Bitcoin is turning into the currency of the future, with growing demand, with more and more people trying to acquire it. There are a few ways to get yourself some bitcoin, along with the most popular one ‘mining’, but now I’m going to talk about how to buy bitcoin fast.
You can buy bitcoin via exchanges or through people who are selling them. There are a few options for payment: cash, with credit/debit card, wire transfers or even paying with another cryptocurrency. This would all depend on the conditions under which the trade is being made.
1: Buy Bitcoin via Exchanges
This might come as a surprise to you, but buying bitcoin is actually not as easy as it might seem at first. For example, a transaction made with your credit card or PayPal account can easily be reversed by calling the card company. When you’re trading with this type of digital currencies, where it’s very hard to prove that any goods have changed their owner, most of the traders avoid this payment method.
Despite what’s written above, the options for payment are significantly growing and many cryptocurrency exchanges are giving their customers the option to pay with cards. For the customers in the US who lack a bank account, Coinbase is there for you and they accept personal checks, money orders and wire transfers too.
Once you are ready to buy your first Bitcoin, you will need a bitcoin wallet to store it. The ‘wallet’ is actually a type of bank account for bitcoin. You can choose between a software wallet that is stored on your computer’s hard drive, or an online-based service to keep your bitcoin. Some disadvantages can be found in both of them. For example, if you store your bitcoin locally on your PC, you have to make sure that you have a fresh backup of your wallet somewhere if something happens to the drive. The online wallet, despite all the security against virtual intruders, can still be hacked.
The bitcoin popularity is obviously growing with the options for the business to expand to new markets. An example here is the exchanges, where you can at the same time trade fiat currencies and various types of cryptocurrencies. They are a great and very suitable option if you only want to do regular trading or speculation.
For this type of trade, you also shouldn’t be too fussy about hiding your identity and you should not mind the long bureaucratic procedures around the setup of your account. Once you have provided the platform with the desired information to prove your identity, everything should continue smoothly. These regulations are set in most countries and no exchange can even try to get around them, because each company has to meet the ‘anti-money laundering’ and ‘know your customer’ requirements. At this time, the largest bitcoin full-trading exchanges are in China, Great Britain and the United States.
Once you’ve set up your account in one of these exchanges, you would need to link it to an existing bank account, though some countries like Nigeria and India recently banned any form of crypto exchange to bank transactions. This is obligatory if you want to move funds from your exchange account to your bank account via wire transfer. This of course is followed by a certain fee, depending on the conditions you have agreed to. The procedure may also take longer than you have expected because the delays are much higher when you change bitcoin into fiat currency. Regardless of that, it is much better to transfer these funds to your bank account, rather than store them on you exchange profile, which can be hacked (something that does NOT necessarily happen all the time!).
There are also things you should have in mind when using exchanges, online wallets and banks. First, despite all the proof of identity and requirements that you meet, exchanges aren’t regulated the same way as banks are. Your account has no insurance in case the exchange gets hacked or goes out of business. Unfortunately, bitcoin has yet no legal status as a currency everywhere around the globe and if you happen to be a victim of a theft, the authorities wouldn’t always know how to approach the case. Some exchanges would restore the amount of bitcoin that has been stolen, but for now, they don’t have the legal obligation to do it.
I’ll extend the matter to the subject of theft occurring from your personal wallet. If you don’t thoroughly keep your password and mind the security of your profile, then there is no guaranteed way for you to gain back the funds that have been stolen from you. There is also certain discrimination on behalf of the banks towards the bitcoin and all other cryptocurrencies. Somehow, they don’t quite fit in their business model and they treat them as a threat. There have been cases of banks refusing transfers to specific exchanges or even closing the accounts of the people who mention bitcoin. So, make sure that the bank you are about to set up your account in is bitcoin-friendly.
2: Face-to-face or Over-the-counter (OTC) Trades
There are also face-to-face or ‘over-the-counter’ (OTC) trades. Some websites provide a platform where buyers and sellers can negotiate the price they want to trade their currencies and meet up face-to-face. This way you can avoid all the fuss around creating and verifying your online identity and finally getting back to business. But if you choose this type of trade, please make sure that you meet with the other person in an open and crowded place. You don’t want to be going to some stranger’s home carrying a lot of cash with you. Also, you would need to have access to your bitcoin wallet during the meeting. To confirm the transaction you would need to bring your smartphone, tablet or laptop, and also have good internet access.
2: Bitcoin ATM Trades
There is a relatively new concept trying to gain more popularity and that’s the bitcoin ATMs. The system there is similar to the face-to-face exchange, only that it happens with a machine on the opposite side. And this is how it works: you insert your cash and then scan your mobile wallet QR code or you can receive a paper with the codes that you need to load the bitcoin onto your bitcoin wallet. The exchange rates here are likely to vary from 3-8% over the standard exchange price.
There are plenty of options and platforms that you can use to buy bitcoin. It’s not as simple and easy as it may sound of course, but most of the websites are very user-friendly and provide you with detailed instructions regarding their use. There is always customer support that you should not forget about in case you feel in trouble or worry about the safety of your funds.