How Can You Buy bitcoin?
The entire concept of bitcoin – the most well-known crytpocurrency – is still fresh and exciting, prompting a growing demographic of people to invest.
This is hardly surprising, given that we live in a time when trust in banks and governments continues to dwindle. The prospect of having access to funds in a decentralised system, which you can spend or store without paying the high fees associated with traditional currencies, holds immense attraction.
bitcoin certainly is appealing, but actually getting some to spend, invest, or simply store in the first place can be daunting. You may be interested in trying to mine bitcoins, but this can be time-consuming and complex, functioning more as a puzzle game that rewards anyone smart (or fast) enough to solve the block chains.
Buying bitcoins instead of mining them is a simpler alternative, but how can you actually do this right now?
If you want to buy bitcoins, you’ll need somewhere to store them first. This is what bitcoin wallets are designed for: these programs are able to process the strings of encoded figures and characters representing bitcoins and identify their value, using a bitcoin Uniform Resource Identifier (URI).
When you come into possession of a bitcoin, you’re basically getting an address to a digital file; this is a unique single block existing inside the bitcoin blockchain (which serves as an ongoing ledger recording every bitcoin transaction performed online). You have two kinds of bitcoin wallet to choose from: software wallets and web wallets.
Software wallets can be downloaded directly to your mobile device or your desktop computer, and many bitcoin users regard these as the more secure wallet. Why? Because these utilise private key passwords you need to enter whenever you wish to receive or send bitcoin.
Web wallets, on the other hand, are also known as ‘hosted’ wallets, and are maintained by third-party operators. You will access your web wallet through your browser (Chrome, Internet Explorer etc.), and their performance is similar to other payment gateways like PayPal.
Anyone using a web wallet for bitcoin will have to trust the specific site’s security protocols to keep your cyrptocurrency safe, so take the time to research your preferred option. Coinbase, Gemini and Bitstamp are just theree of the more popular web wallets. Once you have your wallet set up, you can start purchasing bitcoins. You can see a list of best bitcoin wallets here.
The value of bitcoins varies (as with any currency), but as they’re always divisible, you will always be able to buy an even amount’s worth. Perhaps you would prefer to spend £10 or £20 on your first bitcoins, or more – whatever the amount, there are no limitations.
First, though, you need a broker. You will be giving them your real money, and they will send bitcoins to the respective amount in exchange. Brokers will vary on specific areas of their service: exchange rates, payment methods accepted, fees, and other key elements will be different from one to the other.
Invest time into researching the most popular brokers that might work for your budget and expectations. For exampe, bitcoin users might prefer to make payments for their crytocurrency via credit card as these tend to be processed faster, but the charges associated with them could be larger at one site than another.
Just two of the more popular bitcoin brokers include Plus 500 and Markets.com, though there are plenty available. You can see a list of best bitcoin brokers here.
A bitcoin exchange works in the same way as a traditional currency exchange, connecting individuals looking to sell or buy bitcoins.
There are a number of different exchange platforms to choose from, catering to users preferring to convert specific currencies into bitcoins, using credit cards, bank transfers, and more. Some are more impressive and reliable than others, so as with your wallet and broker, be sure to weigh up your options clearly.
Exchanges on today’s bitcoin market include Bit4Coin, Bitalo, CoinMama, ExpressCoin, and others. There are exchanges catering to specific countries and regions, as well as international bitcoin buyers. Argentina, Australia, Canada, Costa Rica, China, Chile, Japan, Nepal, and Peru has exchanges for native bitcoin users.
Another way to buy bitcoins is to sell goods or services online and accept bitcoin as a payment method. If you run your own business, produce your own items for sale, or provide services, you can start taking payment through bitcoin to add funds to your wallet, without having to buy through an exchange or using a broker.
When you have taken payments, your payment processor will ‘settle’ your bitcoin, converting it into your currency of choice (be that USD, GBP, Euros, etc.). You can use a daily settlement scheme to withdraw bitcoins as ‘real’ money, either to spend or to protect yourself against any potential drops in bitcoins’ value.
However, while this makes sense if you have a business or want to keep a steady cash flow, others are looking to invest in it as a commodity. bitcoin’s worth has changed dramatically in recent years, both rising and falling, so keeping it stored in your bitcoin wallet could well lead to it growing in value. If this is embraced as an investment rather than your main banking option, you should keep a close watch on the value of bitcoin over time.
Various bitcoin payment processors (such as BitPay) give you the freedom to perform as many as 30 different bitcoin transactions each day (provided you stay below £1000) without facing any extra charges. You may be able to put an integrated business plan into effect, with just a 1% charge applied to every transaction you make through the platform.
Other bitcoin-friendly payment processors will have their own perks or drawbacks. Over time, accepting payments in bitcoin can help you build up the amount you have in your wallet, either instead of, or alongside, your purchased bitcoins. Buying bitcoin for the first time may be a confusing, possibly overwhelming, process, but you can make it easier on yourself by following the tips explored above.