How to Buy Bitcoin (2023) – The Proper Ways to Invest in Bitcoin

The cryptocurrency industry has received a lot of attention lately in the financial and investment world with the blockchain-based digital currency experiencing some crazy ups and downs during last year’s skyrocketing price craze. However, many people still do not know how to buy Bitcoin. Today’s article will guide you through the various methods and steps for you to buy bitcoin.

How to Keep Bitcoins?

Before you purchase Bitcoin, you need to make sure you have a proper arena to keep your Bitcoins. Unlike cold hard cash, Bitcoin is not something physical and requires a digital wallet to hold your Bitcoin. A Bitcoin wallet comes in a variety of forms providing Bitcoin owners with different kinds of safety, storage, and access options.

An important thing to know is that your Bitcoin wallet does not technically store your Bitcoins. Rather, it holds private keys that are essential for you to access your Bitcoin address and to spend it. Those digital keys are required to sign a transaction and if you happen to lose those keys, you’ve essentially lost access to your Bitcoins.

Types of Bitcoin Storages

Desktop

A desktop wallet is installed onto your computer which offers users complete control of the Bitcoins and relative budget safety. Bitcoin desktop hardware wallets come in two variants: thick and thin. A thick desktop option allows users to further enhance their safety by downloading network blocks and to control their authenticity.

Owners can even provide independent security management of their Bitcoins. A thin option on the other hand does not require owners to download blocks and can be easily downloaded onto a portable device, such as your mobile phone.

Mobile

The main advantage of a Bitcoin mobile wallet is that you’re always able to keep your Bitcoins on hand. It also offers a convenient way of paying for goods with Bitcoins simply by scanning the QR-codes within.

Some even let users take advantage of their smartphone’s near-field communication (NFC) feature to tap the phone against a reader to make a Bitcoin transaction without entering any information at all.

Something to note is that these options are not full Bitcoin clients as a full Bitcoin client is required to download the entire Blockchain, which is constantly growing and requires several gigabytes of storage.

Online

Bitcoin owners can also choose to get a web-based wallet to store their Bitcoin private keys online, on a server controlled by someone else. Although this way gives you easy accessibility to your Bitcoin from any device anywhere in the world, it does run a risk of the server being hacked or the organization running the service taking control of your Bitcoins at any time.

However, that risk can also be significantly reduced by implementing a few security measures.

Hardware

Bitcoin hardware wallets are portable devices that hold private keys and can help facilitate Bitcoin Transactions. These are different kinds of hardware, but all of them allow users to carry almost any amount of bitcoin in their pockets.

Paper

A Bitcoin paper wallet might be old school, but it is perhaps the safest way for Bitcoin storage. It is basically two QR-codes generated by a designated service. One code is a public key address that can be used to receive or buy BTC while the other is a private key for you to spend your Bitcoins.

Where Can You Buy Bitcoins?

We’ve talked about how to keep Bitcoin, now we’ll talk about where you can go to trade or buy Bitcoin. Buying Bitcoins is not as easy as you might expect but you need not worry as the number of options to buy Bitcoin is quickly increasing. Now everyone can choose the perfect option to buy Bitcoin according to their needs, some of which don’t even require access to the internet or a wallet.

Bitcoin ATMs

Bitcoin ATMs are a very new concept. However, their number is constantly growing and has started to appear in different countries. The Bitcoin machine works similarly to a normal ATM but it charges a commission of three to eight percent on top of the normal exchange price.

Though the exchange fees are a little high, they do provide Bitcoin owners with the most private way to buy Bitcoin.

All you need to do is insert cash into the Bitcoin ATMs and the Bitcoin machines will generate either a mobile wallet QR code or a paper receipt with the codes and instructions on how to transfer the Bitcoins. With the increasing popularity of Bitcoins, such Bitcoin ATMs also have the potential of becoming one of the most common ways for you to buy Bitcoins.

You can find the nearest Bitcoin ATMs via a designated map service such as the CoinATMRadar. Obviously, Bitcoin ATMs will not appear in countries where Bitcoin is banned or outlawed and you’ll need to find other ways to buy Bitcoins.

