Thanks to Bitcoin’s wide-spread acceptance you now have dozens of places from where you can get your Bitcoins. Finding the most suitable option will depend on several important factors like whether you want to buy anonymously or whether you mind paying higher fees, and more. To help you choose your best source, here’s an easy guide to the most common buying options today.
Buying Bitcoin through a Bitcoin Exchange
Bitcoin exchanges are one of the most common ways people buy Bitcoins. Buying through a Bitcoin exchange can be quite easier than arranging a buy in person, although the process does have its shortcomings as well. But if you want to have the option to buy other cryptocurrencies to diversify your portfolio, they are the most practical solution.
Bitcoin exchanges are basically places that link buyers and sellers together and execute placed orders. To buy Bitcoin, you first place an order for a specific amount of Bitcoin that you will fund via your account balance. The exchange then automatically finds a seller and handles the transaction between your accounts for a certain fee.
Buying in a Bitcoin exchange involves registering and going through an identity verification process before you are allowed to deposit fiat (regular) money into your account. You can also buy Bitcoin without registration if you have other cryptocurrencies to trade in for BTC. Most exchanges allow you to use multiple currencies and buy/sell a variety of cryptocurrencies.
Buying Bitcoins through Other People (Peer-to-Peer)
One of the common ways people got Bitcoin way before it became so popular was through in-person transactions with someone who mined the cryptocurrency or simply invested in it. There are now online services like Local Bitcoins or Bit Quick that let you connect with Bitcoin owners in your area and arrange an exchange of Bitcoins for cash under fees and rules determined by the seller.
There are two ways in which you can buy Bitcoin peer-to-peer. The first is to place an order and receive the seller’s banking info. The service will then automatically put the specified amount into escrow. You will then have to submit a payment and upload the receipt to the service to confirm your payment. Once confirmed, your Bitcoins will be released from the escrow and you can transfer them to your wallet.
Another way to buy Bitcoin through these services is by arranging a meeting where you’ll pay in cash and get your Bitcoins transferred to you by the seller. However, it’s better if you only do this if you know exactly how to protect yourself from scams.
Buying Bitcoins in Stores and ATMs
There are also services like LibertyX which allow you to buy your Bitcoins through designated stores or ATMs and pay for them anonymously with cash. Thus, whether you can use such a service or not will depend mostly on your geographical location, i.e. whether the service network covers the area you reside in.
To buy Bitcoin from stores, you will first have to get your own Bitcoin wallet and find a store location near you. The payment is done offline by using a PIN or a special code you’ve received when registering for the service. Once the payment is confirmed, you can then use the same code to receive your Bitcoins and transfer them to your wallet.
ATM purchases, on the other hand, can be done in a similar fashion to paying bills through an ATM. You just enter the amount you want to buy and then enter your cash through the machine to pay for your transaction. You will then be asked either to scan your wallet address with the ATM’s scanner to get your Bitcoins or you will be given a paper wallet address you can use to transfer the cryptocurrency.
Buying Bitcoin with Gift Cards
Another way you can get your hands on a small amount of Bitcoin is by exchanging gift cards from Amazon, iTunes, or Steam. This is a suitable solution for those that want to get smalls sums of the cryptocurrency fast and without going through the usual identity verification process required when using personal credit cards or bank accounts.
Buying With Cash vs. Buying in Exchanges
There are Bitcoin users that only use Bitcoin exchanges to buy and sell their crypto-coins and there are also others that exclusively buy through other people. Most users may fall in-between both worlds while leaning over to one side they find more convenient for their needs. Thus, what option you’ll choose will mostly depend on what you need as a buyer and how knowledgeable you are when it comes to buying.
Why Buy with Cash?
Buying in person with cash has a number of advantages, the most important being the protection of your privacy and the buying speed. Using Bitcoin peer-to-peer services to buy with cash can also protect your money as most services now have an escrow function, and in most cases, you won’t even need to have a bank account to make a payment, which is yet another advantage.
However, if you prefer to arrange a buy in-person, you should also understand the risks of doing so. Being scammed by not knowing how the buying process should work or getting assaulted or charged hefty sums for your privacy is always a risk. That’s why it’s always good to arm yourself with information, arrange meetings only in public places, and agree upon fees beforehand.
Why Buy in an Exchange?
One of the benefits of an exchange is that the whole buying process can be simpler, especially when exchanging other cryptocurrencies for Bitcoin. Bitcoin exchanges can also offer lower fees, more funding options, as well as more advanced protection since they make considerable investments in online security.
On the other hand, the identity verification process can be a problem for some people who don’t want their purchases being recorded. Also, if an exchange is experiencing problems with liquidity or a problem with their banks this can cause delays in payouts and problems for users who want to sell their Bitcoins back for fiat money.