How to Buy Bitcoin (Beginner’s Guide)

BITCOIN BUYERS GUIDE

We’ve put together this no nonsense step-by-step guide to get into Bitcoin using whatever payment method you’d like. 

It’s comprehensive and easy to understand, no crypto dictionary required. 

Buying Bitcoin: Important Factors

There are three important factors to consider when buying bitcoin. Depending on your situation there are trade-offs between these factors, and each of them can also have an impact on the fees you'll pay to get the bitcoin.

how-to-buy-bitcoin-3-factor-infographic-1

Where you are (Country)

There are bitcoin exchanges that operate in most countries around the world and each country and locality has its own views on bitcoin and transacting via cryptocurrency. Understand the legal restrictions based on your country of residence to get a better sense of how you can best make a bitcoin purchase.

Impact on fees – Due to local regulations, some exchanges charge higher fees depending on the country. Also, some exchanges only allow deposits in certain currencies (USD, CAD, EUR, etc) so it may be necessary to pay fees in your local currency as well.

 

How you want to pay for it (Payment Method)

Depending on the exchanges available in your country, each will take various forms of payment to purchase bitcoin. Options can include debit card, credit card, bank account, wire transfer, Paypal, and cash.

Impact on fees – Typically the more convenient options, such as credit cards and debit cards, come with higher fees as the banks charge the exchanges for these types of transactions and the exchange passes those fees on to you.

 

How quickly you want it (Speed)

While a bitcoin transaction takes very little time to get verified on the blockchain, this does not mean buying bitcoin is fast. Some payment methods can be instantaneous, while others can take weeks due to long account verification and withholding times.

Impact on fees – Transaction fees for bitcoin are dependent on how busy the network is. If more people are buying and selling bitcoin, the cost to transact goes up. The opposite is true if the network is less busy. Fees are also tacked on by Bitcoin exchanges (in some cases the fees are hidden, depending on the type of payment being used).

INTRO TO EXCHANGES

Bitcoin exchanges are considered the easiest option to buy bitcoin because they don’t require downloading any software or learning much at all. They are websites that typically have easy-to-use interfaces that you can log into.

Most exchanges allow users to hold their bitcoin within the exchange itself. These, however, are always at risk of theft, as the keys to your crypto are held by the exchange, which is itself a centralized entity susceptible to hacks.

Since they’re such a prime target, several crypto exchanges have been hacked, resulting in the loss of millions of dollars worth of coins.

Grizzle recommends moving your bitcoin onto a hardware wallet after purchasing your bitcoin on an exchange. Check our our wallet reviews here to find the best wallet to suit your needs.

3 Things to Check When Deciding on an Exchange

Percentage of coins stored on exchange – The less coins stored on the exchange, the less susceptible you are to losing your coins in the event of a malicious attack.

Advanced security – If the exchange offers added security features, such as data encryption and Two-factor authentication (2FA), your crypto will be much safer. Grizzle always recommends enabling 2FA if the option is available.

Funding and withdrawal options – Most exchanges offer several options for converting your fiat (USD, CAD, GBP, EUR, etc) into bitcoin. For each type of funding/withdrawal option there is typically different levels of verification required, daily or weekly limits and fees. Also, certain funding/withdrawal methods can impact the speed at which you can buy (or withdraw) bitcoin from the exchange depending on how the exchange treats anti-money laundering regulations in your location.

Check out our exchange reviews to find detailed reviews of the top crypto exchanges based on our rigorous 10-point rating system.

Deciding on a crypto ethereum exchange infographic

Why We Recommend Coinbase for Beginners

One of the easiest places to obtain bitcoin is through Coinbase.

It’s also one of the most secure because they only store 2% of their crypto on the exchange, they provide advanced security, including 2FA, and if your coins did get stolen they’re insured up to $250,000 through FDIC insurance (for American customers only).

Below are steps on how to obtain a Coinbase account and buy bitcoin with credit card, debit card or bank transfer/wire.

HOW TO BUY BITCOIN WITH CREDIT CARD

One option for purchasing bitcoin is by using a credit card. Credit card purchases can often be a fast way to purchase cryptocurrency, however, they’re also the most susceptible to hidden charges since all banks handle cryptocurrency transactions differently.

Some banks apply chargeback fees, while others add a fee for a cash advance, which is required to make an exchange transaction.

If you’re concerned about this, make sure to check with your bank to understand all applicable fees before making a credit card purchase.

There are already many restrictions to purchasing cryptocurrency via a credit card, with many banks and credit card companies limiting or restricting purchases altogether.

KNOWN CREDIT CARD RESTRICTIONS

BANK/CREDIT CARD COMPANYRESTRICTION
DiscoverBanned all cryptocurrency purchases
Capital OneBanned all cryptocurrency purchases
TD BankBanned all cryptocurrency purchases
ChaseBanned all cryptocurrency purchases
American ExpressLimited to purchases of $200 per day
Not accepted at all exchanges

Purchasing Bitcoin with a Credit Card (Coinbase)

Credit cards provide a fast, easy method of deposit and payment to use on cryptocurrency exchanges around the world. One such exchange that provides easy credit card deposits is Coinbase.

