How to Buy Bitcoins
Ever since this form of virtual currency debuted in 2009, legions of Internet faithful have been wondering how to buy bitcoins. While early users have no doubt arrived at the answer on their own, this article is mean to serve as a guide for those who are new to the Bitcoin phenomenon.
Buying from a Bitcoin Exchange
A Bitcoin exchange is a virtual location where customers can buy and sell units of currency. Those who want to make a purchase place a “buy” order, while those who wish to unload bitcoins issue a “sell” order. The goal of the exchange is to match up customers from both groups, thereby allowing a smooth and secure transfer of funds. This type of service is known as a “market exchange,” but other sites exist strictly to sell coins directly to their customers.
Buyers put up some form of accepted currency such as Euros, Japanese Yen, or U.S. Dollars. Their money is then transferred to the seller, and in return they receive the equivalent value in bitcoins. It’s that simple.
If you’re ready to get your (virtual) hands on some bitcoins, you’ll first need to open an account with an exchange. Different exchanges require varying forms of identification, and this can range from a copy of a utility bill to a photographic scan of your driver’s license or passport.
You’ll also need to choose the type of exchange that best meets your financial needs. These include the following:
- Fixed Exchanges – These services offer bitcoins for a fixed price, which means the value of the currency does not fluctuate throughout the day. Examples of live exchanges include the following: Coinbase, Coinify , Quickbitcoin, 247exchange, Anycoin Direct, Bitin.io, BitSimple, Bittylicious, and SuperChange.
- Live Exchanges – This form of exchange is similar to the stock market in that the price of a commodity changes throughout the day to reflect fluctuations within the market. Some of the leading examples of this sort of exchange include the following: ANX, Bitcurex, itBit, Localbitcoins.com, Kraken, Bitstamp, BTC China, BTC-e, CleverCoin, and BitSource.
Before you buy from a seller or exchange, it’s always a good idea to do some research to ensure that they’re a reputable source. Bitcoin services are not subject to the same regulations as banks, so unethical operations can continue bilking customers long after their shady practices are discovered. If there’s any question about the reliability of an exchange, forget about it and look elsewhere.
Ways to Pay for Bitcoins
No matter what type of payment method you normally use, there’s a strong chance that some service is willing and able to convert it into bitcoins. To make your life easier, here are some of the leading options:
- Credit Card – Most services allow you to use a credit card to fund an account and subsequently purchase bitcoins. Leading exchanges that support this method include VirWox and Trucoin.
- Cash – The buyer physically hands hard currency to a seller in exchange for virtual coins. These face-to-face meeting are being made safer and more convenient by the creation of Bitcoin shops in various parts of the world.
- Bank Transfer – Move money out of your bank account and into an exchange that allows for the purchase of bitcoins. Coinbase is a notable example of this service.
- Money Order – The buyer mails a money order to a service. Upon receipt, the seller releases the appropriate number of bitcoins.
- Personal Check – The buyer mails a personal check to an exchange or independent seller. Once the check has cleared, the bitcoins are released.
- iDeal – Online payment method used in the Netherlands.
- MoneyGram – U.S. customers can use several services that make it possible to purchase bitcoins with a Western Union or MoneyGram account.
- Bitcoin ATM Machines – These machines debuted in 2013, allowing customer to walk up, insert their chosen form of payment, and then walk away with an equivalent number of bitcoins. Installations are located in Germany, Canada, Finland, Slovakia, Australia, and the United Kingdom, although the number of participating nations is expected to rise dramatically in the next decade.
As Bitcoin continues to attract more customers, expect the methods of purchase to increase exponentially. The existing options are sizable and relatively simplistic, but dedicated individuals are also slaving over keyboards in order to find even more ways to get this virtual currency into your hands (and digital wallet). The next time a friend or co-worker asks you how to buy bitcoins, you can tell them how easy it is while still keeping a clean conscience.