Bitcoin Gift Cards

Bitcoins can also be purchased in the form of gift cards. This method is anonymous and can sometimes even be cheaper than using cash. The Bitcoin gift cards themselves can even be traded for BTC and all you need to do is purchase any retailer’s Bitcoin gift card, log into the Bitcoin exchanges that accept gift cards, and complete the purchase.

Depending on the seller, some might even require an actual image of the Bitcoin gift code at the back of the card as well as the payment receipt from the store you purchased from. Others may not be so fussy and only need an online or e-code.

Once you’ve opened a purchase, the bitcoin you want to buy will be held by the website until the transaction is confirmed, this way you won’t have to worry too much about giving the seller your gift card information.

Other than that, there are also a lot of online retailers that sell Bitcoin gift cards for up to 60% of their value, making Bitcoin gift cards a way to save you plenty of money. These are also a great way of storing bitcoins, considering how its value constantly fluctuates.

However, as with any other ways of buying Bitcoin, you always need to be wary of scammers trying to steal money from you and to make sure you buy Bitcoin from trusted sellers.

Bitcoin Exchanges

Searching how to buy Bitcoin online will result in an array of Bitcoin exchanges competing for your business. However, choosing the right exchange will depend on many different factors such as location and payment methods available. A bitcoin exchange also has to be regulated by the government to meet “know your customer” and anti-money laundering requirements.

This is why you will find yourself stuck in a lengthy bureaucratic procedure just to set up an account and start buying Bitcoins. Most Bitcoin exchanges will require you to connect to an existing bank account before they let you buy Bitcoins, which usually requires you to provide detailed personal identification information. This also means that Bitcoin buyers won’t be able to maintain their anonymity.

However, exchanges do offer an unparalleled choice of ways to buy and sell Bitcoins. Whether you need a full-blown exchange platform for institutional traders or just a simpler solution for a one-time purchase, you’ll certainly find a suitable Bitcoin exchange to suit your needs.

Furthermore, most Bitcoins exchanges can be accessed easily through desktops and mobile devices to let you exchange or buy Bitcoins from anywhere including different countries.

However, the exchanges vary in terms of payment methods they accept, security levels, buying limits, fees, verification requirements, and so on. So, do make sure you go through the features offered by these exchanges before deciding on which to open an account. Below is a brief comparison list of exchanges available for you to buy Bitcoins and make Bitcoin transactions.

Top Crypto Trading Platforms For Bitcoin in 2023

1. Kraken

One of the Largest Exchanges for Euro Volume & High Liquidity

• Payment Methods: Bank Transfer, Altcoins, Credit Card, PayPal
• Safety Feature: 2-Step Verification, Master Key for Account Recovery, Global Setting Lock, Email Encryption
• Verification Levels: Full Name, Date of Birth, Country, Phone Number, Address Verification
• Fee: 0.16% – 0.26%

2. Coinbase

Largest Exchanges to Buy Bitcoins

• Payment Methods: Wire Transfer, Bank Account, Bank Transfers, Credit Card, PayPal
• Safety Feature: Vault Feature, FDIC Insurance for US Residents, Cold Storage
• Verification Levels: ID Scans for Identify Verification, Credit Card Verification for Raising Limits
• Fee: 1.49% – 3.99%

3. BTCC

One of the Best Exchanges in Hong Kong, China to Buy Bitcoin

• Payment Method: Bank Transfer, Credit/Debit Card, PayPal
• Safety Feature: SSL Encrypted Traffic, Real-Time Internal Controls, Cold Storage
• Verification Levels: ID Scans Verification Details
• Fee: 0.01% – 0.2%

4. GDAX

Best Site to Buy Bitcoin for Serious Traders

• Payment Method: Bank Transfer, Debit and Credit Card, PayPal
• Safety Feature: 2-Step Authentication, Encrypted Email Service, Cold Storage
• Verification Levels: ID Scans
• Fee: 0.01% – 0.25%

5. Gemini

Best Regulated Exchanges to Buy Bitcoin

• Payment Method: Bitcoin, Ethereum, Bank Account/Bank Transfer, Debit Card, Credit Card, and ACH
• Safety Feature: 2-Step Authentication, FDIC Insurance for US Residents, Cold Storage
• Verification Levels: Identity Scans
• Fee: 0.25%