Visit Coinbase.com to sign up (use this link to get a $10 sign-up bonus).

Looking for step by step instructions to buying bitcoin on Coinbase? Click here to visit our Coinbase User Guide and follow the steps all the way from signing up to coinbase to setting up your payment method and purchasing bitcoin.

HOW TO BUY BITCOIN WITH DEBIT CARD

Purchasing bitcoin using a debit card is fast and simple, and oftentimes circumvents the hidden fees that can come with purchasing through a credit card – debit card purchases are viewed as cash purchases so they do not incur the same fees as credit cards.

Additionally, many banks that restrict credit card purchases allow debit card purchases to be made without the same restrictions. Make sure to check with your bank and/or debit card processor to ensure you’ll be allowed to make a debit card payment to purchase bitcoin.

Purchasing Bitcoin with a Debit Card (Coinbase)

The process for buying bitcoin via a debit card on Coinbase is the same as purchasing via credit card, but without the worry of hidden fees associated with credit card transactions.

Visit Coinbase.com to sign up (use this link to get a $10 sign-up bonus).

Looking for step by step instructions to buying bitcoin on Coinbase? Click here to visit our Coinbase User Guide and follow the steps all the way from signing up to coinbase to setting up your payment method and purchasing bitcoin.

HOW TO BUY BITCOIN WITH BANK ACCOUNT / WIRE TRANSFER

Purchasing bitcoin using a bank account is generally cheaper than other options.

However, wire transfers can often take several business days to process, making it a poor option for those looking to make purchases quickly.

Further, wire transfers are often reserved by exchanges for their preferred customers who buy large amounts of crypto.

Purchasing Bitcoin with Bank Account / Wire Transfer (Coinbase)

Coinbase also offers user the ability to purchase bitcoin through a bank account or wire transfer.

Visit Coinbase.com to sign up (use this link to get a $10 sign-up bonus).

Looking for step by step instructions to buying bitcoin on Coinbase? Click here to visit our Coinbase User Guide and follow the steps all the way from signing up to Coinbase to setting up your payment method and purchasing bitcoin.

HOW TO BUY BITCOIN WITH PAYPAL

PayPal is another great way to purchase bitcoin because of its ease-of-use and speed of transacting.

Virwox offers a great platform to purchase bitcoin via Paypal. Historically, PayPal dealt with many issues of falsified chargeback claims resulting from bitcoin purchases.

However, recently they have been more optimistic about Bitcoin and are allowing PayPal merchants to accept the digital cash as a form of payment.

Signup

Registering on Virwox is fast, and only requires name and email address information.

You will be sent a confirmation email that includes your temporary password. This is the password you will use to log in to your Virwox account for the first time. This password can be changed upon logging in.

Payment Method

After logging in to your account, select the Deposit option from the left-hand side navigation panel.

Scroll down to the PayPal Express checkout option and select the amount of money you would like to deposit. Note that there is a limit to the amount of money that can be deposited via PayPal depending on the currency being used.

After selecting to checkout with PayPal you’ll be taken to the PayPal payment processing site where you’ll confirm the transaction and payment method.

Confirm the information for your deposit is correct and click ‘Continue’ to complete the transaction.

Purchase Cryptocurrency

Purchasing bitcoin on Virwox is a two-step process because you first have to buy Second Life Linden dollars (SLL), which you can then exchange into bitcoin.

Enter the USD equivalent amount that you want to convert from your fiat deposit and click ‘Next’ to purchase Second Life Linden dollars (SLL).

After you have received SLL, exchange it for bitcoin. Navigate to the SLL/BTC coin pair on the left navigation panel.

Enter the amount of bitcoin you would like to purchase and click ‘Next’ to complete your order.

HOW TO BUY BITCOIN USING AN ATM

With more and more consumers using bitcoin for everyday purchases, ATM machines have sprung up around the world, allowing bitcoin users to exchange fiat currency for bitcoin.

ATMs are a great way to purchase bitcoin for newbies who aren’t yet comfortable using an online exchange or for those wanting to get bitcoin quickly.

The downside is that they have high fees and can be a far drive away if you don’t live in a major city.

Transactions can be completed in less than one minute and are very straightforward for the uninitiated.

Also, if a user does not have a bitcoin wallet, most Bitcoin ATMs will create a paper wallet for the user to take with them immediately after their purchase.

Fees from using a Bitcoin ATM can run the gamut, but generally fall in the 8-10% range. On top of the high fee, Bitcoin ATMs are typically give you a worse exchange rate than using a Bitcoin exchange so you can get slammed on both the exchange and the fee.

You can use the Coin ATM Radar to search for the Bitcoin ATM nearest you.

It’s important to note that two-thirds of all Bitcoin ATMs only allow users to purchase bitcoin with fiat currency, with functionality to sell bitcoin in exchange for fiat a much less common function.

