If you’re new to Bitcoin, you’d want to know how and where to buy it from. Even though you may have had a look online already, the chances are that you found yourself overwhelmed by the amount of options available. It’s incredibly easy to get started with Bitcoins and we’ll show you how.
How To Buy Bitcoins Online
Just like you won’t pour yourself some water without a glass to hold it in, you won’t purchase Bitcoin unless you have a Bitcoin wallet set up. This is a digital wallet you will store your Bitcoins in until you use or trade them. Setting up a wallet has been made considerably easy now as most exchanges offer their own Bitcoin wallets. Getting a Bitcoin wallet is only a matter of signing up to the service you wish to buy Bitcoin from.
However, it is also a good idea to maintain a dedicated wallet that isn’t connected to an exchange in case the exchange is ever offline and you need instant access to your Bitcoins. There are several dedicated wallets to choose from with a specific set of features and platform compatibility. Websites like Bitcoin.org and others will help you search for wallets with a bunch of filters to find the ones that suit your needs.
Selecting a Bitcoin Trader
There are several cryptocurrency exchanges and marketplaces, but the best place to start if you are new at Bitcoin trading is with an exchange. Exchanges, unlike marketplaces, are more secure and there are less chances of you getting scammed unless the exchange itself isn’t trustworthy.
Many popular exchanges and marketplaces also have smartphone apps for Android and iOS that can be used for on-the-go Bitcoin trading.
Exchanges will vary based on their reliability, features, and supported payment methods. It is advisable to compare Bitcoin exchanges and their features using a cryptocurrency exchange comparison site.
An important consideration when selecting an exchange is to check if it accepts payment methods that suit you. For instance, an exchange that only accepts bank transfers when you want to pay with a prepaid gift card wouldn’t be very convenient.
There are now multiple exchanges and marketplaces that accept a plethora of payment methods in addition to debit/credit card payments and bank transfers, which almost all trading platforms accept. Below, we will discuss some of the more popular payment methods and how you can buy Bitcoin through them.
Buying Bitcoin with Gift Cards
You can now buy Bitcoin with a number of supported gift cards including Amazon, Google Play, iTunes, and Steam Wallet. However, it is mostly peer-to-peer marketplaces that accept gift cards as a payment method and not crypto exchanges.
A cryptocurrency marketplace is the eBay for Bitcoin. Of course, any kind of marketplace has a high probability of having scammers, so they aren’t recommended for first-time users. If you do your research before making a purchase and thoroughly check a seller’s reviews, you should be fine. Also, the more popular marketplaces come with escrow to protect buyers against scams.
There are some things you need to consider when buying Bitcoin with gift cards:
- Make sure the seller you are buying from is reliable.
- Ask the seller if there are any restrictions to accepting gift cards. For instance, some sellers won’t accept gift cards purchased from particular cities.
- Send clear pictures of the gift card or ensure the code has been entered correctly.
Once again, make absolutely sure that the seller has plenty of positive reviews under their belt.
Buying Bitcoin with PayPal
This one is a bit tricky. Bitcoin exchanges don’t accept PayPal payments because of security reasons. PayPal is a haven for scammers due to its lenient refund policies that favor buyers more than sellers. However, there are two ways you can still use PayPal to purchase Bitcoin.
Method 1: Through a Marketplace
Although Bitcoin exchanges do not accept PayPal payments, a lot of marketplaces do. For instance, Paxful is a P2P exchange that supports Bitcoin. You can easily buy Bitcoins using the most convenient ways possible. The method of making a purchase through PayPal is exactly the same as that of gift cards. With PayPal, these are some considerations you need to take:
- Make sure the seller you are buying from is trusted.
- Always send the money as ‘Payments’ and not as ‘Friends & Family Transfer’ to be covered by PayPal’s buyer protection.
- Send confirmation as soon as payment has been made for quick processing.
Method 2: Through an Exchange
If you prefer the added security of a Bitcoin exchange, there is still a way to purchase Bitcoin from an exchange using PayPal. Do be warned, though, that this method is longer and requires a ton of patience.
Several websites now allow you to convert your PayPal credits to another virtual currency, like the Linden dollar, which can then be traded for Bitcoin on an exchange. There are also a number of other currencies that PayPal can be traded for through reliable exchanges. Here’s what you have to do:
- Find a virtual currency that can be bought with PayPal through that currency’s exchange.
- See if that virtual currency can be traded for Bitcoin on the crypto exchange.
- Transfer money from PayPal to the virtual currency exchange and purchase the currency.
- Use the purchased virtual currency to get Bitcoin on the crypto exchange.
This method works exactly as any other crypto-to-crypto trade on an exchange. Since all purchases are through an exchange, this is a reliable way to purchase Bitcoin using PayPal.
Buying Bitcoins used to be a heck of a complicated process until some years ago. As cryptocurrencies have gained a foothold in modern e-commerce, more exchanges have cropped up over the internet and more online businesses have started accepting Bitcoin as a payment method. The past couple of years have seen the rise of some incredibly simple and reliable exchanges and marketplaces.
They give you the freedom to use a variety of payment methods and even purchase through your smartphones, making cryptocurrency trading a breeze even for the less experienced.