Ok, there is not really 125 ways to buy bitcoin. It just sounded cooler with that amount.
There’s really just 3-4 different ways to buy Bitcoin. And in this tutorial, we’ll go over them so that you know which way works best – for you.
Where to Buy Bitcoin
In this guide, we will go through the step-by-step tutorial on how to buy Bitcoins. We are focused on making it easy to understand even if you’re just getting started in the world of cryptos.
We understand the confusion you’re currently facing if you are just getting into the world of cryptocurrency and is trying to buy Bitcoins online. Lots or questions immediately pop up — where and how do I buy them safely? And where do I store them?
We’re not here to try to convince you to buy BTC (or any other cryptocurrency for that matter), we assume that you already are pro-crypto, or just want to be involved in the new blockchain technology. We want to protect you against all the scams that come with booming markets, in this case, Bitcoin.
In this guide, we will help you to buy Bitcoin safely. Our goal is to help you avoid being scammed, sold over-priced BTC or been lured into exchanges with high fees. We are brutally honest with our readers and will never recommend services because they are paying us well for referrals (yes, we do get a bit of money for each sign-up we refer to certain companies. We, like you, truly love money in all shapes and forms, especially cryptocurrency.)
Before we get into listing the best Bitcoin exchanges we need to go through what you should consider when choosing an exchange. Each person is different and looks for different factors, thus you need to figure out what factors you value the highest when buying Bitcoin (usually speed is one of the most valued factors due to the price constantly going up and people want to get their hands on Bitcoin as soon as possible, after that comes privacy since you need to submit rather personal information and if those get in the wrong hands, you’ll regret it).
First and foremost is your privacy. Since most exchanges nowadays require ID-verification it is important that you pick an exchange that is treating your personal information with respect.
This is even more important for those that want to buy Bitcoin privately. The most private way by far is by cash since it is untraceable. We have a guide on how to buy Bitcoin with cash here.
Those of you who, for whatever reason, don’t want to submit your ID, there are some ways to buy without ID or verification.
Are you interested in putting a lot of money into a cryptocurrency such as BTC, BCC (Bitcoin Cash), LTC or XPR? Then the limits you get on each exchange is an important factor. The limits are there to protect you and others from fraud – but they can indeed be quite frustrating. On most exchanges, you can upgrade the limitations by, for example, submitting an ID or by having an aged account.
Coinbase got quite hefty limits at $3,000/week with a credit card, $10,000/week with bank transfer and $50,000/week with USD wallet (on Coinbase). You’ll find the highest limits when paying with Credit card, on CoinMama.
Since the price is going up at a rapid rate a lot of people want to get in as soon as possible, to make the most money possible. Since the public interest in Bitcoin is at an all-time high as I am writing this, the number of sign-ups to the most popular exchanges receive are up to 100,000 per day. Since they want to protect their current user base while adding as many new users as they possibly can handle, the process of buying can take a bit to set up – but once you’ve made your first transaction on an exchange, it’s easy as ABC.
Bitcoin ATMs are currently the single fastest way of buying Bitcoins. If you are not fortunate enough of living close to a Bitcoin ATM the next-best option is probably an exchange that offers instant buys of Bitcoin (we’ll write which ones offer this in the best Bitcoin exchange section).
4. Exchange Rate
The price of Bitcoin is always on the move, thus we’d recommend you to check the current price of Bitcoin at CoinDesk.com. However, since you are here, I believe you’d want to get your hands on a Bitcoin right in this second, thus we would suggest not focusing too much on the current price. Make sure to compare the exchange rates of the different exchanges before buying, to ensure that you get the cheapest price possible.
5. Reputation & user reviews
We truly recommend you to check out what other people are saying about their experience with the different exchanges. One exchange might market themselves as the market-leading one with superior support and uptime, but in reality not provide quick support and be downright awful to deal with.
