How To Buy Bitcoin Online

We are all subject to our choices. We are thought to make decisions instantly, yet we are bombarded with so many possibilities that have hidden consequences. With the painstaking processes to earn our money, we cannot afford the luxury of a misdirected decision.

One mistake may mean both a money and private data. It’s in the technology’s nature to make money transfers quicker and more frequent. But that also bounds it to be targeted by cyber hackers and all sorts of viruses so it must counter with adequate security and anonymity.

You’re here because you’re ready to invest in cryptocurrency and we will show you how to buy Bitcoin online and where the best places are to do so. We will explore why people buy bitcoins and how they choose between the different exchange platforms like credit, debit card or any 3rd party online payment system like Paypal.

Why Do People Buy Bitcoin

bitcoin exchange

Bitcoin has been alive for over 8 years and it has just begun to hit the mainstream with the non-technical side of the population too. Still, it takes years for technologies of such magnitude to capture the interest of people and many still don’t understand why they should try using it. Below are the most common reasons:

Bitcoin doesn’t discriminate – Anyone can use it around the world. While it’s expensive to buy Bitcoin, there’s no third party discriminating anyone based on a different economic status to join the network.

It’s faster than traditional methods – Transactions may be instantaneous, with “zero-confirmation”, meaning they have been validated by the blockchain. The average validated transaction with Bitcoin may take around 10 minutes, comparing to conventional bank transfers it’s next to nothing.

Bitcoin transactions are cheap – Banks charge a high fee for card transactions in comparison to the minuscule payments of the blockchain.

Governments have no control – One of the biggest attractions of the cryptocurrencies is the independence of money, and your money is now your money to control.

You don’t need to trust anyone else – Online purchases require entering all your private details and entrusting all your information to the vendor in question. If that merchant was to be hacked, all your information would be stolen and you would be liable to theft. Bitcoin is entirely decentralised when a transaction is sent, it is digitally signed, and secured. A vendor does not need to know who you are as the transaction is safe regardless of this.

Inflation doesn’t happen – Inflation occurs when governments print a surplus of money to accommodate any shortfalls in the economy. This process is known as quantitative easing. Needless to say, it’s a short-term solution to long-term problems. If money circulation increases by 25%, a bar of candy from $1 will move up to $1.25. However, people’s income will remain the same and will not be affected by the inflation. Bitcoin has a limited 21million bitcoins in circulation and whilst a value can decrease or increase, the number of bitcoins won’t grow.

There aren’t any chargebacks – Once a bitcoin is sent, there’s no way of reverse it. A lot of fraud attempts are pre-emptively stopped by this simple feature. Once a transaction is inputted into the public ledger, nobody can overturn it.

It’s an investment – Bitcoin has already proved that it’s here to stay and the value will keep on increasing. Investing in Bitcoin at any time can bring an enormous ROI.

How To Choose The Best Online Bitcoin Exchange

how to create a cryptocurrency wallet

Everyone has different ways of identifying their best exchange in the market. Some see Bitcoin as an investment opportunity, some as an online payment system and some to trade it.

However, regardless of your intentions, you have to first obtain Bitcoins to be able to utilise it in the future. And to that, the easiest way is through an online Bitcoin exchange.

Here’s what to consider when choosing an online exchange:

Location – Is the exchange primed for Europe? America? We suggest you first check the legality of Bitcoin. Bear in mind, certain exchanges have country restrictions and your choice may be more limited.

Payment Method – Make sure the exchange accommodates your preferred payment. Card, bank transfers and even other crypto-currencies are the most common.

Order Book Volume – This is the exchange’s list of buy and sells orders. A higher volume book indicates the exchange is active and it has liquidity. Good to note that an exchange without a published order book is not legit and not recommended to use.

Speed – This most likely refers to the verification process or delivery speed of your exchange. Some exchanges may take a couple of days for the initial purchase but might be instant for subsequent ones. Research the verification durations and delivery speeds of your exchange.

Fees – Besides from the standard exchange rates, hidden fees tend to pop out of nowhere. If you are using a credit card as an example, a fee of around 3-10% would be present. It’s advised to also check the miners’ fee. With the Bitcoin’s popularity growing, so are the fees for checking the transaction.

Privacy – Exchanges that accept credit cards or bank transfers are lawfully bound to collect users’ identities, hence you will have to provide a form of identity. Cash is the most private way to buy your cryptocurrency and you can do it through Bitcoin ATMs or a peer-to-peer (P2P) Bitcoin transfer, like LocalBitcoins. Exchanging Bitcoin online through exchanges are also bound to follow the Know Your Customer (KYC) policies.

Security – Look at the website; is it a secure HTTPS website? Does the exchange offer a two-factor authentication? Was your verification process trustworthy?

Regulatory Compliance – When exchanging your local fiat currency into bitcoins, you must automatically trust your money with the Bitcoin exchange in the process. They are holding your money and are in total control of them. Regulatory compliance implies the Bitcoin broker will comply with the laws that surround them.

