One of the most common questions when people are new to the blockchain and cryptocurrency scene is “How do I buy Bitcoin“? Depending on your needs, there are a variety of ways to acquire blockchain tokens.
If you already have a bank account at a traditional institution, this may be one of the easiest ways to buy and sell. You can send a wire transfer directly to an exchange, buy with cash locally, use Paypal, a credit or debit card, and swap cryptocurrency. Or instead of buying, you can even work for, and earn bitcoin and ethereum. The market is offering more and more creative ways to turn fiat currency into crypto, with one site even offering to trade gifts cards in for bitcoin.
You may not even have to get off your couch! In this guide we show you various ways to get your hands on cryptocurrency. Continue reading below about your different options for acquiring crypto-tokens. And if you’re not a reader, then we got a quick video with the top four ways to buy too!
Before you buy
The most important thing you should do before you purchase bitcoin or any other cryptocurrency is to make sure you have a wallet set up to store your tokens. Wallets range in security as you can read in our guide here, with the most secure being a hardware wallet.
A Quick Note: If you do not have a wallet and keep your cryptocurrency holdings on exchange, technically the exchange is holding the crypto not you, so you are not only trusting a third party, but exchanges are much more susceptible to hacks, and can change the rules at any time for withdrawals.
Step 1: Buying cryptocurrency
There are many different options for attaining cryptocurrencies. Below we will go through some of those options, and highlight important details to note on each way of buying, as well as resources we’ve linked to for doing so to help get you started!
Option 1: Buy Bitcoin at Cryptocurrency with Cash
Need to get cryptocurrency in a hurry? Using a local Bitcoin ATM might be just the service you need! These machines are just like norm ATMs at the bank, but they also work with cryptocurrency.
Most accept paper cash and will send you a digital token in exchange. Some will even allow you to sell Bitcoin for local currency. How svelte!
Coin ATM Radar has a comprehensive listing and map of all sorts of ATMS across the globe. Availability can still be scarce in rural regions, so your best chance to find a Bitcoin ATM is in big cities.
PROS: Quick and straightforward. No need to spend time setting up an account on an exchange or website.
CONS: Limited locations, higher prices and transaction fees.
If there are no cryptocurrency ATMs around your local area, you might have better luck finding someone to meet up with in person.
Typically, it is easy to meet someone in a coffee shop and exchange funds in a safe environment. But just standing on the street corner yelling “SELL ME BITCOINS!” probably won’t get you very far — although if you try this out, we’d be eager to here how it worked out for you… ?
It’s likely better to use LocalBitcoins.com, a long-standing reputable service which helps people find each other. You can also trade with friends and family locally. You might be surprised who is in your circle of friends that can help you out!
This can be especially helpful when traveling internationally or in areas that you cannot easily access other crypto services.
PROS: Purchase anywhere, easily in your local currency or with various payment methods. Do so with more privacy than a bank transfer. Plus, it’s an opportunity to connect with other crypto enthusiasts.
CONS: More expensive than market exchanges, and you have to use more caution to avoid scams.
Option 2: Bank Transfers – cryptocurrency exchanges
Coinbase is the most popular service to buy and sell cryptocurrency like Bitcoin, Ethereum, and Litecoin. Available in dozens of countries and across the United States (excluding Hawaii, Wyoming, and Minnesota), Coinbase has continuously operated since the early days of Bitcoin – June of 2012 to be specific. While Coinbase is an easy-to-use consumer service, there are limits on how much can be bought at once, and it may take several days to verify your identity, connect your bank account, and complete your first purchase. Recently, Coinbase introduced instant purchase of up to $25,000 in Bitcoin, Ethereum and Litecoin for anyone with a U.S. bank account.
Another option is to use a more traditional exchange. If you have experience trading in the other commodity or stock markets, the advanced interface and ability to trade more frequently will likely benefit you. Reputation and reliability during peak times can vary, sometimes freezing up services completely. Some popular cryptocurrency exchanges are linked below (keep scrolling).