6. BitFlyer

Best Japanese Crypto Site to Buy Bitcoin

• Payment Method: Debit Card, Credit Card or Bank Account/Bank Transfer, Bitcoin, PayPal
• Safety Feature: Real People Verify Bitcoin Transactions, Cold Storage
• Verification Levels: Email Require, More Features will Require Additional Verification Details
• Fee: 0.01% – 0.15%

7. BitStamp

The Best Advanced Trading Platform to Buy Bitcoin

• Payment Method: Wire or Bank Transfer, Credit Cards, SEPA Transfer, SWIFT Transfers
• Safety Feature: 2-Step Authentication, Exchange Regulated by Commission de Surveillance du Secteur Financier
• Verification Levels: Identity Scans, Proof of Residency
• Fee: 0.1% – 0.25%

8. Bitfinex

Best Versatile Crypto Platform that Accepts Various Kinds of Coins to Buy Bitcoin

• Payment Methods: Debit Card or Bank Account/Bank Transfers, Ethereum, Dash, Monero, ZCash, PayPal
• Safety Features: 2-Step Verification, Universal 2nd Factor, Withdrawal Protection Advanced API Key Permissions, Email Encryption
• Verification Levels: Not required to make a deposit with cryptocurrencies; Deposits in USD or EUR require ID verification
• Fee: 0% – 0.1%

9. ItBIt

Best Free Site to Buy Bitcoin

• Payment Method: Bank Transfer, PayPal
• Safety Feature: 2-Step Authentication, FDIC Insurance for US Residents, Cold Storage
• Verification Levels: Identity Scans and Proof of Residency
• Fee: None

Besides trading services, most exchanges also have a BItcoin storage function to help you hold Bitcoin; however, it is probably considered as the least reliable way of storing your Bitcoin. Despite being a regulated financial institution, BTC exchanges don’t necessarily provide the same level of protection as normal banks do.

These online trading exchanges are prone to hacker attacks or can simply go out of business while holding onto your Bitcoin.

Although exchanges are the go-to option for users who wish to engage in regular operations with Bitcoin, the bureaucracy, potential risks, and lack of anonymity associated with exchanges make it unfavorable for some traders.

Peer-to-Peer (P2P)

If you prefer to keep your trades anonymous and not want to deal with banking complications or risks associated with an online purchase, then a face-to-face trade with a local seller may be the best way for you to buy Bitcoin.

Out of the numerous websites and forums, LocalBitcoins is the most popular platform for facilitating such Bitcoin purchases. The company even provides an escrow service to protect both parties and their Bitcoins even more.

When Bitcoin just started out, such trades would normally happen in the seller’s house. However, with Bitcoin’s increasing popularity and people being more wary of scammers and these Bitcoin trades now often take place in public places. Nonetheless, both parties should still take all the precautions they’d normally take when carrying and exchanging big amounts of cash.

Other than that, the buyer will also need access to their wallet to confirm the transaction, hence having a smartphone or laptop with you that has active internet access is another thing to consider.

Those who are not keen to have a one-to-one meeting can always look for local Bitcoin meetup places to purchase Bitcoin within a group environment and also to enrich the BTC knowledge in the process. You can easily find information on such meetings on meetup.com or other similar websites.

You can even choose to not meet a seller face to face. Some people are open to letting you trade bitcoin over the internet. But you will need to be extremely careful with this as you run a massive risk of losing your money to the seller if you happen to encounter a scam.

There is also always another way of using PayPal services to guarantee the reception of goods before releasing the money. But most sellers still prefer non-reversible hard cash due to the frequent fluctuation of the Bitcoin value/price.

Depending on sellers, you may also need to pay between 5 – 10% fee for privacy and convenience on top of the original exchange price. Some sellers may allow negotiations for the overall price before meeting while others will stick to selling Bitcoins at the exact rate established during the transaction to protect against a dramatic shift in the Bitcoin’s value right before the trade.

Investment Trust

An investment trust is a collective investment of multiple investors’ money pooled together to form the sale of a fixed number of shares which the trust issues. With the appearance of Bitcoin in the limelight of the financial world, it does not come as a surprise to see the emergence of more BTC-focused investment trusts.

