Buying bitcoin for the first time seems to be a complicated process. But in reality, it is not.
- Buying the first bitcoin seems to be a complicated task.
- A number of the options are available for the buyers to buy bitcoins.
- The choice of option depends on certain factors.
- Mode of payment, the extent of private information you want to disclose, place where you live determines your choice.
- Credit cards, bank transfers, PayPal, Bitcoin ATMs, Direct commercial exchanges are some options.
As cryptocurrencies, especially bitcoin has started making headlines; many people are fascinated to get into the game. But how to start puzzles all. The very first question is how and from where to buy a bitcoin. So here we are making things easier for you.
Buying bitcoin for the first time seems to be a complicated process. But in reality, it is not. Actually, plenty of options are available to easily and quickly buy your first Bitcoin. However, before you invest into it, remember that unlike fiat currency, it isn’t universally accepted and is also highly volatile in nature. Bitcoin is still in a nascent stage and its price volatility, taxation and legality aspects should be kept in mind before buying it.
Once you’ve made your mind to buy a Bitcoin, look for the best option for how to buy it. Nearly in every country, numerous options are available to buy bitcoins, like ATM, brokers, local traders, exchanges, gift cards. The choice entirely depends on your country and your preferences. However, the best way to purchase the first bitcoin depends on certain factors, like-
- Your mode of payment
- The extent of private information you want to disclose
- Place where you live
Now, we will take each factor so that you can easily decide which platform will go well for you.
Mode of Payment:
This depends on how advanced is the financial system of your country is. In order to buy bitcoin, you have to pay money to someone else. Some common means of payment to buy Bitcoin are:
Credit Card: Among the most common means of payment is through credit card. However, the credit card is not accepted by every direct commercial vendor as this has caused losses to vendors.
Bank transfer: Here mostly through online banking, money is sent to a seller of Bitcoins and in exchange you get Bitcoin. Direct debiting is usually not accepted. Most exchange platforms only accept bank transfers.
PayPal:Similar to credit cards, not all vendors accept PayPal for the similar reason that transactions can easily be undone.
Private Payment Channels (Cash, Western Union, etc): There are only limited exchange platform and almost no direct exchange where these payments are accepted. But often you’ll find a seller on p2p marketplaces where you can pay with cash or other private means of payments. A good chance might also be an ATM where you can buy Bitcoins with cash.
Other Payment Channels (Sofort, iDeal, Skrill): If you use a common provider, like in Germany Sofort, in the Netherlands iDeal and so on, you have a good chance that your domestic direct exchange accepts it.
Like all financial assets, some regulations are applied on bitcoin as well. Anti-Money-Laundering-Rules (AML) is applicable on all platforms engaged in bitcoin transactions. These platforms are required to verify the identity of its users by adopting Know Your Customer (KYC) rules.
Bitcoin transactions can be traced back as they are saved on the publicly visible blockchain. Hence, how much private information you disclose while buying Bitcoins can have implication on your privacy. Depending on how much private information you want to disclose, there are various grades of KYC.
No KYC: Here you do not need to show your identity and you pay with private means like cash, ATMs or Western-Union. Your identity will not be disclosed but this is expensive compared to other option.
KYC Light: Here your payment channel and/or your phone number are disclosed. In case of payment made through a bank account, PayPal, or credit card, the providers know your identity. On platforms like direct exchanges or marketplaces, you can buy a limited amount of Bitcoins with KYC Light.
Full KYC: Here your identity is disclosed completely, maybe through a passport, an ID card, or a driving license. If you want to invest larger amounts of money or trade on exchanges, Full KYC is required.
Different ways to change fiat-money to digital cash- Bitcoin: There are several ways to change fiat-money to digital cash – in Bitcoin. Each one has its own pros and cons.
Bitcoin ATM provides easiest and most private method to acquire Bitcoins. Companies like Lamassu produce ATM-machines for Bitcoins, where you can buy Bitcoin with cash. However, ATMs charge a high fee of 3-6% or even more.
Next easy way to buy Bitcoins is through Gift Cards/Voucher. You can buy it from a kiosk or some other shop, visit a website and can use the code on the card to get your Bitcoin.
For those who want to invest in large amounts of bitcoin, an Exchange platform is an option for them. However, it is somewhat a complicated process and requires disclosing private information. Here you need to trust the exchange with your money.
P2P-Markets are another option where buyers and sellers of Bitcoin meet and trade with each other. Here you can set a price and wait until someone sells you a Bitcoin. The most famous P2P-market is LocalBitcoins which serves a lot of currencies and lets traders decide the means of payment.
You can also opt for Direct commercial exchanges/brokers that buy Bitcoins on an exchange and sell it to customers. You visit a website, choose your means of payment, pay and get Bitcoins for prices set by the platform, for example, Coinbase and Circle. However, it must be remembered that exchanges and wallets don’t provide the same protections banks do.
With growing popularity of bitcoins, numerous options are coming up and it is becoming easier to buy bitcoins. So, buy a Bitcoin, pay with it, store it in your digital wallet, and watch the price going up and down.
Disclaimer: This is not an investment advice. It is of paramount importance that everyone should do his or her own due diligence before investing in any product, platform, tokens etc. Cryptocentral.io does not endorse any content or product published on this page. Our aim is to simply provide all the readers with the latest information in the field of cryptocurrency / blockchain industry that might be of interest to our readers.