrun the falling price.
I own bitcoin! Well, a small fraction of a bitcoin. But now this means I could sit on my hypothetical tiny pile of cryptocurrency and hope it amasses value.
Instead, I decide to sell off immediately. (But not before shedding a single tear for the 12 cents I've already had to part with.)
To sell the bitcoin, Coinbase only allows users to pair their bank account with the app; a credit or debit card won't suffice.
And we're back to the desktop. When I tried to sell the bitcoin, the app told me either the amount was invalid or I couldn't pay with the given method. I didn't understand what that meant and didn't want to enter a wrong number.
Luckily, the online experience is much smoother. My bank account showed up right where it should have, and I sold the bitcoin just like I bought it.
Since Coinbase wasn't linked to my bank account, the transaction needs a few days to process before the money is transferred.
A small hiccup: When I went to sell the bitcoin, I had to estimate the amount. The numbers were inconsistent in certain places depending on the bitcoin value or the dollar value. I ended up with one penny left over.
When I tried to close the account, that penny proved to be an issue. As much as I tried to send the lone cent with addresses I found around the internet, Coinbase didn't let me. Here's to hoping bitcoin skyrockets and my investment quadruples in value.
Oh, and a final thing: When I tried to buy lunch after all this, my card got declined. My bank had blocked the card after the initial purchase.
Apparently, I wasn't the only one who was wary about going into all this.