Cheapest Way to Buy Bitcoin: What’s the Best Site to Buy Bitcoins
Satoshi Nakamoto created the first Bitcoin in 2009. In the years since then, Bitcoin has changed the way the world thinks about money. Today, all the Bitcoins in the world are worth more than 156billion US Dollars!
Buying your first Bitcoins can be a confusing experience. There are a lot of different places to buy Bitcoin. All these places offer different ways to buy Bitcoin. Each method of buying Bitcoin will have its own fees. Some of the things that can affect the fees you pay are;
Where you live
How you’re paying
What kind of buyer you are
In this guide, I will tell you about the cheapest way to buy Bitcoin. I will include; the best site to buy Bitcoins, the cheapest Bitcoin exchange and how to buy Bitcoin without fees. When you have finished reading this guide, you will be able to decide where you want to buy your first Bitcoins from. You will also know how you want to pay for them.
Before I begin, it’s important for you to know what kind of Bitcoin buyer you are.
What Kind of Buyer Are You?
People have lots of different reasons for choosing where and how they buy Bitcoin. Here are some of the most popular reasons;
Anonymity– Bitcoin allows people to send money to each other directly without using a bank and without having to share personal details with anyone. This is called anonymity. For some buyers, anonymity is the most important reason for buying Bitcoin. This means that they need to find a place to buy Bitcoin where they can stay anonymous!
Community– Some buyers are really interested in cryptocurrency and blockchain technology. They want to be part of the crypto community. For these buyers, it will be important to buy Bitcoin in a place where they can mix with the Bitcoin community. This might be online or in-person.
Ease of Use– How easy it is to buy Bitcoin is very important for crypto beginners. Newbies need to find a place where buying Bitcoin is simple.
Security– Everyone wants to be safe when they’re making a purchase. Some ways of buying Bitcoin are safer than others!
One thing that all these kinds of buyer have in common is that they want to find the cheapest place to buy Bitcoin. So, whatever kind of buyer you are, I can help you find the cheapest way to buy Bitcoin that fits your needs.
One of the most popular places for newbies to buy their first Bitcoins is Coinbase. Is Coinbase the best site to buy Bitcoins? Let’s see…
Buying Bitcoin With Coinbase
Coinbase is a Bitcoin broker exchange. This means it buys Bitcoin for you! All you need to do is open an account here and decide how much Bitcoin you want to buy. To pay for your Bitcoin, you’ll need some fiat currency.
Note: A fiat currency is the legal money of a country. For example, the fiat currency of France is the Euro (EUR).
Coinbase is based in the USA and is available in 32 countries around the world. They include Canada, Australia, Singapore, the United States and numerous European countries that are in the SEPA.
Note: The SEPA is the Single Euro Payments Area. If you live in the SEPA then you can send Euros between SEPA countries quickly and easily. However, if you live in a SEPA country that doesn’t use the Euro as its fiat currency – like Great Britain – then your bank may charge you a currency conversion fee to use SEPA services.
You will pay at least 1.49% of your purchase amount as a fee when you buy Bitcoin with Coinbase. You will pay this if you deposit fiat currency into your Coinbase account before you buy Bitcoin. Coinbase doesn’t charge for deposits of fiat currency made by bank transfer.
Coinbase will charge at least 3.99% of your purchase amount if you use a credit or debit card to buy Bitcoin.
Note: If you use Coinbase in Canada or Australia you will only be able to buy Bitcoin with a credit or debit card.
Is Coinbase The Best Place For You To Buy Bitcoins?
Some critics think that Coinbase operates too much like an online shopping app. If you want to meet the hardcore crypto community, it’s probably not at Coinbase! Coinbase probably isn’t for users who want anonymity either. In February 2018, Coinbase gave the American taxman the account details of 13,000 of its users!
However, Coinbase is a very easy platform to use. It also has a great safety record. Coinbase has never been hacked and around 98% of its funds are stored offline. It’s the perfect place for most crypto newbies to buy Bitcoin.
Let’s have a look at the fees of a couple of other broker exchanges to see if Coinbase is the cheapest way to buy Bitcoin…
Other Broker Exchanges
There are a few other brokers that offer similar services to Coinbase. But which is the cheapest Bitcoin exchange?
CEX is a broker exchange based in London. It offers services in 99% of the countries in the world (I can’t name them all, can you?) and 24 states of the USA (it doesn’t operate in New York).
CEX charges 7% to buy Bitcoin using a credit or debit card. CEX charges lower fees if you deposit money into your account before you buy.
You can make deposits by bank transfer with US dollars (USD), British Pounds (GBP) and Euros (EUR) for free. CEX fees are then based on whether you are a maker or a taker.