This is why you shouldn’t let a YouTube advertisement or any other ad lure you into any exchange before comparing all of them (this is true for all services and products in my opinion). We help you compare all the exchanges so that you easily can find the right one for you, one that actually cares about their users and is easy to deal with.
Some exchanges take high fees for their service. These are the type of exchanges that you want to avoid so that you end up with the most Bitcoins possible in your wallet. The fees vary from which payment method you want to use to buy Bitcoin, as well as for deposit, withdrawal and trading fees. If you are trading, you’ll need to calculate the profit based on how much the fees are – some will take 0,5%, which can quickly add up and destroy your trading profits.
We will discuss the pros and cons of each payment method in the next section of this tutorial. We’ll also list the fees for each exchange in the list of the best Bitcoin exchanges 2020.
7. Payment method
You might want to buy Bitcoin with a specific service such as PayPal, or you want to buy Bitcoin locally and totally be anonymous. Whatever the case may be, only you know your preferred payment method.
In the next section, we will dig deeper into the different types of payment methods available, and compare the pros and cons of each and recommend who they fit the best.
There are a number of different ways to buy Bitcoin, these include:
- Buying Bitcoin online with a debit card, credit card, or bank transfer.
- Buy Bitcoin with a Bitcoin ATM locally.
- A cash deposit or buying Bitcoin with cash in your local area.
- Buy Bitcoin using PayPal.
These are by far the most popular methods of buying Bitcoins, but hang in there, there are more details to each method. In this section, we will go through the pros and cons of each method so that you can make an educated choice of payment method.
Buying Bitcoins require you to exchange EUR or U.S. Dollars, or if you are buying locally, your local currency.
However, if you’ve already made your mind (some of you already probably know what payment methods you have available and which you prefer), you can skip this section by clicking here!
1. Credit or debit card
This is by far the most common type for the beginner who wants to get started in buying and selling Bitcoin, or for those that want to hodl Bitcoin. It’s an easy way to buy Bitcoins since most people have credit cards and it’s easy to fill in the necessary information.
Pros of buying Bitcoin with credit/debit card
It’s one of the easiest ways since it’s by far the most popular way to buy products online. It’s the easiest way. You’ll receive your Bitcoins instantly after the transaction has been verified, which doesn’t take more than a few seconds usually.
Cons of buying Bitcoin with Credit/debit card
The fees are way higher than for example a bank transfer is. If you are patient and doesn’t require your newly bought Bitcoins instantly, we suggest using bank transfer as a payment method. If you want to buy Bitcoin anonymously, then buying with credit card isn’t available. You’ll need to ID verify you before buying BTC with a Credit/debit card.
Who should use a debit/credit card to buy Bitcoin?
If you are in a rush to invest money into Bitcoin then this method is for you. You can buy Bitcoin instantly while those who do the bank transfer way is doomed due to banks only operating during business hours, and if you want to buy during the weekends you’ll need to wait until Monday.
It’s easy to buy Bitcoin with a credit card, but in our opinion, if you believe in Bitcoin, having the price of one go up 10% before you are able to buy is nothing to lose sleep over. Who knows, maybe it will go down 10% before Monday and you do an even better deal?
Here are a few exchanges that accept payment via credit card:
- Coinbase – USA, Europe, Canada, Singapore (Use our link and buy $100 or more worth of Bitcoin, and receive $10 worth of Bitcoin for free!)
- CoinMama – Globally
- CEX.IO – Globally
- BitPanda – Europe
We’ve written an in-depth guide to buying Bitcoin with a credit card and debit card if you are interested in learning more about buying Bitcoin with CC and debit card.
2. Bank Account or Bank Transfer
If you are interested in buying a lot of Bitcoins with low fees, then using a bank transfer is the best way for you. The low fees and high buying limits are what makes this option interesting. It might take longer since the transaction needs to be verified by the bank, but other than that – this is one of the best payment methods for buying BTC.
