This is meant to be a quick reference guide to buy Bitcoin and figure out the best places to do so, depending on where you live. One important theme throughout is about preserving your privacy. If you don’t care much about it, then there are more ways to buy Bitcoin through centralized services. If you want strict privacy, then your options get limited, with mostly only peer-to-peer transactions possible.
If you’re new to Bitcoin and are looking to quickly buy Bitcoin, this guide should help you immediately. If you’ve never owned a Bitcoin but want to experiment with Bitcoin wallets and how the whole thing works without putting in any “real” money, check out the section on Free Bitcoin, through which you can get your hands on tiny amounts of Bitcoin to experiment and play with.
Finally, there are other sites that are specially made for trading Bitcoin instead of buying Bitcoin for individuals. These could also be a good way to buy or sell Bitcoin, but typically require more hassle. This route is recommended only if you’re looking to buy Bitcoin in large quantities. Even then, some specialized buyer websites might be the best idea.
It is extremely important to keep your Bitcoins secure. This means keeping the private keys that hold your Bitcoins secure. There are many Bitcoin wallets for everyday use, such as Armory (high on security, low ease of use) or Electrum for desktops and Breadwallet for iOS.
More than everyday usage, it is important to keep your savings safe, which you don’t intend to use for everyday spending. Hardware wallets seem like the best option in this case. Check out Ledger (cost 29€,approx $36) or Trezor (cost $119). If you hold more than 5 Bitcoins for the long-term, I suggest getting one of these to keep your Bitcoins secure.
Buying Bitcoin (and Selling Bitcoin)
LocalBitcoins: LocalBitcoins is a peer-to-peer Bitcoin trading marketplace, which lets you connect to other people in a similar geographic area, exchanging Bitcoin for cash. Most major cities are represented here. Advantages are that you can buy and sell anonymously without having to register with your identity anywhere. Disadvantage is usually with respect to prices that you get (highly geographic supply-demand based) and also the time investment in going out and finding people.
Mycelium Local Trader: This is another peer-to-peer Bitcoin buying and selling marketplace, similar to LocalBitcoins, but is accessible through the Mycelium Bitcoin app for Android. Mycelium is fairly good with privacy, and promises not to store a bunch of meta-data on its platform around the trading platform. This is another good way to buy Bitcoin while protecting your privacy. Of course, the person on the other side of the trade will sell Bitcoin, so you can use this to both buy and sell Bitcoins.
Bitcoin ATMs: Bitcoin ATMs are generally another good source to buy Bitcoin. There are some which are two-way ATMs, so you can buy and sell Bitcoin at these ATMs. Bitcoin ATMs, or BTMs are pretty spread out throughout the world, but tend to concentrate in North America and Western Europe. One big advantage of Bitcoin ATMs is the privacy they offer (although be careful as some ATMs will ask for a scan of your ID or scan of your hand) as the transaction is handled through cash. However, they usually charge a fair amount of premium that can range from 2% to 10% and beyond.
Just go for Coinbase. It’s by far the simplest and easiest to register and use for US residents. You can just connect your bank account, and depending on the levels of verification, can even buy Bitcoin instantly. There’s a new competitor to Coinbase, Circle, which promises no fee. It is a little more expensive to buy Bitcoin at Circle though since the price seems to be higher than Coinbase. However, if you want to sell Bitcoin, I would suggest using Circle over Coinbase as you’re very likely to get a better price at Circle. Coinbase recently opened an exchange as well, so that’s helpful, and they operate in multiple countries now, which is an added advantage.
Snapcard has also recently started in the US which makes it simple to convert between Bitcoin and US Dollars, in a seamless and easy way by connecting your bank account or credit card. It’s a nice alternative to Coinbase and Circle, if you need one. Also, Microsoft recently partnered with Snapcard to add Bitcoin to their Bing Rewards program, which is pretty neat.
This is as opposed to the other option available for US residents, CampBX, where you have to physically mail a money-order and it can take up to a week for your money to be deposited into your account. This is going down in popularity by the day, as better options become available. CampBX was one of the first companies in this space in the US though, but is definitely not recommended at this stage of Bitcoin’s evolution.