Reputation – The best way to go is checking people’s thoughts at their purest. You should look for the reviews, ask how many people know about the exchange, what they like about it, what they don’t, and finally if it aligns with your interests. Discuss, learn and apply. When we were choosing our first exchange to buy Bitcoins, we had looked at dozens of reviews and decided to go with BitPanda not only because we liked it, but also because we couldn’t find any complaints from other users.

Beginner-friendly – Does the exchange guide a beginner along the way? If you’re a rookie in the Bitcoin world, you expect support and excellent customer service in case you had any questions. Keep this in mind.

Pros and Cons of Online Bitcoin Exchanges

None of the Bitcoin exchanges dominates the market in a monopolistic way and sometimes it’s better to use multiple exchanges to gather benefits of the few of them. Below you find a list of the most popular and trusted exchanges that Bitcoin investors are using:

EXCHANGE

PROS

CONS

KEY FEATURES

Coinbase

  • Easy to use design
  • Excellent security through SSL Encryption,  AES-256 wallet protection + funds stored in cold wallets
  • Low transaction fees (1-4%)
  • Debit/Credit card friendly
  • High trading volumes
  • Not available worldwide
  • Customer support may take long
  • Demanding verification process
  • Instances of violations of user privacy
  • Good security system
  • Low fees
  • Payment diversity
Poloniex
  • Diversity – 80+ tradable cryptocurrencies
  • High trading volumes
  • Very low transaction fees(0-0.5%)
  • Margin Trading available on the largest altcoins
  • Bad customer support
  • Unreliable due to servers crashing
  • Doesn’t support fiat currency
The biggest cryptocurrency choice
LocalBitcoins
  • Largest P2P Bitcoin trading platform
  • Available in 249 countries
  • Easy to use
  • You can buy Bitcoins with cash
  • No ID verification required
  • Multiple payment methods
  • Excellent customer service
  • Scams by other users are present on their platform
  • Additional fees for a superior anonymity
  • P2P user interaction
  • Easy-to-use
  • Cash accepted
Kraken
  • Good reputation
  • Low transaction fees
  • Excellent liquidity – daily volume is around 10-12 million euros
  • Excellent liquidity – daily volume is around 10-12 million euros
  • Margin trading accepted
  • Not suitable for beginners
  • Expensive deposit fees
  • Poor customer support
  • Struggles when market has high amount of traffic
  • Perfect for experienced traders
  • Suitable for large sums
BitPanda
  • Easy to use
  • Good for beginners and professionals
  • Variable payment methods
  • Strong security and verification system
  • High exchange rate
  • Low anonymity
  • Only supports three languages – English, German and Spanish
Easy-to-use with various payment methods
Gemini
  • Marketplace open 24/7
  • Extensive compliance regulation within the states/countries of operation
  • Reliable customer service
  • Only supports 42 US states and a few other countries
  • Confusing interface
  • Not suitable for beginners
Very good customer service
CEX.io
  • Easy to use and suitable for beginners
  • Straight-to-business approach – complete transparency when paying
  • Reliable security practices
  • High exchange rate
  • Verification process is demanding
  • Litecoin recently unlisted from exchange
  • Transparent fees
  • Extensive security system
CoinMama
  • Fast transaction time
  • Easy to use
  • Excellent customer service
  • High exchange rate
  • Tends to halt selling during peak periods
Easy-to-use

The Best Online Exchange For Bitcoin

a guide on how to buy bitcoins

Your best is always subjective to your needs. It always depends on what you’re prioritising at the end. With this in mind, these are the key features of an exchange:

  • Ease-of-use ­
  • Overall expense
  • Diversity in payment options
  • Security
  • Speed

Lots of Bitcoin exchanges are trying to become more appealing to the non-technical users. Coinmama is definitely easy to use with its simple design and real-time price bundles, but it has one of the highest fees on the market.

Poloniex also stands proudly with its cheap transaction fees and very diverse of 80+ payment options in cryptocurrency. This may seem like a lot (and it is) but at the same time, they don’t accept fiat currency.

It may not have the speediest customer service but Coinbase is one of the best exchanges, a true all-rounder with only a few disadvantages. One of them is their limited accessibility around the world.

It may not be the most technically friendly platform but LocalBitcoins allows you trade bitcoins instantly. Oddly enough, it allows you to meet in person with other traders and buy bitcoins with cash. Privacy is also a big part of this exchange and is currently one of the best places to buy bitcoins anonymously.

Last, but not least, it’s one of the most reliable European exchanges – BitPanda. This Austrian startup has won multiple awards and is thriving to make Bitcoins widely accessible. A big plus is their secure verification system and relatively low transaction fees. But you would have to sacrifice your anonymity and show an ID form. Also, since the exchange is set up in Austria, prepare yourself for a verification in German.

Keep in mind that regardless of which exchange you decide to use, you should never keep your funds there. They should be transferred as soon as possible to a wallet so you take the full ownership of them and your private key.

So what are your thoughts on how to buy Bitcoin online? Do you know an exchange that can be recommended to others? Share your knowledge with us in the comments below!

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Megan is a self-taught blockchain enthusiast. She enjoys combining finance with technology, from a less-techy perspective. BiteMyCoin is her most recent project underneath the umbrella of an international digital marketing agency ANCHOVY.