Pros of buying Bitcoin with bank account/bank transfer
Great for buying large quantities of Bitcoin, with the highest limits possible for a fresh account on any given exchange. The fees are usually really low compared to for example when buying with cash or credit card. Thus, you’ll get a great price on your Bitcoins.
Cons of buying Bitcoin with bank account/bank transfer
It’s slow. Due to the fact that banks only operate during business days and within business hours, your transaction can take up to 5 days to go through. When buying with a bank account your transaction can be traced, thus not good for those who want complete privacy. ID verification is usually required on the exchange, as well.
Who should use a bank account/bank transfer to buy Bitcoin?
Those who would benefit greatly is the long-term holders of Bitcoin that doesn’t care if they receive the bitcoins a few days later. It works great for anyone that wants to invest a large sum into bitcoin, and want to have low fees.
It’s also good for those who only want to invest on a small scale since other methods such as PayPal or cash have hefty fees of up to 15% or more. This will, for example, eat up $150 of your $1000 investment, which is indeed 15%. This also means that Bitcoin will need to go up by over 15% before you break-even. It’s not impossible that it would go up by 15% or more overnight, but if you could cut those fees to 1-2%, you’d have a much better profit at a 15% price gain.
Thus, we recommend bank account for everyone. It’s truly our recommended payment choice.
Here are a few exchanges that accept payment via bank account/bank transfer:
- Coinbase – USA, Canada, Singapore and Europe (Use our link and buy $100 or more worth of Bitcoin, and receive $10 worth of Bitcoin for free!)
- BitPanda – Europe
- Gemini – U.S. and Canada
Does this payment method sound the most compelling to you? Then we would recommend you to read our guide on how to buy Bitcoin with your bank account.
Using cash to buy Bitcoin is the most private and fastest way. You will receive your Bitcoins in a couple of hours and the transaction cannot be traced back to you. Perfect for those who value their privacy highly.
Pros of buying Bitcoin with cash
There is usually no personal information required when buying Bitcoin with cash. You simply provide you wallet address, deposit the cash and in a few hours your Bitcoins end up your wallet. There is no need to wait 5 days for the bank to process the transaction. The transaction can be completed almost instantly.
Cons of buying Bitcoin with a cash exchange
It’s costly. Usually 5-15% higher than the market price. If you’re not buying from a reputable exchange, there is a high risk of being scammed. Make sure to be on the lookout for scammy offers, and stick with the reputable exchanges listed in this tutorial.
Who should use a cash to buy Bitcoin?
Those who value their privacy the highest and doesn’t really care that it costs 5-15% more. This works well for those who want to buy stuff online privately, or just rather don’t submit any ID to exchanges. It’s quick as well, and the only downside we see is that it’s quite costly – which is not optimal if you are interested in trading bitcoin – since there are cheaper alternatives.
Here are a few cash exchanges we recommend:
Does this seem interesting to you? Then read this article where we go more in-depth of buying BTC with cash exchanges!
We can also recommend you to look at Bitcoin ATM Radar to see if you have a Bitcoin ATM near you.
With this, you can easily deposit cash and get your cash turned into bitcoins sent instantly to your wallet. Only reputable ATMs are registered on Bitcoin ATM Radar so you can rest assured that you’re not being scammed. Stay away from Bitcoin ATMs that aren’t listed on there, though.
Pros of Bitcoin ATMs
If you have a Bitcoin ATM near you, then it is one of the fastest ways to buy Bitcoins. You usually have 100% privacy since no ID or personal information is usually required.
Cons of Bitcoin ATMs
The 5-15% above market rate price is the same here as with cash exchanges. Your privacy comes at a cost, but it can be well worth it for those that value their privacy the most.
Buying Bitcoin with PayPal is hard and usually very expensive. Merchants on PayPal are, by PayPal’s terms and conditions, not allowed to sell any cryptocurrencies (for example Bitcoin). However, there are some workarounds for those who want to use PayPal balance to buy Bitcoin.