If you want to move large volumes of Bitcoin, Coinsetter has a pretty good OTC desk, so they’ll quote you a price for bulk orders to buy or sell Bitcoin, without it having to be posted on the order books. Coinsetter also has a regular exchange where you might find some price difference for Bitcoin arbitrage if you have enough liquidity on two exchanges. If you’re an institutional buyer, check out itBit, as they market aggressively towards financial institutions.
If you don’t want or are unable to link your bank account, Expresscoin promises to be the go-to place for the unbanked where they take a variety of different payments and you can choose whatever wallet you want (e.g. multisig for higher security). It’s new but promising. They’ve also expanded into Canada. Seems like a well-run Silicon Valley startup.
If you want to buy small amounts of Bitcoin using credit card or PayPal (since chargebacks are possible on both, companies only sell small quantities), check out Bitcoin Insanity (Tinkercoin has ceased operations and no longer sell Bitcoin for credit card/PayPal).
New York Special: If you’re in New York, check out the New York Bitcoin Center, which hosts 2-3 times a week, a special trading event where you can buy Bitcoin from fellow Bitcoin enthusiasts, or sell Bitcoin to them. It is a completely peer to peer marketplace where buyers and sellers come together and is also probably the most anonymous way to buy Bitcoin. Trading days are usually Monday, Thursday and Saturday, but they always have special events throughout.
The best way for Canadians to buy Bitcoin is through CaVirtex. This is one of the oldest Canadian Bitcoin exchanges, and has been sold itself to New York based Coinsetter, thus greatly improving its underlying technology and also the features that it support today and in the future. Note that now Coinsetter itself has been bought by Kraken, so you can just join Kraken now.
Europeans have more options than Americans. Bitstamp is the most trusted exchange in Europe so far. However, if you can get your money into BTC-e through their various options, you might get a better price.
Coinbase has been rapidly expanding, with Europe as a priority. If Coinbase is in your country, I would suggest using that option if you’re not looking to trade. It’s a $400 million multinational behemoth now. This is the list of countries that Coinbase operates in.
Safello is another very good option for most European countries. For example, in Sweden, if you have a bank account at Handelsbanken, you can transfer money instantly to buy Bitcoin with Euro, almost like Coinbase. Other transactions take 1-2 days usually. Safello has raised a good amount of money already, and looks like a promising way to buy Bitcoin in Europe. Countries supported: Sweden, Spain, Poland, Hungary, Belgium, Netherlands, UK, Italy, Switzerland, Germany, France and Austria.
BTC China is the most popular exchange, that also charged 0% fees initially during the promotional phase but is now moving to other regions after the crackdown by the Chinese government on Bitcoin operations in the country. OkCoin and Bitfinex are two other options. Bitfinex has been in a big hack though and lost customer funds.
There are two major exchanges in India that let you buy Bitcoin for Rupee – Unocoin and Coinsecure. Coinsecure is a trading platform, so you can buy and sell Bitcoin in INR. Unocoin aims to be a full service merchant and wallet provider that also lets you buy Bitcoin. The fees at Coinsecure are 0.3% while they are 1% at Unocoin. Unocoin is more popular in the West as it raised its seed round of $250,000 through Barry Silbert’s Bitcoin Opportunity Fund. However, Coinsecure is making strides in gaining market share in an expanding Bitcoin market.
Let me know in the comments!
Buying and Selling Other Crypto-Currencies
With a few exceptions, the way you would buy and sell other crypto-currencies is through Bitcoin, so if you have dollars and you want to buy Primecoin, you’ll probably need to buy some Bitcoin first, and then send these to an exchange, convert them to Primecoin and then withdraw them to your wallet (or leave it on the trading platform, if you trade frequently).
There have been lots and lots of scams and hacks in the altcoin trading space. Please be careful how you use these services below. Don’t keep too much in any exchange, even though it might be convenient and be cost-effective.
As of mid-2016, the best exchanges to trade altcoins (other cryptocurrencies) are Poloniex, ShapeShift, and Bittrex. Note also that both Poloniex and ShapeShift have been hacked previously, but they are both going pretty strong nevertheless (as of this writing). ShapeShift is great if you value privacy. You don’t need to create any accounts and use personally identifying information, unlike Poloniex and Bittrex.
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