In order to purchase a Bitcoin (or more), the user needs to go to a Bitcoin exchange that deals in their own fiat tender (real currency). A popular one is Coinbase which has an excellent track record as it has exchanged over $20 billion (£15 billion) worth of cash into Bitcoins, with support in 32 countries.
In order to perform a purchase on the Coinbase exchange, first you must set up an account. This requires some basic information to be supplied: a name, email, password and location (to make sure your particular location is supported). You also need to be 18 years of age or older.
Once the account is created, the next step is to link it with a bank account. When selling Bitcoin on Coinbase, the proceeds can either go to this bank account, or to a PayPal account. Purchases can be made from the linked bank account, or with Mastercard or Visa credit cards.
Users then decide how much Bitcoin they would like to purchase. Initially, Coinbase imposes a limit of purchasing $1,000 (£750) worth of Bitcoin per day; when you’re fully verified this limit increases to $50,000 (£37,000) daily.
The value of Bitcoin is shown in US dollars. Once a purchase has been agreed, the user will transfer the Bitcoin to their digital wallet to keep the funds secure in what is called a ‘cold storage’ wallet. This is an important step as if it’s not taken, and the exchange goes out of business or has financial difficulty, the user will lose their funds.