Pros of buying Bitcoin with PayPal
If you have any PayPal balance that you want to use up, this can be a great purchase.
Cons of buying Bitcoin with PayPal
The fees are high at up to 12%. It’s costly and since most people have their credit card or bank account connected to their PayPal account, using those is a much better option.
Frequently Asked Questions about buying Bitcoin
Buying Bitcoin is hard, and there are a lot of questions that pop up when doing so for the first time. In this FAQs section, we answer all the questions we’ve gotten when guiding others in buying Bitcoin.
If you have any questions you would like us to answer, please contact us and we will add the most frequent asked questions, and answer individual questions.
When is the Right Time to Buy?
Yesterday. The sooner you get a hold of Bitcoin, the better. We are huge believers in Bitcoin and that the value will only continue to rise as more and more people start talking about it and seeing the potential in it. Since Bitcoin is traded 24/7, you can literally buy Bitcoin no matter what time of the day (or night) it is.
The value of Bitcoin does fluctuate highly due to news and public expressions about Bitcoin. If you want, watching charts and analyzing them can help you figure out if the probability of Bitcoin going up is higher than the probability of Bitcoin going down. However, do not rely too much on charts since Bitcoin can drop fast if someone talks smack about it – and vice versa.
Can you buy less than one Bitcoin?
Yes! The lowest amount you can buy is $1. One bitcoin can be divided into 100,000,000 pieces. Each piece is called a Satoshi, which name has come from the anonymous founder(s?), Satoshi Nakamoto. Each exchange usually allows you to insert the amount you want to invest into Bitcoin and give you the equivalent amount of bitcoin.
Can you sell Bitcoins?
Yes, all exchanges offer buy/sell option. This is called trading and is a great way to make money with Bitcoin. There’s always a fee included, so make sure you calculate your profit so that you make more profit than what the fee was. For example, if you paid a 2% fee to buy, then paid a 2% to sell, your profit must be at 4% to break-even.
Can anyone buy Bitcoin?
Of course! There’s not age-requirement. Anyone can buy and use bitcoin unless it is illegal in your country. However, in most countries Bitcoin is legal (here’s a world map of all countries where it is legal/illegal).
Can I buy physical Bitcoins?
Yes, technically you can. But our question is why? Sure, it’s cool to show off that you have a Bitcoin in a physical form, but a physical bitcoin cannot be used and is only a coin where there is a private key embedded. Bitcoin should say online, in our opinion.
There is also a high risk of being scammed since the creator of the coin can put the same private key on all coins. Then you’ve just bought a coin without any value. We recommend that you buy a 1LB bag of chocolate coins from Amazon if you want to show how much of a baller you are, instead.
Also, unless you withdraw your bitcoins from the coin immediately, to your digital Bitcoin wallet, there’s a chance the creator withdraws the bitcoins before you have a chance to.
Do whatever you wish, but we don’t recommend it.
Why would I buy Bitcoin instead of mining them?
Mining bitcoins is a big business, and we do not say that it’s a stupid thing to do but for the average joe that doesn’t have $3,000 (or more) to invest for a Bitcoin miner and sit with their $500 office laptop trying to Bitcoin will be disappointed.
A few years ago, anyone could mine a few bitcoins per day with their personal computer, but nowadays you will need to invest in a miner to really be able to mine bitcoins.
We can compare it to gold for example.
Why would you buy gold instead of mining it? I think we don’t need to elaborate on this further.
Do I need a Bitcoin account to buy bitcoin?
Bitcoin doesn’t have accounts. With bitcoin, you’ll always use wallets to store them. Technically you could have thousands of bitcoin wallets, but that would be difficult to manage. You’re responsible for the wallet security yourself, thus many prefer to have it in a physical form rather than an online wallet. Bitcoin is not a bank or trust that make sure you’re secure.
Is Bitcoin legal?
