How To Purchase Bitcoin
So, you’re looking to purchase bitcoin? Before we go any further be certain that you do your research on what Bitcoin and Altcoins are. This area is highly risky and you should be careful when making any purchases of any kind. You earned your money, take care of it.
We are The Coin Boys and we do a podcast that talks about Crypto Currencies and Tokens, which we have a passion for. Also it’s important to know we are not professional financial advisers or computer tech specialists. We’re just your average everyday crypto bros but we have a lot of experience in working and using this tech and want to pass information that we have learned in this new, unknown space, to people like us. People who want to be apart of this change. So once again, read the first paragraph.
The good news is, anywhere you are in the world, you can get Bitcoin! (China Excluded, but…. that’s kind of the norm) The bad news is, it’s not extremely simple to get. Since we’re here in America we will be focusing specifically on American places, but there will be links for those not in the States to find places and websites you can go to.
We will be going from what we feel are the easiest methods, then to what we feel are the hardest ways to obtain Bitcoin, plus go through the positives and negatives of each.
Purchase Bitcoin by using an Exchange
An Exchange is a place where people literally exchange one type of currency for another. Very similar to Forex if you’re familiar with that.
There are several different types of exchanges, so be careful not to be confused. Some exchanges accept payment through your bank, and others only allow Bitcoin (which is useless to you because you have none yet, but you’re still going want to know about them).
Coinbase is by far the most popular exchange for people to get Bitcoin through your bank account, followed very closely by Gemini. We have used both and so far have no legitimate complaints that are unique to either service, just complaints on things all exchanges do.
Both of these exchanges want to verify your identity using both a picture ID and your social security. So if you are weary about doing that, then this may not be the way you want to go about getting your Bitcoin. Since Bitcoin can is Psuedo-anonymous, that seems to be a nice draw for some, and there are ways we will discuss later to buy some using cash.
Once you are verified you can link your bank account or debit card to either exchange and begin to purchase bitcoin.
Beware, there are many different types of orders, like Stop Entries, Stop Limits, Market, etc. If you are not a professional trader and you just want to buy your coin at that moment, you are going to want MARKET. It will just sell you Bitcoin at the current rate it’s going for. This price changes like crazy! You are going to have to come to grips with the fact that if you had waited just a minute or 2 you may have been able to buy more Bitcoin for less. Otherwise you will drive yourself crazy trying to find the perfect price and constantly checking the price of Bitcoin.
For now this is a great and easy way to start because not only can you purchase Bitcoin here but you can purchase other Altcoins like Ethereum, Litecoin, and Bitcoin Cash. With that being said, you are probably here because you want Bitcoin, so be very careful which one you select to buy from any of these places. Bitcoin Cash is not the same as Bitcoin in terms of value. The technology behind both coins is still up for debate, and you can read all about it here soon. If it has the word CASH next to it… that is not the Bitcoin you want.
In addition to that you also get a fairly secure wallet to store your coins, for the moment. If you remember in our “What is Bitcoin” article we said Bitcoin and most other cryptocurrencies are very secure, but the exchanges that you buy them from are not. So be sure to move your Crypto (Slang for Cryptocurrency, which you should get used to now because that is what will be said from time to time) to a Wallet.
The wallet is a whole other subject which you can read about. Just to clarify a wallet is not what you have in your purse or pocket right now. It is pretty complicated and you probably should not purchase any crypto until you know how to use the wallet that supports it.
Using this method to purchase bitcoin is also a bit slow sometimes. For Gemini it takes about 5 days to clear any Cash (or Fiat as it’s called) deposit you make to the exchange. So you will not be able to use your Bitcoin or remove it for a few days. Not good for those wanting to play with your new tech right away.
Keep in mind that while Crypto is anonymous, your accounts on Coinbase, Gemini, or any other exchange where you are required to use personal information is definitely tracking you to some extent for tax purposes. So with that said you have to beware of taxes involved with your purchase. Consult a pro for that because there is still a lot of confusion there.
Bitcoin.org which is the official site for anything Bitcoin related, has a list for those who are not in America and want to purchase Bitcoin. The process and headaches should be very similar to what we said here. Just be sure to find out if you need to set up your own Wallet initially or not.
One big warning about these and any other exchange out there! At any moment they will just stop working for a while, and it is usually when Bitcoin loses value. So if you are trying to sell it before the price drops, it may not work as you are hoping. Although I’m sure you are buying this to Hodl… right? Well if you are more financially responsible than most Hodlers, then just be aware this will happen
Another type of Exchange out there is one that only accepts Crypto as a deposit. The nice thing about this is it gives you access to other currencies and tokens that you can’t access anywhere else. Poloniex, and Binance are the two that are talked about the most, but your country will have others. Be sure to look them up.
For all the exchanges they charge different types of fees depending on what you’re trying to withdraw. Watch out because that 50 cent transaction could cost you 5 bucks.
Purchase Bitcoin through a Bitcoin ATM
In more recent times there have been an influx of Bitcoin ATMs, especially in major cities. These “ATMs” will take your cash and put the Bitcoin in to any wallet you choose, and some will give you a paper wallet right there. For security purposes, using your own wallet that you are familiar with is best. Every ATM is different, and not all take cash. So double check before making your way to the closest one.
This is great because it remains anonymous, but awful for price. They will sell you Bitcoin at a much higher rate than the other exchanges. I have seen as much as 30% more but it could be worse. The other problem with this method is if you are in a small city, an ATM is not easy to access.
Purchase Bitcoin from a Friend
The final method would be person to person. Know someone who has some Bitcoin already? Ask if you can purchase a small amount from them at an agreed upon rate. This will absolutely require you to understand how to use a Wallet, so be sure to do that. The benefit here is you should have someone you trust there helping you. Meeting a stranger is not recommended by us. Too many people have been robbed doing this.
Now that you have purchased some Bitcoin you’re going to want to do one of a few things with it. So I recommend learning where to store your Bitcoin, and if you still haven’t learned what they are look into Altcoins.
If you made it this far thanks so much for reading, but remember we also have our podcast as well! So please feel free to give a listen and review us on Itunes or Soundcloud, as well as follow us on Twitter and Instagram. If you are feeling extra brave, give us a call and leave a message. We would love to play you on our podcast. Finally once you have learned how to use Bitcoin or any crypto we are a self run site so feel free to donate to any of our wallets. We always appreciate it and will use it to improve our site and our content!