Introducing “Bitcoin Basics”, a new weekly column answering some of the common questions the world has about Bitcoins. Teaming up with Ofir Beigel of 99Bitcoins and Coin Llama, Bitcoin Basics will be answering common questions such as how and where to buy bitcoins, who or what is Satoshi Nakamoto , the difference between a Bitcoin wallet and address, and much more.
So let’s start with Bitcoins and how to buy them:
For beginners, buying bitcoins can seem a bit intimidating, especially since it’s so technical. The following guide provides a simple overview of all the different methods available to buy Bitcoins depending on where you live and your payment method.
Paypal / Skrill
Besides Bitcoin PayPal may be the best online payment system around. Unfortunately, no exchanges currently allow users to use PayPal to buy Bitcoins. If Paypal is still your only option, you will have to use VirVox to buy Second Life Linden Dollars -AKA “Lindens”- which in turn can exchange on VirVox for Bitcoins.
Like PayPal, you can also use Skrill, another online payment system, to facilitate the purchase of “Lindens” through Virvox. Both Skrill and Paypal make it difficult to purchase bitcoins because they have high fraud protection measures. Keep in mind that using the method mentioned above will usually have the highest transaction fees than all other available methods and can sometimes reach 10%!
Credit Card
For purchasing Bitcoins with a credit card more and more options are popping up lately. The most recent one is Circle – a US based startup that allows you to buy Bitcoins with an international credit card or by linking to a bank account. In “invite only” mode for a while, they have recently opened up their site to the greater public.. Other US only websites are Coinbase, Trucoin and Coin.mx. However, as charge backs exist with credit cards, exchanges accepting them today to fund accounts often require additional customer confirmations and identification before allowing users to buy Bitcoins with credit cards.
If you live outside the USA you can also head to CoinMama and purchase Bitcoins directly with your credit card. MeetPays allows you to buy Bitcoins with a credit card as well. UK citizens can you Bittylicious.
Keep in mind that most sites that will sell you Bitcoins with a credit card will usually charge a premium fee and require some form of verification.
Wire Transfer (international / SEPA)
If the only option you have left is a wire transfer then Coinbase will be your best option if you live inside the US. Coinbase, a well-funded venture backed company is probably the most popular Bitcoin broker today. You can buy up to $100 worth of Bitcoins instantly if you link your credit card to your account as well.
If you live outside of the United States there are several other exchanges, such as BTC-E, Kraken, Bitfinex and BitStamp. Almost all of these exchanges will require some sort of verification of identity before you can start buying large amounts of Bitcoins, but if you’re only looking to spend a few hundred dollars then usually you will be able to get started right away. Keep in mind that money transfer is the slowest method possible to buy Bitcoins today but it also has the least amount of fees.
Despite the word “exchange” in the website’s name these website aren’t supervised by any financial regulations. Meaning they can easily go out of businesses just like what happened to Mt.Gox. But you can always withdraw your bitcoins to your own bitcoin wallet as soon as you buy them. (More on bitcoin wallets).
Unbanked consumers
Expresscoin offers a Bitcoin buying service for unbanked consumers – currently in the US only. You’re able to pay with money orders, personal checks and wire transfers.
Cash for Bitcoins
If you prefer buying Bitcoins face to face using cash then you can check out LocalBitcoins or use the marketplace on the Mycellium App. Both products connect buyers and sellers who live in the same geographical area and helps facilitate the exchange.
Another option would be to find a Bitcoin ATM located next to where you live and just exchange cash for Bitcoins through the ATM. Here’s a list of ATMs wordwide.
One last thing…
Finally, in order to compare all of these methods you can use CoinLiama. CoinLlama allows you to quickly and easily compare prices from a wide range of websites with just a few clicks of the button. It's always a good idea to make sure you are getting the best price, so make sure you do your due diligence!