Yes, in most countries it is legal. There are just a handful of countries that have banned the use of Bitcoin. So, before you buy bitcoin, make sure to check that it is legal in your country. Use this map to see if Bitcoin is legal in your country or not.
How do I buy Bitcoin stock?
Bitcoin is not a stock, and since it is completely decentralized there is no company behind Bitcoin that you can buy stocks in.There are a few funds that have started to include Bitcoin and other cryptos in their portfolio recently. These funds usually only for mega-rich people. But most everyday people who are trying to make money buying and selling Bitcoin is doing it themselves. You buy Bitcoin, and then sell it at a higher rate. The difference between the buy and sell price is your profit.
When trading, you’ll need to make sure you include the fees and other costs in the profit so that you are sure that you are indeed making a profit when selling Bitcoin.
Where to buy cheap Bitcoins?
Cheap is a relative term. If you believe that the value of Bitcoin will rise to $100,00, the current price at $18,832 is cheap. But we assume that you are searching for the exchange with the cheapest rate. Keep an eye on Coindesk to see how the exchanges compare to each other when it comes to current price. Make sure to include the fees in your calculation.
Who controls Bitcoin?
Nobody. And that’s the wonderful thing about it. As blockchain technology is something that is really hard to summarize, and we don’t think we could do it in a concise enough way, we would suggest you watch this video which explains it briefly. Once you know the basics of it you will understand the concept of blockchain and Bitcoin, you can dig further into the technological side of it (if you are interested in it).
Why do I need to submit ID to bitcoin exchanges?
This is due to Know Your Client (KYC) laws that require the identities of each of their client. It’s also a great way to filter out the scammers who are trying to exploit the exchanges in different ways.
Why Would Someone Even Want to Buy Bitcoins?
We got two pools of buyers. Those who want to buy into bitcoin to make money by just holding it (or trying to make more Bitcoin by trading it with alternative coins, also known as altcoins). And those that are interested in buying products online with it. Big companies that have been early adopters of the blockchain technology and accept Bitcoin as a payment method is Microsoft, Dell, Newegg, and Overstock – to name a few.
One of the other use cases is sending money to family and friends outside their respective country. Since transferring money in the traditional way usually involves high exchange fees, as well as due to banks only operating 5 days a week that it sometimes takes 5 days for the transaction to be complete.
Trading bitcoin is also popular due to the fact that the market is open 24/7/365. In comparison to the stock market, which is usually only open during weekdays 9 AM to 5 PM, the speed of the market is fun and can reap great returns all days of the week.
What Happens When you Purchase Bitcoins?
A spaceship suddenly appears and you are greeted by aliens that welcome you onboard to the moon.
Ok, not really.
When you buy Bitcoin the seller of the bitcoin is sending you the bitcoins in form of a secret digital code. This is what you have an exchange for, to make sure that both parties get what they ask for. Once the transaction is completed (usually takes about 10 minutes), you are the new owner of the digital codes.
Can I use Multiple Exchanges?
Yes, and this is actually a great way to make sure that you buy as much Bitcoin as possible in the beginning if you are maxing the limits on one exchange. If you’ve maxed the limits you can simply join another exchange and purchase more bitcoin from this exchange. This you can do until you run out of exchanges available in your country.
Do I need to Pay Taxes on Bitcoin?
Yes. Consult with a local tax consult what the rules are when buying and selling bitcoin, and how much you need to pay in tax. In the U.S., every transaction made with Bitcoin needs to be declared, if you sell them with a profit. We are not tax consultants thus we cannot give you any guidance on this.
What Other Ways Can I Get Bitcoins Besides Buying?
Yes, for example, you can offer services in return for Bitcoins. Ask your current employer about the possibilities of being paid in Bitcoin, or offer a new service working as a virtual assistant or any other skill you might have. You need to, however, be prepared to be turned down since many still associate Bitcoin with criminal activities and doesn’t know how to use it properly.
Why Does Buying Bitcoin Take So Long?
