How do I buy bitcoins?

Bitcoin has established itself as a currency for the future, as an evolutionary way to buy, sell and trade worldwide. With companies such as Target, Virgin Galactic, Amazon, Ebay, Victoria’s Secret and even my local pizzeria now accepting Bitcoin as payment, it is becoming very clear that Bitcoin is here for good. Now all that’s left to do is to get some for yourself.

how do i buy bitcoinsBitcoins can be purchased directly from another person selling them, from Bitcoin exchanges, even from Bitcoin ATM’s.

You can pay for Bitcoin in several different ways. Including cold hard cash, bank deposits and online transfers, credit/debit cards, alternative cryptocurrencies, even money orders and personal cheques. It is important to understand though that not all these options have the same merits. How you pay for your Bitcoin affects not only the speed and security of the transaction, but also how anonymous you remain.

Your options of payment are also limited not only by the service through which you are making your purchase but also by the country in which you reside.

This article will clear up the many ways in which you, and people in different reaches of the globe, can safely purchase Bitcoin.

First step: Get a Bitcoin Wallet

Before you can purchase even the tiniest amount of Bitcoin, you will first need somewhere to store it.

There are various types of Bitcoin Wallets on offer, from online based web-wallets to downloadable software wallets. The purpose of all Bitcoin wallets is to provide a secure place to store, send, and receive your Bitcoin. We provide more detail on the various types of wallets on our Bitcoin Wallets page.

A Bitcoin wallet acts as your own personal bitcoin bank. It has an address that you can share with others so they may send you Bitcoin and, in turn, allows you to send bitcoin from your wallet to any desired bitcoin address.

A trusted online wallet that we recommend is Blockchain. Bitcoin wallets through Blockchain are quick and easy to set up, secure, simple to use, and are available on Android and iOS platforms. This is not a sales pitch by the way, it’s also free.

Once you’ve set up your wallet and got some bitcoins into that bad boy, you can then instantly transfer funds to places like online casinos, sportsbooks, vendors on the Silk Road, one of the growing number of businesses that are accepting Bitcoin for their services, or any other person in the bitcoin network.

Opening a bitcoin wallet is extremely simple and you don’t need any identification (you do have the option of providing an email, in case you forget your wallet log-in).

Buying bitcoins via an exchange

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Accepts all countries
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Accepts all countries
Multiple payment methods
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USA only
Multiple payment methods
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Bitcoin exchanges are places you can go to that allow you to trade regular fiat currencies (be it AUD, USD etc..) for bitcoins, and visa-versa.

Many online Bitcoin exchanges act as both an exchange and wallet combination. What this means is that if you, being a first time buyer of bitcoin, decide to purchase your bitcoin from one of these services you will be able to easily purchase, store, and trade your Bitcoin in the one place. If you plan on being a regular trader in Bitcoin this is a huge advantage, eliminating the need to constantly transfer back and forth from an outside wallet to the exchange/wallet you use.

A possible downfall of these regulated exchanges is the loss of anonymity. Signing up to a regulated exchange requires you to be identified by supplying personal details such as your full name, email, DOB, and country of residence. Choosing to use your credit/debit card to purchase through these exchanges also links your purchased bitcoin directly to you.

Again, your options with bitcoin exchanges are limited by what country you live in and it is always recommended that you research which exchange is best suited to you personally (assuming your country of residence allows the trading of Bitcoin).

If staying anonymous isn’t a priority for you then a bitcoin exchange will suit you perfectly. They are very easy to use and, being regulated, are trustworthy and secure. If you do plan on aquiring Bitcoin, you could leave this page right now, sign up to a bitcoin exchange, and have your very own bitcoins in your bitcoin wallet in no time.

Once you have acquired Bitcoin there are also exchanges that deal solely with trading cryptocurrency, such as Bitcoin or Litecoin, directly for other cryptocurrencies (see shapeshift.io).

Funding your Bitcoin Wallet with cash

There are a few different ways to fund you wallet with directly with cash, all of them offering the chance to remain totally anonymous.

Cash Deposit

The first is cash deposits directly into a seller’s bank account. There are websites, like localbitcoins.com, that once you (anonymously) sign up to allow you to directly contact people looking to buy or sell Bitcoin. The seller will display how much bitcoin they have for sale, at what rate they are selling it for, and also a preferred method of sale. In this case you are looking for the ‘cash deposit’ method. This involves you contacting the seller via the site with how much you would like to purchase. The seller then provides you with bank details and a unique code. All that’s left to do is walk into the bank branch, deposit the money along with the unique code into the provided bank account, and once that has cleared, you will have your bitcoin.

Localbitcoins.com also provides you security by holding your purchased bitcoin in an escrow account, meaning that the seller can’t just receive your money and then just decide not to transfer the bitcoin.

Face-to-Face

Another way to purchase Bitcoin with cash is the classic face-to-face transaction. This is pretty much what you expect it to be. You meet up with the bitcoin seller in person and trade cash for bitcoins. Obviously you need to have access to your Bitcoin wallet when you’re making the transaction, so you will need a phone with an internet connection or have WiFi available to conclude the transaction.

You must always keep in mind that you will be carrying potentially large amounts of cash on you. To avoid any unfortunate events be very careful and always conduct these transactions in public places.

Bitcoin Meet-Ups

A bitcoin meet up is pretty much a face-to-face purchase or sale, but in a group setting. There are sites, like meetup.com, that you can visit to see if there are any meet-ups near you. The advantage of purchasing bitcoin this way is the added security of having an organised group of people all there for the same thing. It obviously compromises your anonymity a bit, but that may not be an issue for you personally.

Bitcoin ATM’s

While Bitcoin ATM’s are not yet widely accessible, a lot of major cities in Bitcoin friendly countries do have them and they are very simple to use. Basically you put your cash or card into the ATM machine. You then either enter you bitcoin wallet’s details or scan your QR code to then fund your wallet with your chosen amount. This is an extremely efficient way to deposit bitcoins into your wallet.

Some bitcoin ATM’s will also allow you to sell bitcoin. This means that if you have zero cash on you but you have your mobile wallet, you can sell bitcoin your bitcoin to the ATM and it will instantly give you cash.

Prepaid Bitcoin Cards

They are apparently coming. While they don’t exist at the moment there have been reports that the technology is under development. How exactly they will work we don’t know. But it’s nice to think that it will work on the same concept as buying a uKash card: walk into a store, and then walk out with your funded card.

Bitcoin Mining

If spending money isn’t really your thing, there are ways to acquire bitcoins for ‘free’. Bitcoin mining is the process of validating bitcoin transactions, and a successful bitcoin miner is paid in freshly created bitcoin. The process of mining however requires tremendous amounts of computing power…hence the quotation marks around the word free. You might spend thousands on energy bills running your mining software before you even land you’re first bitcoin reward, assuming you ever do. You can read more on Bitcoin mining on our What is Bitcoin? page.