How To Buy And Sell Bitcoin
You’ve picked up the basics of Bitcoin and you’re excited about what this digital currency can do. Now you want to buy Bitcoin — but how?
(Please never invest more than you can afford to lose. Cryptocurrencies are volatile and the price can fall as well as rise.)
You can buy Bitcoin on exchanges, or directly from other people through peer-to-peer marketplaces.
You can pay in a range of ways, from hard cash to credit and debit cards to bank transfers, or even with other currencies, depending on who you buy from and where you live.
Step 1: Set Up a Wallet
The first step is to set up a wallet to store your Bitcoin. You’ll need one whatever your preferred way of buying. It could be an online wallet (either part of an exchange or through an independent provider), a desktop wallet, a mobile wallet, or an offline wallet such as a hardware device or a paper wallet.
Even within these wallet categories there’s a wide range of services to choose from, so do some research before you decide which one fits your needs.
You can find more information about some of the wallets out there, along with tips on how to use them, here on Easy Trade.
The most important part of any wallet is keeping the keys safe. These are a string of characters or passwords, and if you lose them you lose access to the Bitcoin stored there.
Buying Bitcoin Online
Step 2: Open an Account on an Exchange
A trading platform can buy and sell Bitcoin on your behalf. There are hundreds operating now, with varying degrees of liquidity and security, and new ones keep appearing while others shut down. As with wallets, it’s worth doing some research before you choose. You may be lucky enough to pick from several reputable platforms, or your search may come down to one or two depending on your region.
The largest Bitcoin exchange in the world by US dollar volume at the moment is Bitfinex, though it’s aimed mainly at spot traders. Other high-volume exchanges include Coinbase, Bitstamp and Poloniex, but for small amounts most reputable exchanges should work fine.
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Note: at the time of writing, rising interest in Bitcoin trading is putting pressure on most retail buying and selling, so we recommend a degree of patience and caution.
Verifying Your Identity
With strict Know Your Customer (KYC) and Anti-Money Laundering (AML) rules in place, many platforms now require identity verification to set up an account. This usually involves a photo of your official ID, and sometimes proof of address too.
Most exchanges accept payment by bank transfer or credit card, and some are willing to work with PayPal. Exchange fees also generally include a charge for using the Bitcoin network.
Each exchange has different procedures for both setup and transactions, and the platform should give you enough detail to complete your purchase. If it doesn’t, consider changing provider.
Once the exchange receives your payment, it buys the corresponding amount of Bitcoin on your behalf and deposits it in a wallet created automatically on the exchange. This can take minutes, or sometimes hours because of network congestion. If you want to (and it’s recommended), you can then move the funds to your own wallet.
Buying Bitcoin with Cash
Step 3: Choose How to Buy Bitcoin
Platforms like LocalBitcoins help you find people near you who are willing to exchange Bitcoin for cash. LibertyX lists retail outlets across the United States where you can swap cash for Bitcoin, and WallofCoins, Paxful and BitQuick will direct you to a bank branch near you, letting you make a cash deposit and receive Bitcoin a few hours later.
ATMs are machines that send Bitcoin to your wallet in exchange for cash. They work in a similar way to a bank’s ATM: they take in bills, you hold your wallet’s QR code up to the screen, and the corresponding amount of Bitcoin is delivered to your account. The Coinatmradar website can help you find the nearest Bitcoin ATM to you.
Note: the specific companies mentioned here are not the only options available and should not be taken as a recommendation from Easy Trade. They’re mentioned for information only.
Disclaimer: This article is for educational purposes only and is not investment advice. Bitcoin and other cryptocurrencies are highly volatile, and trading with leverage can lead to the loss of your entire capital. Never invest more than you can afford to lose. Easy Trade may earn a commission from some of the links on this page at no additional cost to you.
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