There are a variety of cryptocurrency exchanges, some of which allow traditional fiat currencies to be deposited/withdrawn. High-volume exchanges are suited if you need to change a large amount of tokens or require special functionality such as limit orders or margin trades. Some of the higher volume exchanges include Gdax, Gemini, Kraken, Bitstamp, and Poloniex. Some cryptocurrencies are more popular on certain exchanges than others. They also frequently have a difference in price, so it can pay to shop around and compare fees.
PROS: Fair market prices, with access to hundreds of cryptocurrencies. You have the flexibility to set limit buys and sells and use hedging, and the ability to watch market movement over time.
CONS: Time investment to sign up and go through ID verification process. Bank transfers can take up to a week. Exchanges may track how and where you spend your bitcoin, and they are susceptible to hacks (it’s better to store your crypto in a hardware wallet).
These exchanges only operate using cryptocurrencies, so you cannot begin using them without already owning some crypto. These are specifically for exchanging cryptocurrency to cryptocurrency.
Changing blockchain tokens
Once you’ve got Bitcoin, Ethereum, Litecoin, or any myriad of other options, it’s easy to change them for any other cryptocurrency token. Many exchange & trade services exist with varying degrees of complexity (see the BTC/Crypto to Crypto only exchanges above).
Easiest Token Exchange (for smaller amounts)
One of the nice things about cryptocurrency is that it’s very easy to trade or exchange them for other cryptocurrency–kind of like Pokemon! If you have Bitcoin, Ether, Dash, or some other digital coin, you can trade it for another with low frustration. ShapeShift and Changelly are service that help automate the process of converting tokens. Maybe you get paid in Ether but want to buy alpaca socks with Bitcoin – ShapeShift and Changelly are the fastest and easiest cryptocurrency exchanges. And the best part is that no complicated sign-up forms are required! Just supply your receiving address for the desired cryptocurrency and send them what you have. Wait a few minutes and your order should be fulfilled. ShapeShift and Changelly both have customer service teams that are fast and responsive.
PROS: Fast, easy, no complicated sign up processes.
CONS: Exchange rates are a bit more expensive than market value on a bigger exchange.
Option 3: With Card
Buying bitcoins with debit and credit card used to be very difficult. However, with more and more people wanting access and companies realizing the opportunity to sell, it is now becoming more widely available. Many exchanges are now offering this option, but there are some sites that focus more on selling cryptocurrency for cards. Here is a list of exchanges and sites that offer credit card purchases:
PROS: Instant purchase and does not require any technical know-how.
CONS: More expensive and highest fees in the space, limited amounts, limited privacy, and beware of fraudulent sites trying to collect your information.
Option 4: Paypal
This is probably one of the most difficult ways to purchase bitcoin at the moment due to the high risk of chargebacks for sellers. However, if you really want to use Paypal there are a few sites that offer this option.
PROS: Use unspent funds you’ve got sitting in your Paypal account, easy to keep track of your purchases.
CONS: More expensive with high transactional fees and exchange rates, requires multiple steps, not secure for sellers.
Option 5: Buy bitcoin with gift cards
One more site worth mentioning is Paxful. In addition to all of the options mentioned above like cash, bank transfer, Paypal and credit & debit cards, you can buy and sell bitcoin on Paxful for a huge variety of other means such as rewards points, air miles, and even gift cards.
Don’t have the money to invest in crypto? Maybe you have a useful skill you can offer to EARN some…
Option 6: Earn by working for cryptocurrency
If you are short on investment funds or looking for a way to earn bitcoin, ether and other crypto tokens, there are several ways to earn cryptocurrency. They range from activities that require an advanced level of technical know-how such as mining or trading, to more practical approaches like creating your own blockchain related business or freelancing. For more on how to earn cryptocurrency and platforms for freelancing opportunities, check out our section Make Money Using Blockchain.
This article was written by Taylor Gerring, with contributions made by Jessica Zartler.