You can purchase Bitcoins (BTC) with US dollars at Coinbase.com, and with Euros at Bitstamp.net. You can also margin trade, and short Bitcoin and Litecoin at https://www.Bitfinex.com. Once you own coins, it is recommended that you enable two factor authentication for all online exchange accounts, and to move any coins not being traded into a more secure offline wallet.
Bitcoins may be purchased from regulated exchanges or directly from other people who choose to sell them. You can pay for your purchase in a variety of ways, including in cash or wire transfers, depending on the source from which you are purchasing them as well as the regulations of the area in which you live.
The first step in obtaining Bitcoin currency is to get a Bitcoin wallet, so you have a place to store the new Bitcoins you purchase. In the world of cryptocurrency, this is called a “wallet”, but you could really just think of it like a bank account.
You have two main options for a wallet. The first is a software wallet, which is stored on the hard drive of your personal computer, and the second is a online wallet, provided through a web-based service. Both of these options have their respective pros and cons. If you use a software wallet stored locally on your computer, you need to back up your wallet regularly and risk losing information if your drive became corrupted. If you use an online wallet, you need to decide how much you trust a given website’s security measures, which vary greatly between services.
One popular online wallet option is Coinbase, which will trade your dollars (USD) for Bitcoin, and also offers web and mobile (Android) apps. Another popular option is Blockchain.info. Blockchain does not exchange fiat currency (USD, Euro, etc.) for Bitcoin, but is available as an Android app.
Finding the best exchange for your needs will depend on where you are located, so we recommend checking out our list of major exchanges across the globe and payment options they offer, as well as our article about how to buy Bitcoins in the UK. Currently, the largest full exchanges offering Bitcoin services are Coinbase (US), Bitfinex (Hong Kong), Bitstamp (Slovenia), BTC-e (Eastern Europe), Kraken (US), Huboi (China), OKCoin (China), and BTC China (China).
Once you have your wallet setup and a few Bitcoin in your pocket, you should follow along with Bitcoin analysis, forecast, and trading ideas to maximize your BTC earnings.
As a part of the process of setting up your account at any of these exchange services, you will likely be required to link it with an existing bank account and arrange to move funds between the two accounts using a wire transfer service. This usually involves a fee, but there are a few exchanges that allow you to make deposits in person to their accounts (meeting with a human teller, rather than an ATM).
While you may be able to transfer money between various countries, international money transfers will often require additional fees and have longer delays in service. Additionally, if the exchange with which you are registering requires you to register a bank account, it will only allow you to register a domestic account.
While it is most certainly legitimate to trade bitcoin directly on any of the aforementioned exchanges, some traders might find it advantageous to use a third party trading platform which allows for more functionality, customization, and faster execution. This works by inputting the API information for your exchange account into the platform settings. This process is very simple.
If you are interested in utilizing such a platform, we recommend using RTBTC.com. RTBTC.com is a subsidiary of Blockchain.info and uses the ZeroBlock App (Android, iOS) and Zeroblock.com for realtime news and pricing information. You can signup for a free trial at RTBTC.com. Give it a try!
A few warnings about exchanges, wallets, and banks
Even though they have rather extensive proof-of-identity requirements, it is important to remember that exchanges and wallets are not regulated the same way that banks are. If the exchange went out of business or was hacked, you have no insurance on your account and could lose your holdings altogether.
Furthermore, Bitcoin does not have the same legal status as most currencies throughout the world, so government authorities generally don’t know how to handle Bitcoin theft.
A few larger exchanges have, in certain situations, replaced customer funds after a theft that originated from the exchange itself, but exchanges are not legally required to do take such action.
Additionally, if you are the victim of theft from your personal wallet due to security or password problems on your part, you have no guaranteed method for recovering any portion of the stolen currency.
Face-to-face trades are also known as over the counter (or OTC) trades, and they take place between individual customers and local sellers, without the involvement of an exchange or an online service. If you live in a city of considerable size, prefer anonymity in your trades, and don’t want the hassle of dealing with a bank, then face-to-face trading may be the best option for you.
There are websites (localbitcoins.com) where face-to-face transactions are arranged and prices are negotiated. They often also use an escrow service, which provides an added layer of protection for all involved parties.
It is important to take necessary precautions when engaging in an OTC trade. Always arrange to meet and conduct the trade in a busy, public place, and avoid meeting in private homes or workplaces. Take any precautions you would normally take when carrying large amounts of cash on your person. You’ll also need access to an internet connection in order to confirm the trade, so make sure you meet somewhere where you will be able to have internet access to your Bitcoin wallet.
While exact exchange rates will vary from seller to seller, you can usually expect to pay 5-10 percent more for a face-to-face transaction than you would on an exchange. You pay this extra money for the added privacy. Most reputable traders will negotiate the price for the transaction before meeting up, but also don’t want to wait very long between agreeing on the price and actually meeting. Some sellers may allow you to use PayPal, but most prefer nonreversible money transfer methods or cash.
If you are uncomfortable with the thought of buying and storing large amounts of Bitcoin, one good option for you may be to look into investment trusts, like the Bitcoin Investment Trust (BIT), which invests exclusively in Bitcoin and then safely stores them on behalf of its shareholders. Up to this point, only extremely wealthy investors have been able to invest in the trust, but by the end of this year, should be open to all investors.
Bitcoin ATMs are a new concept and only a few exist, but the ones that do exist are popular and convenient. More will be coming soon from a variety of vendors. This is like an automated version of a face-to-face transaction. You put in cash and receive a paper receipt that contains the codes you need to load your new Bitcoins to your wallet. You will need to have a Bitcoin wallet (online or locally stored) to use the ATM.