As Bitcoin entered the mainstream, the doors to buying and selling the cryptocurrency were flung wide open by the increasing number of businesses launched to allow Bitcoin trading. Nowadays, buyers or sellers no longer need to step outside of the house to buy or sell their crypto-coins as they can easily do so within minutes from the comfort of their homes.
Indeed, there are a number of places you can go to buy Bitcoin nowadays, be it online or offline. However, if this is your first time trading the cryptocurrency, you might want to spend some time to review your options before you decide what works best for you. To help you with this, here’s an easy guide to the different ways of buying Bitcoin today.
Different Payment Methods You Can Use
Choosing the best marketplace to buy Bitcoins from will depend mostly on how you want to pay for your cryptocurrency. Do you prefer cash or credit card? Do you mind uploading your personal documents to get verified or do you prefer that no one knows when you buy or sell Bitcoins? Answering these questions will help you establish a better starting point from which you can pinpoint the best option.
Buying with Cash
If you prefer using cash and leaving as little information about your purchase as you can, there are two main options you can use: A) buy from a Peer to Peer exchange; and B) buy from an ATM. Both options have their advantages and disadvantages, the main pro being that you’ll enjoy more privacy but often for higher fees.
Another way you can pay for your Bitcoins is through PayPal, although your options will be more limited. Namely, the only way you can use PayPal to pay directly is through Peer to Peer exchanges like Paxful or Local Bitcoins. You can also use PayPal to indirectly fund your purchases through virtual debit cards or by buying other accepted cryptocurrencies like Linden Dollars and swapping them for Bitcoin.
If you’re interested in buying Bitcoin with PayPal, you can find more information on the different ways to do this in our guide to buying Bitcoin with PayPal.
Credit and Debit Card
A common way of paying for Bitcoin, debit and credit cards can mostly be found at Bitcoin exchanges. You can also use credit cards or debit cards at Peer to Peer exchanges, but only if you find a user that accepts such payments. Also, keep in mind that not every Bitcoin exchange will accept cards, so you will first have to do some research before finding a suitable marketplace.
E-Wallets and Gift Cards
Bitcoin can also be bought by using online e-wallets or by trading your Amazon and iTunes gift cards for small amounts of the cryptocurrency. Gift cards and e-wallets are mostly accepted by Peer to Peer exchanges, as long as there is a seller willing to take this form of payment.
You can also buy Bitcoin by using a bank transfer, which is the most common method for depositing and withdrawing at Bitcoin exchanges. However, if you want to use a bank transfer, be prepared to go through an ID verification process before you are allowed to do so since most exchanges now ask for verifications as part of their AML (Anti Money Laundering) and KYC (Know Your Customer) policies.
And last but not least, you can also trade in any cryptocurrency you have for other cryptocurrencies like Bitcoin. The best place to do so would be through a cryptocurrency exchange that accepts the currency you own. Trading in cryptocurrencies can often be done without identity verification, although you will likely be asked to get verified if you want to sell your coins back for fiat money (Euros, Dollars, etc).
Different Places to Buy Bitcoin
Thanks to Bitcoin’s popularity, you now have many different places from where you can buy your Bitcoins. Your choice between the various options you have at your disposal will depend on what convenience you want to have as a buyer.
Bitcoin exchanges are the number one buying point for many Bitcoin traders because they can provide users with benefits that other marketplaces can’t. There are dozens of Bitcoin exchanges available today, and most of them offer a wide range of cryptocurrencies for you to buy and trade as well as various payment methods you can use to invest and withdraw.
But before you use a Bitcoin exchange, it’s important that you understand how they work, i.e. what are the different ways you can buy or sell Bitcoins through these marketplaces. If you need more help with this, refer to our guide on Bitcoin exchanges.
Peer to Peer Marketplaces
Peer to Peer exchanges like Local Bitcoins or Paxful will give you the option to either find a seller that takes cash and arrange a meeting in person, or pay for your Bitcoin through cash deposits, bank transfers, gift cards, and credit cards, among other options. Each registered seller will have a different list of payment methods s/he accepts and different requirements for selling their Bitcoins to you.
ATMs can only be used to buy Bitcoins with cash. Most ATMs only require a phone number verification to allow you a purchase. Their biggest disadvantage is that they can be hard to find and would often cost more than buying at a Bitcoin exchange. Also, before you use an ATM, you will first need to install a Bitcoin wallet app on your phone so that you can transfer your coins after you buy.
Buying from other people was a very common way of getting Bitcoins back in the early days of the cryptocurrency. To buy this way, you can either find someone you know that owns or mines Bitcoin to sell you some or use a service like a Peer to Peer exchange to find a seller willing to sell in-person.
When buying from other people, it’s crucial that you have a clear understanding of how Bitcoin transactions work so that you won’t put yourself at risk of being scammed. Also, make sure that you always agree on a price beforehand and that you execute transactions only in public places.