So this is a bad week to write a "how I bought my first bitcoin" post, timing-wise, but here we are.
Backstory: bitcoin had been climbing all November, and by the time it crossed $1,000 on some exchanges everybody and their uncle was talking about it. I ignored it for weeks because the whole thing felt like a fad, the kind of thing that gets covered on the news between segments about fruitcake and mall parking. But curiosity won out, mostly because a guy I used to work with back in 2011 told me he'd mined a few hundred coins on his gaming GPU "just to see what would happen" and then forgot about them. I do not want to know what those are worth right now. I genuinely do not.
So I signed up for Coinbase, since it's US-based and lets you link a bank account instead of wiring money to some exchange in Japan (looking at you, Mt. Gox). The signup itself took maybe ten minutes. The verification took four days. You link your checking account, they push two tiny deposits, you come back and confirm the amounts, and then you wait for the "pending" ACH transfer to actually clear, which apparently in 2013 still takes the same amount of time it took in 1994. I complained about this out loud to nobody in my apartment more than once.
Once the funds finally landed I bought 0.05 BTC for $978.53, including Coinbase's cut. I remember the exact number because I stared at that confirmation screen for a solid minute deciding if I'd made a mistake. That was Tuesday. On Thursday the People's Bank of China put out a notice barring Chinese banks and third-party payment companies from touching bitcoin transactions, and the price fell off a cliff, something like 30 percent in less than a day on some exchanges. So my little experiment is currently worth quite a bit less than what I paid for it, four days in. Great start.
Anyway, since a few people have asked me about this on Twitter, here's the actual practical rundown, crash notwithstanding:
Getting an exchange account set up. Coinbase, Bitstamp, and a couple others will let you buy directly with a bank transfer. Skip anything that only takes wire transfers unless you really know what you're doing. Expect a multi-day wait for verification and another few days for the transfer to clear before you can buy anything. This is not a same-day hobby.
Don't leave your coins sitting on the exchange. This is the part nobody tells you up front. The exchange holds your private keys unless you move the coins to a wallet you control, and after the whole Mt. Gox situation earlier this year I don't especially trust any exchange to be a permanent home for money. Coinbase has a built-in wallet, which is fine for a small amount, but if you're putting in real money, look at something like a paper wallet or an offline wallet generator instead.
Understand what a private key actually is. It's the thing that proves the coins are yours. Lose it, lose the coins, forever, no customer service line to call. Write it down. Do not put it in a text file called "wallet key.txt" on a laptop that also has your browser autofill your Amazon password. I'm only saying this because I definitely did that for about six hours before feeling stupid and fixing it.
Expect the price to do something insane while you're mid-transaction. This is apparently just how it works now. Between the time you decide to buy and the time your money actually clears, the price can move 10 or 15 percent in either direction, and there's nothing you can do about it.
I'm not going to pretend I have some grand takeaway here. It's fifty bucks worth of curiosity, more or less, and if the Chinese government finishes killing the price this week I'll have learned an expensive lesson about reading regulatory news before buying anything digital and speculative. If it recovers, I'll be insufferable about it for approximately one blog post. We'll see which one happens first.