betchain free spins
Advertisement

how to buy bitcoin

Buying Bitcoin is probably the most popular way of acquiring this revolutionary digital asset nowadays. After the mining boom brought the ASIC miners to the market and the faucets started giving less coins out, only people who get paid in Bitcoin and those who buy Bitcoin directly, can acquire the coveted asset without incurring in major investments. Fortunately for those who still get paid in fiat, buying Bitcoin has become easier as the digital asset keeps on gaining traction.

There are various services and exchanges that offer to sell Bitcoin for fiat funds. Among the most popular are the Bitcoin ATMs and the big exchanges like Coinbase, Gemini and Cubits. There are also local exchanges like Bitso in Mexico and even P2P platforms like the famous LocalBitcoins.com. Each has advantages and disadvantages that we will explore to help you understand how to buy Bitcoin.

Buy Bitcoin at an Exchange

Probably the easiest way to buy Bitcoin is at an exchange that offers fiat deposits. These exchanges however have some limitations. Since they deal with fiat funds, they must be regulated so they respond to local legal requirements. Therefore, users seeking to buy Bitcoin at one of these exchanges must be ready to face the following:

  • KYC requirements, which include submitting a scanned copy or a clear picture of a utility bill, a passport and an updated picture of the user.
  • Geographic restrictions – Due to legal constraints, some exchanges will not be able to offer their services to people from specific countries.

The convenience of buying Bitcoin at an exchange comes at the cost of being identified and having the coins you purchase tied to that KYC process. Nevertheless, they are safe – as long as you use well-established exchanges – and fees are generally low.

Recommended Exchanges

binance

Binance

Website

hitbtc exchange

HitBTC

Website

spectorcoin exchange

SpectorCoin

Website

Our guide to using CEX online exchange

LocalBitcoins.com

To avoid some of the KYC hassle, you can use the most famous P2P Bitcoin exchange platform there is: LocalBitcoins. The platform simply matches buyers and sellers locally. Sellers are rated, and users can pick who to buy from according to their reputation. There are still some risks involved with P2P purchases but since most of the fiat transactions to buy Bitcoin through LocalBitcoins involve a bank transfer, it is relatively safe. The draw back is that the bank transaction will be recorded, with the bank knowing the details of the seller and in many cases also those of the buyer.

The advantage is that the financial institution doesn’t necessarily know that the transaction involved the exchange of Bitcoin for fiat. Fees are also relatively low and Bitcoin prices respond to local demand and supply factors, giving sellers and buyers an opportunity for price arbitrage.

Going Completely Anonymous with a Bitcoin ATM

If anonymity is paramount, then buying Bitcoin through an ATM – or BTM – is probably the best solution. Just wear your polarized sunglasses, put a hat on and head right over to the nearest BTM to make your transaction. The fees are generally high, ranging from 4% to even 15% or higher in some cases, but that is the price you pay for remaining anonymous.

Bitcoin ATMs vary according to the country and city you are in. After all, there are several Bitcoin ATM manufacturers and some are more popular than others in certain places, but they are easy to find online nonetheless and they are quite reliable. Just remember that if anonymity is important to you, you should hide behind a VPN and a safe browser – not Chrome! – when you are looking for the nearest Bitcoin ATM.

Buying Bitcoin with a Credit Card

There are other ways to buy Bitcoin. One of the most widely sought out avenues to buy Bitcoin involves the use of a credit card. There are sites that offer this service, but they are not very prominent, and in many cases their reputation is dubious. Although many people look to buy Bitcoin with a credit card because it is convenient or because they want to buy Bitcoin using debt to then sell at a profit, pay their credit cards off and keep the difference, due to the nature of Bitcoin a credit card purchase is a huge risk for the seller.

Credit cards allow for charge backs, while Bitcoin transactions have no such mechanism. This means that in theory, a person can buy Bitcoin with a credit card and ask for a charge back once they get their Bitcoin. Therefore, the sites that allow people to buy Bitcoin with a credit card and are trustworthy, also charge the highest fees in the market.

P2P Purchases

If you are looking to buy Bitcoin, you can also buy it face to face from someone you know or from someone that is close to your circle of friends and acquaintances. This is probably the best way to buy and sell Bitcoin if you trust the person you are buying from, because it will involve a cash transaction. Nevertheless, buying Bitcoin from strangers with cash can be dangerous, so make sure you can trust the person you are meeting at the café down the street before you decide to buy Bitcoin from them.

Another way to make a P2P transaction to buy Bitcoin is through PayPal. Although we must wan that buying Bitcoin with PayPal is strictly against the rules of the payment platform. Users have managed to get away with it by transacting small amounts and declaring them as gifts. If PayPal somehow discovers that a user has been using his or her account to buy or sell cryptocurrency, they will probably freeze or close it down, so if you use PayPal regularly, risking your account to buy Bitcoin might not be a good idea. Other e-wallet services like Venmo can also be used to buy Bitcoin P2P but they might be subject to similar policy restrictions.

Ask your Financial Adviser About Bitcoin Futures!

If you want to avoid all the risks mentioned above and you feel like you can trust a financial institution to keep your precious Bitcoin for you, you can buy Bitcoin futures on the CME and CBOE. To do this you must consult with your financial advisor and forget about actually holding the coins you buy in your own wallet. Fees vary depending on the financial institution you want to deal with.

Steven Gleiser

Analyst and Content Manager at Bitcoin Chaser. Steven has been an avid consumer of any kind of information related to bitcoin, blockchain technology and cryptocurrencies since 2013.

More Posts

Pin It on Pinterest