HOW TO BUY BITCOIN
Coinbase makes it easy to convert your local currency into and out of bitcoin. On this page, you’ll learn how to buy bitcoin and store it securely in a wallet.
Before you acquire bitcoins, though, you’ll need somewhere to access them. That’s where a bitcoin wallet comes in.
FINDING THE BEST BITCOIN WALLET FOR YOU
A bitcoin is not actually a tangible “coin,” and they’re not something that can technically be stored. So, fittingly, a bitcoin wallet is not an actual wallet, something you can keep your bitcoins in and then attach to your jeans with a bitcoin wallet chain.
What is a bitcoin wallet? Essentially, it is a public key and a private key, each of which makes buying and selling bitcoins possible. Because it is basically just a series of keys, there are a wide variety of bitcoin wallet types with varying levels of security. All of them have their pros and cons.
ONLINE & MOBILE WALLETS
The most convenient ones for casual bitcoin buyers are online wallets and mobile wallets. These allow for quick and easy access to bitcoin, but also puts your money in the hands of a third party and storing it in a cloud-based system. The best online wallets are fairly secure, but stay cautious regardless.
Coinbase is arguably the most popular bitcoin wallet, period. An online wallet with a mobile app, it’s seen as the most convenient because it is also directly connected to a bitcoin exchange, simplifying the buying and selling processes (This is also true of another popular wallet, Blockchain.info). Coinbase also offers offline storage for added security.
These and other online wallets have mobile apps as well, but there are also many wallets designed specifically for smartphones. While this means you can access your bitcoins anywhere you go, if your phone gets hacked, those coins are in danger of being lost to you forever.
Still, mobile apps are convenient, and the more successful ones have their own ways of working to secure your information. Airbitz (client-side encryption) and Mycelium (open protocol) are two particularly successful mobile wallets that have focused on security.
HOW TO BUY BITCOINS WITH A CREDIT/DEBIT CARD
Once you have your wallet, you have someplace for your bitcoins to actually go to. Being able to connect your credit or debit card to your wallet is a convenient way to get it done quickly. But it may well depend on what bank and card you use to determine if you can do it.
Coinbase accepts Visa and Mastercard, but not American Express. And even those two aren’t a guarantee – J.P. Morgan Chase, Bank of America, and Citigroup recently announced that they would no longer allow for the purchase of cryptocurrencies with their credit cards (though Bank of America says this doesn’t affect their debit cards). Discover hasn’t let their cardholders buy bitcoin in years. Make sure to check that you’re able to use your card at all first before you waste your time.
You’ll also need to figure out with bitcoin exchange you’ll want to use to make the purchase. If you’re using Coinbase as your wallet, this is already solved for you since they have their own exchange, but others exist as well. These exchanges differ in the fees you pay them for the transaction, the countries they are available in, and the limit of how much you can buy in a single transaction.
We’ll use two different exchanges as examples, starting with Coinbase. Their website claims to support 32 countries, and the charges a 3.99% fee. The steps to buying bitcoin with Coinbase using your card are:
- Sign up for an account on the website. This will involve uploading proof of identification and verify your credit card information.
- Once you’ve logged on, click “Buy/Sell” at the top of the page. Click “Buy” and specify “Bitcoin.”
- Type in the amount of money you want to spend. The built-in calculator will tell you how many bitcoins that is.
- Click “Buy Bitcoin Instantly.” Confirm that your payment info and amount is correct and click “Confirm Buy.”
When doing this, you can also click the “Repeat this buy” option and determine how often you want to repeat this purchase.
Coinmama is a popular exchange that allows for credit and debit cards as well. It allows for larger purchases, but the 6% fee is pretty steep. The steps to buy bitcoin with Coinmama using your card are:
- Create an account and then fill out your personal information.
- Click “Buy Bitcoins,” select the amount you wish to purchase, and click “Credit/Debit Card” for your method of payment.
- Enter your bitcoin wallet address, which is a version of your public key.
- Enter payment information, including billing info.
- Verify your identification – this includes verifying your phone number and email, as well as uploading a form of ID.
- Receive your confirmation email after everything has been verified.
HOW TO BUY BITCOINS WITH PAYPAL
Whereas a lot of banks have always been wary of bitcoin, PayPal worked on integrating it into its payment system Braintree as early as 2014. The company isn’t as high on the cryptocurrency as it was back then, but there are still ways to buy bitcoins with PayPal. Not as many as there used to be, though, as Coinbase recently stopped accepting PayPal as it attempts to create its own e-commerce platform.
Strangely, one of the most well-known ways to buy bitcoins with PayPal isn’t via a bitcoin exchange – it’s via VirWoX, the virtual world exchange used to acquire currency for the famous online virtual world Second Life. You can transfer your currency to SLL (Second Life Lindens) and then transfer those to bitcoins. It’s a roundabout way to do it, but it seems fairly consistent – a rarity in cryptocurrency. The steps to buying bitcoin with VirWoX using PayPal are:
- Create an account and fill out the necessary info.
- Activate your account via email confirmation and immediately change your password; the one they give you is temporary.
- Under “My Account” on the left side, click “Deposit.” Scroll to the “PayPal Express Checkout” section, input how much you want to deposit, and click “Check out with PayPal.”
- With your account funded, find the “Exchange” section on the left side and click “USD/SLL,” or whichever currency you used. Input how many of your funds you want converted and exchange it for SLL.
- Click “BTC/SLL” under “Exchange,” and input how much BTC you want under the “Exchange SLL to BTC” section.
- Once they’ve been converted to BTC, click “Withdraw” under “My Account.” Input how much BTC you want to withdraw and bitcoin wallet address to send them to.
It’s hard to find actual bitcoin exchanges that allow PayPal usage. There are, though, websites like Local Bitcoins where you can find sellers, discuss terms with them, and trade your money for bitcoins. Be warned, though: in doing this you’re putting trust in a complete stranger who could easily scam you. Stay vigilant.
HOW TO BUY BITCOINS WITH CASH
Those in search of a secure way to purchase bitcoins will be glad to know you can get them with nothing but cold hard cash. You may need to go out of your way to do it, but sometimes we do complicated things to ensure security.
If you’re in the right place, you may be able to use a bitcoin ATM. Coin ATM Radar has a map of bitcoin ATMs all over the world. Large clusters of them are in major U.S. cities – New York, Philadelphia, Chicago, Los Angeles, Atlanta, and Miami. There are several different brands of ATMs with differing methods of verifying your ID and bitcoin address, but the general steps to using them are:
- Press “Buy bitcoins.”
- Verify your identification. This can be, for example, a confirmation code sent to your phone.
- Provide bitcoin address via scanning your wallet’s QR code.
- Input cash.
- Print receipt after everything is confirmed.
The aforementioned Local Bitcoins also lets you use cash, as connecting buyer and seller allows you to potentially meet them in person and pay them directly in cash. In addition, there are sites like Bitquick and Paxful, which connect buyer and seller in a way where the seller provides bank details that let the buyer make a cash deposit at the bank. Keep the receipt to provide proof, and the seller can send you the bitcoins. But again: stay vigilant.
Once you’ve used any of these methods, what you do with your new bitcoins is up to you. Some want to spend them, but others look to turn them into a long-term investment.