So you’ve probably researched Bitcoin, realised its potential for the future and are now ready to buy some for yourself. For many, their first acquisition of Bitcoin may feel like a scary process but in actual fact its not as complicated as you might think! Before you buy, there are some things that you will have to take into consideration such as where to put your Bitcoin, privacy concerns, method of payment and the current high fee problem.
A Bitcoin wallet is the first step to using Bitcoin simply because without it, you can’t receive, store, or spend Bitcoins. A wallet can come in the form of an application, a website, or a hardware device. You can think of a wallet as your personal interface to the Bitcoin network. In reality, it’s not Bitcoins that need to be stored and secured, but the private keys that give you access to your Bitcoin transactions and the number of coins that are in your possession.
In my article Staying safe with Bitcoin, i talk about the various wallets available. In short, if you dont plan on trading then you are most probably investing for the long term, so use a hardware wallet like the Trezor or a desktop core wallet like Electrum. For those of you who didn’t read my article on safety, let me repeat here that creating a backup of your private keys is paramount. If your hard drive fails, if your computer is stolen or you just stupidly misplaced your key, the backup will save your Bitcoins.
I personally use 2 wallets for Bitcoin, Electrum for my longer term holds, meaning buy & forget, and and the multi-coin Exodus for my everyday trading needs, meaning frequent buy & sells. Both are very reliable and easy to download and install. Both are available for Mac, Linux, and Windows. Electrum also offers support for hardware wallets (such as TREZOR, and Ledger Nano) and is generally a good option for both beginners and advanced users. Exodus has a strong following and its multi-coin support make it a great choice if you are thinking of using any of the coins it offers.
Originally, one of Bitcoin's big selling points was that payments would be fast, convenient, and cheap. Until the beginning of 2017 bitcoin fees tended to be well below $1 but in recent months, Bitcoin's popularity has outstripped the network's ability to cope with growing demand. As a result, fees are high with an average transaction yesterday costing around $28. And that is having huge implications for the ways bitcoin is being used. Bitcoin insiders are aware of this problem and are working on a solution, but its still months away though some rumors say only a couple of weeks, and it may or may not be enough to solve the problem completely. Meanwhile the newcomer is overpaying in transaction fees, because their wallet has poor fee estimation and still doesn’t support SegWit. So the new user googles “why is it expensive to send bitcoins” and end ups with the idea that Bitcoin’s days are numbered and that the true Bitcoin is Bitcoin Cash - how wrong! When you have been in the cryptospace for a few months, you too will learn of the “war” against Bitcoin by people, groups, companies and outsiders in various forms all trying to either bring Bitcoin down or overtake it with their own coin. Just know Bitcoin is here to stay and that unfortunately, transaction fees will be on the high side for now.
In most but not all parts of the world, AML (Anti-Money-Laundering-Rules) are applied to platforms that handle Bitcoins. Most of these platforms have to adopt KYC (Know-Your-Customer) rules to verify the identity of its users. And since Bitcoin transactions are publicly visible on the blockchain and can be traced back, the degree of private information you disclose can have serious implications on your privacy. Thankfully you do have the option of buying with no KYC, anonymously, via an ATM machine or through a P2P-service like LocalBitcoins or even Gift Cards, though these may not be an option in your part of the world.
ATM: As mentioned above, I personaly prefer to buy my Bitcoins anonumously and this is what I suggest most of you should do as well. And this can be done if you have a Bitcoin ATM near you. According to Coin ATM radar you can access a Bitcoin ATM in over 60 countries. A Bitcoin ATM offers an easy, quick and unonymous purchase, even though in some countries the fees may be high, like 6% and the per day limit restrictions may not suit your needs.
P2P: For those people that dont have that option, thankfuly you can use P2P services like Local Bitcoins or Bisq-BitSquare to find people in your region who are willing to sell you some Bitcoin.
If the above still aren't an option for you, then you will be forced to use services that will require you to pass on your identification. Now to a lot of you, this may sound reasonable and this is your choice. But there will come a day when any businesses that are currently handling the buy and sell of Bitcoins will be forced to hand over all of their customers transaction history to the local tax authority so if you have the choice to avoid KYC, and buy anonoumysly i would highly recomend you pick that route.
Another reason to avoid them is the fact that the majority of these exchanges usually dont accept credit cards making the buying of Bitcoin a much more laborious process. Your options for buying usually are:
Bank transfer: After opening an account and completing their KYC process, you initialize a payment and after the payment has settled you receive your Bitcoins. In most countries, this needs 1-3 days though this process can drag on longer in some places.
Credit Card: As already mentioned, credit cards are'nt usually accepted for Bitcoin purchases and if you do find a place that offers you such a service, consider yourself lucky. Unlike a credit card transaction which can be reversed a Bitcoin transaction cannot be undone and this has been proven costly to some vendors in the past.
Payment providers: The world of payment is rich with payment providers such as Neteller, Sofort, iDeal, Skrill etc and if you already have an account with one and your preferred exchange accepts payment from them, then you may be in luck. I had an account with Neteller until they froze my account for no apparent reason. I think these companies are worser than banks and dont beleive they'll be around for long.
PayPal: I only know of two places where you can buy Bitcoin with PayPal and thats Virvox and Localbitcoins. I havent tried Virvox myself but have a friend who used it once. Apparently you need to open an account on Virvox buy tokens or some other product from Virvox with PayPal and then sell them for Bitcoins.
Below I have listed some of the most preferred exchanges available in defferent parts of the world. I havent used any of these as a way to buy into Bitcoin, so I need to remind you that my negative comments above are about the KYC process that these companies require and not the actual companies themselves.
The following exchanges are pretty much available from anywhaere in the world Coinbase, Kraken, Paxful and Indacoin. If non of these are available to you or are not suitable then check below for a local provider.
USA: Expresscoin, Bitquick and Bitstamp
Canada: QuickBT, Canadian Bitcoins, QuadrigaCX, CoinSquare
Mexico: Chip-Chap, Volabit and Bitso
South America: Satoshi Tango, Bitex, Mercado Bitcoin, FlowBTC, Foxbit, SurBitcoin, SurBTC
Europe: Coindirect, BitIT, BitPanda, BTCDirekt, Coinify, CoinMate, Spectrocoin
UK: Bittylicious, Coinfloor
China: Huobi, OKCoin
Japan: Bitflyer, Quoine, Coincheck
Thailand: Bitcoin, Coins, BX
Korea: Coinplug, Korbit
India: Unocoin, Zebpay, Coinsecure
Philippines: prepaidbitcoin.ph, Buybitcoin, Coins, Coinage
Australia: Bit Trade, Buy a Bitcoin, CoinTree, Coinloft, Bitcoin,,, Coinspot
New Zealand: Coined, MyBitcoinSaver, NZbcx
Africa: Nairaex, BitPesa
Buying bitcoins is not always as easy as newcomers expect. The good news is the number of options is increasing, and it is getting easier all the time. Plus don't forget, if you are reading this in 2018, you are probably still in the first 1% of cryptospace users, so we are still in the infancy stage of crypto currencies and have a long way to go yet! .. uphill ;-)
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