Well, this time, we are going to talk about the most favoured cryptocurrency in the world today. I know you had guessed it: Bitcoin. So let us know how to buy bitcoin.
Different ways to buy bitcoin
So how do we buy bitcoins? These are the ways:
- Credit/ Debit card
- Cryptocurrency exchange
- Other altcoins
- Through peer to peer
Credit card from direct seller company
Ok, so you know that we can buy or purchase bitcoin with just credit cards (Not through cryptocurrency exchanges). This process takes only a few minutes but there are fees. It is very costly method to do, as the charges is very high. You can buy bitcoin through various platform like Paybis, Coinmama, Simplex among many others. Most will charge up to 6%. Coinmama charges up to 6%, which is very high.
Coinbase charge 3.99% each time you buy the coins with credit card. It is known that now there is an increase in the charges by Coinbase. It may be easy to buy but come at a cost unfortunately. For others, you can buy bitcoin through Luno, or other crypto exchanges like Binance which charge very low fees. You need to have a bitcoin wallet to store the bitcoins. If you register with cryptocurrency exchange, they will provide you with cryptocurrency wallets.
Binance is a hugely popular cryptocurrency exchange where not just you can buy bitcoin, as well as many types of cryptocurrencies from a few main buying pairs beside bitcoin, such as binance coin (BNB), ethereum (ETH) and xrp coin (XRP). It is the no.1 cryptocurrency exchange for trading volume at more than 650 millions every day.
You can use US dollars, euros or pounds to purchase bitcoin. Trading fees is at 0.6% which is considered low. If buying cryptocurrencies like bitcoin with credit card, it is about 3.5% or $10 whichever is higher.
Gemini is a cryptocurrency exchange that you can trust out there. Buying of bitcoin is quite similar to Binance. You can use USD to buy bitcoin or ethereum. You can also use wire-transfer also. It is available in most US states as well as globally in UK, Canada, Hong Kong, South Korea and Singapore. Trading fees is 1% for light traders (less than 5 BTC over last 30 days), 0.1% for takers and 0% for for makers (2000 BTC over last 30 days)
Bitstamp is an easy to use platform to buy bitcoin. One thing they claim is being the first fully licensed bitcoin exchage. You will need identity verify to buy bitcoin. They use Euro purchase fees of 5- 8%, the exact percentage depending on the amount of fiat use to buy the bitcoin.
Luno is a cryptocurrency exchange from UK which only accept trading in bitcoin and ethereum. They undergo regular independent technology and financial audits. However, US traders are unable to buy from this cryptocurrency exchange. Trading fees are around 0.25%. Withdrawal fees is about 0.0002 BTC from this exchange which considered below average rate.
CEX.io is another you can try also. Though not in the same league as Coinbase and Binance, it do have over 2 million active traders. It was established since many years ago (from 2013) and have high level of security and great liquidity.
At least 99% of the countries in the world is supported by CEX.io. It is competitive with 3.9% charge on credit or debit card deposit fees. When selling bitcoin to your credit or debit card, it is 2.9% fees, which is a special feature for CEX.io as many exchanges do not allow you to sell back onto your credit card.
Bitpanda is gaining popularity because of it’s extremely competitive rates and fees. However, they only sell cryptocurrencies to people in Europe. User interface is good, and you need to register for ID to buy bitcoin and others. At moment, Bitpanda charge 2.99% fees on purchase and 1.29% fees on sell. If it is for external payment provider, 1.5%- 3.6% fees is charged depending on the payment method.
If you are new to cryptocurrency exchanges, registering is a pain. Most will need all sort of verifications and the final acceptance can take up to 3 days.
The above are just a few of the cryptocurrency exchanges among up to hundreds of exchanges that allow buying of cryptocurrencies. There are others like Bitmex, Kraken, Bitfinex, Huobi and so on. It is require to have diligent research to find those that are trustworthy ones.
*Please note that buying bitcoin in cryptocurrency require you to register with them through a lengthly process. General procedures (may be more) to register with cryptocurrency is:
- Sign up for account
- Confirm your account
- Setting up 2FA
- Add a bank account
- Get verified
- Fund your account
- Start trading/buying coins
The durable sometimes can be 3 workings or more. Logging into the exchange for trading and buying of bitcoins and buying other cryptocurrencies normally requires various types of verification in ensure you are the legitimate user.
Another way is to buy through other altcoins. Like Tether (which is pegged to USD). Also Ethereum and many others. This normally you will find in crypto exchanges. There are numerous crypto exchanges out there. Bitstamp is one of those.
Through peer to peer
Oh, lastly, you can buy bitcoin peer to peer (P2P exchanges/ platform). It is “decentralised” platform but is not fascinating. You may wonder why do people do that. Well, this is to cut away any processes fees, which is very high on other form of platforms.
There is still a bit of fees to pay on certain P2P platforms but it range from 0-0.7% only. Buyer/seller post advertisements looking for trading partners (or simply someone who accepts their advertisement) which is how they make transaction.
These P2P platforms normally acts as an escrow which locks the digital asset so that the funds is inaccessible to either party. So it works by after buyer send the fiat payment, the digital assets will be unlocked and release to buyer. This will ensure that the seller can’t receive the fiat payment and then not send the crypto. Basically, it match people with these orders with a software and without a “middle man” such as cryptocurrency exchanges.
Localbitcoins is an extremely popular P2P cryptocurrency trading platform which had the highest volume of trading. You can meet up with people in your local area to buy/sell bitcoins in cash. The commission from seller is only 1% who set their own trading rates.
Bitsquare is another P2P platform that does not require registration or reliance on central authority.
Paxful is a relative new comer. Paxful helps to connect buyers and sellers to easily exchange bitcoins, accepting more than 300 payment methods.
For more visual understanding of how to buy cryptocurrencies (well, not just bitcoin), the below video is a must watch if you want to know the precaution to buy them. With so much scams around, the video states the important ways to take for better security: