Nowadays, it is easy to find where to buy Bitcoin online because there are so many options but if you want to know the best places to buy Bitcoin, keep reading to find out.
Bitcoin was launched in 2009 and today, remains the most popular currency of its kind worldwide. This cryptocurrency took the world by storm as it skyrocketed from obscurity to about $20, 000 per coin value in 2017.
Though the cryptocurrency markets have calmed down a bit since that record, many Bitcoin evangelists still claim Bitcoin to be the currency of the future.
In this post, you will learn all about Bitcoin i.e. what is Bitcoin, how Bitcoin works, and where to buy Bitcoin.
Table of Contents
What is Bitcoin?
Bitcoin is a cryptocurrency that uses peer-to-peer technology for instant payment between people or businesses.
It was created in January 2009 and is the world’s largest cryptocurrency by market cap. Bitcoin can be bought and used as a currency and it is also a type of investment.
Bitcoin is created, distributed, and stored with the decentralized ledger system known as a blockchain.
It is not paper money like dollars, euros, dirhams, or yen by central banks or monetary authorities.
It is the first example of cryptocurrency produced by people and businesses all over the world using advanced computer software that solves mathematical problems.
How does Bitcoin Work?
Bitcoin is a computer-based means of exchange i.e. transfers are made through computer immediately with low transaction fees.
This is how Bitcoin work:
The basics for a new user
As a new user, you don’t have to understand the technical details of Bitcoin before you get started.
All you just have to do is to install a Bitcoin wallet on your computer or mobile phone and create your first Bitcoin address. You can still create more whenever you need one.
You can disclose your Bitcoin addresses to your friends so that they can pay you or vice versa. But know that Bitcoin addresses should only be used once.
Balances – Blockchain
The blockchain is a distributed public ledger on which the entire Bitcoin network relies i.e. all confirmed transactions are included in the blockchain.
The blockchain allows Bitcoin wallets to calculate their spendable balance so that new transactions can be verified. This will ensure they are actually owned by the spender.
Transactions – Private keys
Transactions are transfers of value between Bitcoin wallets that get included in the blockchain.
Bitcoin wallets do keep a secret piece of data called a private key which is used to sign transactions as well as provides mathematical proof that they have come from the owner of the wallet.
The private key also prevents transactions from being changed by someone once it has been issued.
All transactions are broadcast to the Bitcoin network and will be confirmed within 10-20 minutes via a process called mining.
Processing – Mining
Mining is the process of making computer hardware do mathematical calculations for the Bitcoin network to confirm transactions as well as increase security.
It is a distributed consensus system that is used to confirm pending transactions by including them in the blockchain.
Mining enforces a chronological order in the blockchain, protects the neutrality of the network, and allows various computers to agree on the state of the system.
For mining to be confirmed, transactions must be packed in a block that suits very strict cryptographic rules that will be verified by the Bitcoin network.
These cryptographic rules prevent previous blocks from being modified because doing so would invalidate all the subsequent blocks.
Also, mining creates the equivalent of a competitive lottery that prevents people or businesses from adding new blocks consecutively to the blockchain.
This way, companies or individuals can’t control what’s included in the blockchain or replace parts of the block chain to roll back their own spends.
How can I buy Bitcoin?
To buy your first bitcoin, you just need to open an account and verify your identity with a marketplace.
The verification process can take up to minutes to several weeks.
Once you are verified, you can then transfer money through your preferred payment method to buy bitcoin.
Note that you have to set up a wallet to store your bitcoin. Your wallet must be attached to the account where you buy and sell Bitcoin.
Where to Buy Bitcoin
Here are the best places you can buy Bitcoin
Coinbase is the biggest and most reputable Bitcoin platform in the United States. Coinbase offers both an exchange and wallet in one which makes it one of the easiest places to start with Bitcoin.
Though based in the United States, individuals and businesses from other countries can buy Bitcoin here as it is the most trusted cryptocurrency platform in the world today.
This platform also supports Bitcoin Cash, Ethereum, and Litecoin.
Once you signup and connect your bank account, you can then transfer funds in and out of your account easily and convert them to Bitcoin and back to dollars at will.
This Bitcoin marketplace charges a variable percentage fee of 1.49% for transactions in the United States from a bank account or a Coinbase USD wallet. Purchases with a debit or credit card add on a 3.99% fixed fee.
The Coinbase wallet is very secure and can be accessed via the web app or mobile app. The Coinbase wallet also uses two-factor authentication and keeps digital and paper backups of data that are no longer needed in safe deposit boxes and vaults around the world.
Also, cash balances are insured up to $250,000 against theft or a breach in online storage.
Furthermore, Coinbase holds about 98% of customer currencies offline to keep them safe from malicious hackers – this is one of the reasons why it is the most respected and trusted leader in digital currencies.
Binance is a cryptocurrency marketplace with a wide range of digital currencies including Bitcoin, Ethereum, and its own Binance Coin (BNB). This cryptocurrency marketplace charges just 10% for trades.
Binance offers the option to trade coins into different currencies as well as supports digital currencies like EOS, TRON, Skycoin, Ethereum, ICON, Litecoin, Classic, Bitcoin Cash, Stellar Lumens, and much more.
While this platform offers a wide range of currencies at low cost, there’re some bugs reported with the Android mobile app and some users too, have reported delays withdrawing certain currencies.
Coinmama is one of the best places to buy Bitcoin. This platform lets you buy with a credit card, debit card, Apple Pay, or bank transfer.
Buy Bitcoin and other digital currencies like Ethereum, Ripple, and much more once you complete and set up your Coinmama account.
Coinmama also offers a cryptocurrency exchange service whereby you can change digital currencies like Bitcoin to fiat (paper) currencies or for other digital currencies.
CEX is a trusted and secure bitcoin exchange platform. CEX provides an advanced order matching algorithm, a high-quality order book, and a rich variety of trading tools.
You can buy Bitcoin and other cryptocurrencies on this platform by credit card, debit card, as well as bank transfer.
CEX authorization process is quite lengthy and requires a significant amount of personal information.
If you wish to buy large amounts of Bitcoin by bank transfer, you will need top-level verification which involves photographs of several different identification documents, and proof of address.
Bitpanda is also a great place to invest in Bitcoin and other digital currencies.
It is based in Vienna, Austria, and also the leading retail broker for Bitcoin, Litecoin, Ethereum, and more in Europe.
This platform provides new users with the easiest and fastest way to invest in digital assets and cryptocurrencies.
Bitpanda uses state-of-the-art technology this ensures that your funds are 100% secured. They also offer multiple payment options including credit card, Skrill, NETELLER, GIROPAY, Sofort, Amazon Pay, and many more.
Bitstamp has been exchanging Bitcoin since 2011. It is one of the best places to buy Bitcoin and other digital currencies online.
7. Bitcoin ATMs
Bitcoin ATMs or BATMs is a physical kiosk where you can buy Bitcoin. Just like the standard paper money ATM, BATMs allow the insertion of a credit/debit card or cash in exchange for Bitcoin.
These Bitcoin ATMs allow users to buy and sell Bitcoin anonymously. These BATMS charges between 7% and 10% for buying and selling Bitcoin.
Note: You need a wallet to store your Bitcoin and ATMs are just ATMs and they do not offer any kind of wallet storage facility.
8. Coinbase Pro
Coinbase Pro was formerly called GDAX and another great place to buy Bitcoin. Coinbase charges fees between 0.04% – 0.50% based on your trading volume.
Coinbase Pro is best for active traders.
Robinhood began as a fee-free stock brokerage and has recently expanded into the cryptocurrency world.
The best part of buying from this platform is that you don’t have to pay any fees. This means that you can buy and sell Bitcoin and other cryptocurrencies completely fee-free.
This platform supports digital currency trades and market data right in its mobile app.
Your coins are stored in your Robinhood account. Though Robinhood supports trades only on its mobile app, know that you can still trade on desktop.
This is the best site to buy Bitcoin as a beginner. When you sign up with eToro, you get a virtual trading account with $100,000 in it that will let you practice strategies before trading with real money.
eToro also offers trading courses and features a Learning Lab which houses different tools that can support you with your trading experience.
This platform supports deposits and withdrawals to and from external wallets and does not charge any trading fees.
Things to consider before buying Bitcoin
Consider the following before buying Bitcoin:
Most cryptocurrency marketplaces will need you to verify your identity either by uploading a copy of your passport, or a utility bill to prove your residency before you can buy Bitcoins. The verification process can take anywhere from days or even several weeks.
2. Wallet service
A bitcoin wallet is a piece of software where you can store your coins. If you are a beginner, look for marketplaces that provide a wallet service.
Note: Storing Bitcoins in a wallet you manage yourself is safer.
3. Prices & Fees
The price of a Bitcoin is determined only by supply and demand. The rise and fall of the price will depend on a number of people willing to sell and buy Bitcoins.
Different exchanges have different trading fees. So, it is important to make sure you know this information before buying.
When deciding where to buy Bitcoin, consider things like currency. For example, if you transfer GBP to an exchange that only deals in US dollars, you will instantly be charged a conversion fee.
But when you choose an exchange that accepts your currency, you can avoid these fees.
Liquidity depends on the cryptocurrency exchange you use and should be an important factor when deciding which exchange to use.
Liquidity is how many Bitcoins the cryptocurrency exchange can sell before the price is affected.
You can identify how good an exchange’s liquidity is by looking at their trading volume (for example, look at the number of Bitcoins traded in the last month).
The greater the trading volume, the more liquidity the exchange has.
5. Payment method
Before you can actually buy Bitcoin, you’ll need to transfer money to the cryptocurrency marketplace.
Most marketplaces only offer the possibility to deposit money using wire transfer, which at times can take up to a week.
Good cryptocurrency marketplaces offer several payment methods like credit/debit cards, Apple Pay, Amazon pay, etc.
Security plays an important role when buying Bitcoin. A good exchange has security features like two-factor authentication, (2FA), cold storage, and much more.
Different cryptocurrency marketplaces have different speeds when it comes to getting your Bitcoins to your wallet and making transactions.
Some exchanges could take up to five days to get the currency to your account address, while others will be far quicker.
Some cryptocurrency marketplaces differ in terms of platforms available for use. For example, some are only mobile-based, and in a case like this, you won’t be able to manage your money from a laptop or desktop.
Where to buy Bitcoin won’t be an issue anymore as the list above has the best places you can buy Bitcoin.
All you need to do is to specify your requirements and choose an exchange or broker of your liking.
Make sure you choose the right exchange and wallet because if you choose the right exchange and wallet, you’ll enjoy a substantial return on your investment, and you’ll know your funds are safe and secure.
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