In the past few months, I have been asked on numerous occasions how to buy bitcoin by friends, readers of my blog, and even family member. Hence, I decided to write this short guide for beginners on how to buy bitcoin.
Probably the easiest way for individuals to purchase bitcoin is through the bitcoin exchange and wallet provider Coinbase. Coinbase allows users to purchase bitcoin as well as Ethereum’s ether and litecoin using bank transfers, credit cards, and debit cards. Bitcoin can be bought both through Coinbase’s easy-to-use web-based platform or directly on the smartphone app.
Simply sign up on Coinbase.com, fill out your details to pass the account verification stage and then purchase bitcoin using your bank card.
Coinbase is a regulated digital currency exchange and offers its services to customers in 32 countries. When you are first getting started with buying bitcoin, Coinbase is a great platform to get started.
Next to Coinbase, the most popular platform for buying and selling bitcoin is the peer-to-peer bitcoin exchange LocalBitcoins. As the exchange runs on a peer-to-peer model, which you means you buy bitcoin directly from another individual who wants to sell, it is one of the few exchanges that can be used in pretty much every corner of the world. Furthermore, on LocalBitcoin you can use a wide range of different payment methods to buy bitcoin including bank transfers, Amazon gift cards, PayPal, and in-person transactions, among many other.
To buy bitcoin using LocalBitcoins, you simply sign on LocalBitcoins.com and search through the offers for the payment options you are comfortable to use for your region. Then click on the advertised offer and put the amount of bitcoin you want to buy in. As the transaction processes your funds will be put into escrow, which acts as a security mechanism for buyers and sellers. Once the transaction has been agreed and processed the funds are released and you receive your bitcoins and your counterparty receives his or her money.
Another peer-to-peer platform for bitcoin trading that works in effectively the same way as LocalBitcoins is US-based Paxful. Paxful allows users to buy bitcoins using over 300 different payment methods including gift cards, credit cards, PayPal, etc.
The great thing about peer-to-peer trading platforms such as LocalBitcoins and Paxful is that users can buy bitcoin without a bank account, which makes bitcoin accessible to the underbanked parts of the world.
Alternatively, you could purchase bitcoin and ether on cryptocurrency exchanges such as CEX.io, which allows you to fund your digital trading account using your credit card. On exchanges, you will often find better prices than on pure “buy bitcoin”-platforms but they are more difficult to navigate for newbies.
If you are not using to online trading platforms than buying digital currencies on an exchange might feel a little daunting at first. If you are unsure about how to place an order on the exchange and how buy orders match up with sell orders, I recommend going through the exchange’s tutorials before you place any trades. Most exchanges will offer guides or tutorials on how to trade on their platforms.