How To Buy Bitcoins

I’ve spent the last several days researching different ways of getting Bitcoins. It’s been a long slog as there’s a lot of sites to wade through, and in posts to follow are the ways I’ve come across, with their pros and cons.

Buying Bitcoins, as it turns out, isn’t easy. Well, not if you’re outside the USA. And when you do get some Bitcoins, you need a wallet to keep them in.

The exchanges are the obvious places to start but these require you to provide proof of who you say you are, so that means providing copies of government-issued documents like a Passport or Driver’s License along with a copy of a utility bill with your name and address on it to show you live where you say you do.

The waiting time for becoming a verified member/customer is about 10 days, not good if you’re in a rush to buy Bitcoins. The price of coins could rise substantially in that time so you need to register and get verified as quickly as possible.

The exchanges my research has revealed to be the best, most reliable, long-standing and trusted are:

  1. Mt. Gox (based in Japan, this is the oldest Bitcoin exchange). It actually stands for Magic The Gathering Online Exchange; so it became a Bitcoin exchange after it was something else. You cannot fund your account to buy Bitcoins until you have been verified. I’m still waiting to be verified here.
  2. BitStamp (based in the UK). You cannot fund your account to buy Bitcoins until you have been verified. I’m still waiting to be verified here.
  3. BTC-e (based in Bulgaria). No verification here and prices are lower than on the other exchanges. However, buying if you’re outside of Eastern Europe is difficult. You can pay by International Wire Transfer (which will incur costs of its own) or you can pay by credit card. Payment pages are in Russian however, and don’t look like Western payment pages. You might also be leery of giving credit card info to an East European payment system.

    Here’s a video that explains the process for funding a BTC-e account by credit card:

  4. Local Bitcoins – Buy and sell Bitcoins for cash locally (where you live) or online. Haven’t tried this one myself.
  5. Coinbase – this is the best-known online Bitcoin wallet service. If you’re in the USA, it’s easy to buy Bitcoins through bank transfers. Not so easy if you’re outside the USA (as I am).

Each service charges transaction fees and 2% is considered to be high when exchanging currency for Bitcoins. So far, I haven’t been able to buy any Bitcoins myself as I’m still waiting to get verified by BitStamp and MT.Gox. I’m still looking for other ways of buying through European exchanges via bank transfers or (preferably) by credit card.

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