Buying Bitcoin does not take long in itself, it’s the payment methods around it that do. For example, bank transfers usually take up to 5 days to complete, and a bitcoin transaction usually takes only 10 minutes. Thus the transaction can take up to 5 days to complete, but the bitcoin transaction only accounts for 10 of those 7200 minutes.
Once you have bitcoin, however, all transactions should only take about 10 minutes or so.
Avoiding Bitcoin Scams: 5 Rules to Follow
Due to the massive amount of attention Bitcoin is currently getting there are a lot of scams circulating on the web. But there are a few rules that you should follow in order to avoid being scammed.
Do your due diligence when picking the exchange for you (which, since you’re on this website, you’re already doing. Kudos to you!). Look at reviews on forums such as Reddit to see what people are saying about it. This is usually a great way to get insight on how an exchange is treating their customers.
You can also read our best exchange reviews. In that article, we go in-depth on the best exchanges so that you can compare them yourself based on fees, the speed of delivery and where they are available.
If it sounds too good to be true, it’s probably a scam
This applies to almost anything in life. If it feels like its too good to be true, it’s probably fake. Nobody will sell you bitcoins for 50% of the current market price. People aren’t always nice, and if you’re naïve enough to believe it, you will be sorry when you’re scammed.
If you’re using peer-to-peer exchanges such as Wall of Coins and LocalBitcoins, check the seller’s feedback. If you see an overwhelming amount of positive reviews on a seller then your transaction should go through without any problems. If the sellers rating is mostly negative, then stay away.
Use Escrow when buying
When buying bitcoins via a forum or online from a person, you might hear something like this:
“PayPal me the money, once I receive it, I’ll send you the money”. This is a one-way ticket to being scammed. One of my favorite sayings is also “Please send as a gift/for a friend on PayPal”. What this does is that you cannot do a chargeback once you’ve sent the money.
If you’re selling, this is also a bad way to do it since they can simply do a chargeback on their PayPal transaction claiming that they didn’t get the product/service they bought (and according to PayPal, you’re not allowed to sell cryptocurrency with them). They’ll win the dispute and since you cannot do a chargeback on Bitcoins, they’ve simply doubled their money – and left you with nothing.
Secure your newly bought coins
Ok, so now you’ve bought your first bitcoin or other cryptocurrencies. Good for you!
Now it’s time to store them. You should not let a third-party such as an exchange do this for you since over $1 BILLION have been lost in hacks and scams on exchanges. You need to do it yourself unless you want to risk all your money being stolen from you.
The only way Bitcoin is safe is if you store them in a wallet that you own, physically.
The best ones are hardware wallets since they are offline and doesn’t risk being hacked or getting malware. They are usually small, in the size of a USB flash drive, so you can take it with you wherever you go, or lock it in a security lock box.
Pros of having a hardware Bitcoin wallet
Hardware wallets are really easy to setup, you do not have to be tech-savvy to be able to get started. Hardware wallets are easy to backup and securely store Bitcoins on. There is no way of deleting the bitcoins once they are in the wallet. You can catch your kid playing with the wallet without having to panic, but please, don’t let them use it as a toy.
Here’s a hardware wallet comparison chart:
|Ledger Nano S||Yes||2016||58€||Buy here!|
While this guide can feel quite overwhelming for a beginner, it is not that much to keep in mind. Once you’ve found the perfect exchange, and bought the wallet of your choice, you’re set. We hope that you have been able to get some more knowledge about the process of buying bitcoin and that we have explained it properly.
If there are any questions you end up having after you’ve read this guide, please comment below so that we can continue the conversation there. We answer as soon as possible and are open to adding more questions in our FAQ if there are some questions that you think we have missed.
Jacob is the master-mind behind BitCongress. Over the years he has dug into the world of bitcoin and cryptocurrency and really nerded down on all the products and services. Beyond sitting in front of the computer and absorbing information on crypto, he really likes to play Zelda.