After you’ve set up your wallet with a payment method, you'll need a place to actually buy bitcoin. Users can buy bitcoin and other cryptocurrencies from online marketplaces called “exchanges,” similar to the platforms that traders use to buy stock. Exchanges connect you directly to the bitcoin marketplace, where you can exchange traditional currencies for bitcoin.

In order to conduct transactions on the bitcoin network, participants need to run a program called a “wallet.” Bitcoin is not technically “coins,” so it only seems right that a bitcoin wallet would not actually be a wallet. Bitcoin balances are maintained using public and private “keys,” which are long strings of numbers and letters linked through the mathematical encryption algorithm used to create them.