Genesis Coin

With almost 850 ATMs around the world, Genesis Coin is the farthest-reaching Bitcoin ATM provider in the world.

The company Genesis Coin Inc. offers multiple types of Bitcoin ATMs, with some only offering Bitcoin purchases, and others offering two-way services to purchase or sell Bitcoin for paper currency.

Genesis Coin follows know-your-customer (KYC) regulation, and will require fingerprint scanning for user verification, a major downside for anyone looking to make an anonymous purchase.

Coinsource (Grizzle Recommended)

One of the most well-known Bitcoin ATMs, Coinsource offers a mobile wallet application and free first trade via the ATM.

Rates of 8% for bitcoin purchases and 4% for selling coins are better than many other ATMs.

Coinsource has a good number of terminals to choose from in the most major cities around the globe.

You can find your closest Coinsource ATM here.

Purchasing Buy Bitcoin From a Coinsource ATM

Enter the amount you would like to spend on your bitcoin purchase.

You will then be asked to verify your identity via your phone number. Enter in your phone number on the ATM keypad.

A code will be sent to your mobile device. Enter the code at the ATM to finish the identity confirmation.

coinsource-atm-code-phone-1

Next, you will need to tell the ATM where you would like the bitcoin to be sent.

Options include scanning a QR code wallet address, creating a new wallet, or typing in a wallet address.

For using a QR code scan the appropriate code in the ATM barcode scanner below with your mobile wallet (e.g. Jaxx).

If you cannot use the scanner correctly you always have the option of printing out a new paper wallet where the purchased bitcoin will be sent.

Insert the amount of fiat currency you would like to use in your purchase and press ‘Finish’.

The bitcoin will be sent to the address listed on the screen.

After your transaction is complete you can collect a paper or email receipt if desired.

HOW TO BUY BITCOIN ANONYMOUSLY

The original intention of Bitcoin, as described in the Satoshi Nakamoto whitepaper, was a decentralized, anonymous digital currency

However, with the advent of third-party exchanges taking over the Bitcoin industry, it has become increasingly difficult to purchase bitcoin anonymously, without user identity information being made public.

An anonymous purchase of bitcoin means:

  • Bitcoin is exchanged from seller to buyer with no personal info attached
  • Transaction is completed on a peer-to-peer network or in person, not through a third party
  • There is no history of the transaction that can be traced back to an individual identity
how-to-buy-bitcoin-anonymously

There are hundreds of bitcoin exchange services popping up daily, claiming to offer anonymous bitcoin purchases.

However, only a few actually allow for anonymous purchasing done on a peer-to-peer basis.

Purchasing Bitcoin Anonymously on LocalBitcoins.com

If you want to buy bitcoin anonymously we recommend LocalBitcoins.com.

Read our in-depth review and user guide for buying bitcoin anonymously on Localbitcoins.com here.

HOW TO BUY BITCOIN WITH CASH

When purchasing bitcoin on a peer-to-peer exchange like LocalBitcoins, the crypto is transferred directly between users so the exchange does not ever hold the cryptocurrency, and it’s therefore not susceptible to a hack or theft

Transactions can also be done anonymously between users and don’t require giving personal information or a lengthy verification process, making it a quick way to get crypto.

A direct peer-to-peer exchange with little to no transaction fees, LocalBitcoins.com is an ideal place to purchase bitcoin with cash in the most anonymous, secure way possible.

However, using cash to purchase bitcoin via a peer-to-peer exchange will require more trust than with other methods because if you’re meeting someone in person you never know who it is you’re meeting and it can lead to theft.

Also, there is very little liquidity when it comes to cash purchases (and buying bitcoin anonymously also comes at a premium) so you’ll have to scour the site to find the best possible transaction and exchange rate.

Purchasing Bitcoin with Cash on LocalBitcoins.com

Visit localbitcoins.com to sign up.

Looking for step by step instructions to buying bitcoin on LocalBitcoins.com?

Click here to visit our Coinbase User Guide and follow the steps all the way from signing up to Coinbase to setting up your payment method and purchasing bitcoin.

HOW TO BUY BITCOIN INSTANTLY

Another issue when buying bitcoin is the amount of time it takes to get up and running on an exchange.

A general process for purchasing bitcoin can go something like this:

  1. Register for an exchange
  2. Verify email address
  3. Update account with personal information
  4. Upload picture of government-issued ID and/or selfie picture holding ID
  5. Approval of ID verification, which can take up to a month or more depending on how busy the exchange is
  6. Deposit fiat currency
  7. Wait 1-10 business days for fiat processing time
  8. Purchase bitcoin with fiat currency

This process is by no means instant, and when all is said and done can take upwards of a month or more to complete.

The longest piece of this process is verification for know-your-customer (KYC) and anti-money laundering (AML) laws, which are reported to the federal government.

There are, however, options to buy bitcoin instantly.

Certain exchanges have found ways to instantize the lengthy process.

If you want crypto fast it’s typically best to stick to exchanges that are from your home country since they’re more likely able to quicken the verification process.

Recommended Exchanges for Instant Bitcoin