Bitcoin Investment Trust (BIT) is the first-ever publicly traded Bitcoin-related investment vehicle that lets people gain exposure to Bitcoin without needing to buy or store it directly. BIT exclusively invests in Bitcoin and gets its value solely from the price of BTC.

Since its establishment, the company has quickly expanded by 1,600% to reach a market value of 1.8 billion dollars. Despite the great performance numbers, some still think that the Bitcoin industry is just a bubble about to burst.

Nonetheless, BIT is the first of its kind – a fact which has contributed massively to its inflated price valuation. While other similarly-structured organizations are entering the market, BIT remains to be the only big player in the industry.

As the Bitcoin market evolves, there will certainly be more of such firms entering the game which will not only take the pressure off BIT but also solidify Bitcoin’s status as a globally-renowned currency.

Steps to Buy Bitcoin

Step 1. Find a reliable wallet

Digital wallets let you store your Bitcoin until you’re ready to spend them or exchange them for another currency. As discussed above, these differ in terms of the level of safety and features. For those who are just starting out, it is recommended for you to go for a service that comes automatically provided to you by an exchange.

Nonetheless, most people prefer to set up a wallet that’s not linked to a crypto-exchange. This is to ensure that they still have access to their Bitcoin even in the event where the exchange experiences overwhelming traffic or site closure.

Step 2. Choose the Right Bitcoin Trade

The best way to buy Bitcoin would be to go through an exchange. The internet has a number of exchanges available and they vary in terms of performance. Some are less trustworthy than others while others may have limited functionalities. Hence, it is important to pick the right exchange.

Step 3. Select your payment method

Exchanges often accept a variety of payment options, such as direct bank transfer from your bank account, via credit or debit card, or even PayPal. Though a payment method must be linked to your account in order for you to start making a Bitcoin trade.

Step 4. Buy Bitcoin and store them

Exchanges will give you information on how much Bitcoin or the fraction of a Bitcoin you can buy for a specific sum of money. Knowing Bitcoin’s volatility, the Bitcoin price can change dramatically by exchange and moment to moment.

To buy Bitcoins, you just need to input how much Bitcoin you want to buy in the provided field and just click on the ‘buy’ button. Alternatively, you could also place a limit order that will let you set a certain price you’re willing to buy and the transaction will happen when the Bitcoin value matches the price.

Once you’ve completed the purchase online, your newly acquired Bitcoin will be automatically transferred into your exchange for storage. You should then seek ways to transfer these funds to the address of the Bitcoin wallet you’ve created.

The transfer will require a small fee to move the Bitcoin out of your exchange but that’s basically part and parcel of Bitcoin transfers. Other than that, the Bitcoin transfer process may also take some time, particularly during peak hours. It is not uncommon to require up to an hour or two to complete a purchase.

Conclusion

Bitcoin is a growing industry that many are investing in. Sellers all around the world are quickly jumping onto the wagon to buy Bitcoins. However, buying Bitcoins may not be a straightforward process.

There are few ways to buy Bitcoin and among them is via an exchange. Some exchanges accept credit card, debit cards, PayPal, and even wire transfer. If you prefer to purchase Bitcoin with cash, you can opt to look for the nearest Bitcoin ATM.

Regardless of which method you choose to buy Bitcoin, you should always be careful and pay close attention to site reviews before subscribing to their services. You should also be ready to buy or purchase Bitcoins at a moment’s notice as the virtual currency’s value will fluctuate wildly.

Hence, it is crucial to have your endgame planned out early so that you won’t be in a panicked rush when the time comes. Hopefully, the guide today has provided you with enough information on how and where best to buy Bitcoin.

Frequently Asked Questions

Q: Can you buy things online with Bitcoins?

Yes, you can buy things or make a purchase with bitcoins if the store accepts them. You can easily use your BTC Coins like a credit card to make payments.

Q: What is the easiest way to buy Bitcoins?

The easiest way to buy bitcoins is via credit/debit card. GDAX is probably the fastest and easiest way to buy bitcoins and if you need bitcoins first, then buying with a card is a good way to consider. While you’ll need to be aware of the high processing fees for card purchases, you can get your bitcoins instantly.

Q: What countries are Bitcoins banned?

Bangladesh, Bolivia, Ecuador and Kyrgyzstan have banned Bitcoins, however it seems to have had little effect on the global blockchain network.