A maker is someone who is willing to buy or sell Bitcoin for a price that isn’t already being offered on the exchange. A taker is someone who wants to buy or sell Bitcoin for a price that is already being offered. A taker will get their order for Bitcoin filled immediately. A maker will have to wait until a taker accepts their price.
Brokers bring makers and takers together. CEX charges takers 0.25%. This is based on a purchase of less than 5 BTC (which is worth about 48,000 USD!). Charges for makers are less (0.16%) but most beginners will be takers because it’s an easier trade.
CEX is a safe platform but it’s a little too complicated for beginners. The cheapest way to buy Bitcoin quickly is still Coinbase. Let’s have a look at Coinmama and see if it’s the cheapest way to buy Bitcoin…
Coinmama is a broker exchange based in Israel. It offers services to over 180 countries around the world. Coinmama offers very similar services to Coinbase, but which is the best site to buy Bitcoins?
You can’t deposit money on Coinmama so you need to pay with a credit card, debit card or Western Union payment.
You can only buy Bitcoin with Coinmama. If you want to sell it later you’ll have to use another exchange. Coinmama has very limited features, but what about its fees?
Coinmama charges a fee of 5.9% for every purchase of Bitcoin. It adds another 5% fee for purchases using a credit or debit card. You can expect to pay nearly 11% in total.
Coinmama is one of the more expensive brokers but it has some good qualities too. Coinmama is easy to use and it’s fast. Card registration isn’t needed to make a purchase and card details aren’t stored on the main site. This makes Coinmama one of the safest and more anonymous places to buy Bitcoin.
Which Is The Cheapest Bitcoin Exchange?
Coinbase is the quickest and cheapest way to buy Bitcoin out of the three brokers I’ve talked about. CEX has better trading options and Coinmama is better for privacy. However, Coinbase offers some of the lowest fees in the market for direct purchases with credit and debit cards.
I know what you’re thinking! You’re thinking, “Hey, I thought Bitcoin was supposed to be a new kind of money? Why should I pay fees to exchanges!?” A lot of Bitcoin users feel this way. Bitcoin is a peer-to-peer currency so you should be able to buy it from a peer-to-peer exchange. Don’t worry, you can!
Note: Peer-to-peer means from one person to another. Bitcoin is peer-to-peer because users can send each other Bitcoins without using a bank. A bank is a third-party or middleman. Bitcoin – and all other cryptocurrencies – don’t need third-parties for them to work.
However, when you buy Bitcoin on an exchange – like Coinbase – you are using a third party. Some crypto fans don’t want to use third parties at all!
Are peer-to-peer exchanges the cheapest way to buy Bitcoin? Let’s find out…
Buying Bitcoins Peer-to-Peer
One of the most popular peer-to-peer exchanges is LocalBitcoins. LocalBitcoins is based in Finland and allows its users to trade Bitcoins with each other directly. This means that you can use LocalBitcoins to buy Bitcoins from people in your local area!
LocalBitcoins has traders willing to sell Bitcoin in more than 15,000 cities in 248 different countries. The traders on LocalBitcoins pay a fee to advertise their Bitcoin. Buyers don’t pay anything!
There are many different payment methods available on LocalBitcoins. You can pay traders with PayPal, bank deposits, bank transfers, credit cards and even cash!
LocalBitcoins is one of the few exchanges that encourages its users to meet each other in-person to buy and sell Bitcoin. This makes it a great platform for users who want to be a part of the crypto community. For security, LocalBitcoins has a user rating feature. It also has good customer support services. These include conflict resolution and escrow holding.
It is important to be careful when buying Bitcoins peer-to-peer. Learn as much as you can about the seller before you buy. If you meet a seller in person, always do it in a public place and take a buddy with you!
Is LocalBitcoins The Cheapest Way To Buy Bitcoin Peer-to-Peer?
There are no fees and you don’t have to give any personal information when you buy Bitcoin with LocalBitcoins. Users can stay anonymous and meet the crypto community! However, sellers often charge more for Bitcoins than some exchanges do. This means that LocalBitcoins isn’t always the cheapest way to buy Bitcoin.
Other peer-to-peer Bitcoin exchanges include Wall of Coins, Paxful and BitQuick. These exchanges tend to have higher fees than LocalBitcoins and offer less services. For example, Wall of Coins is only available in 12 countries and BitQuick charges buyers a 2% fee.
LocalBitcoins is the best and cheapest way to buy Bitcoin peer-to-peer.
I know when I want some cash, I go to the ATM. Let’s look at where you can buy Bitcoin from an ATM.
Buying Bitcoin from an ATM
A Bitcoin ATM is a cash machine where you can buy Bitcoin. CoinATMRadar lists the locations of Bitcoin ATMs in over 60 different countries. Bitcoin ATMs can be fully anonymous. They are also a safer way to buy Bitcoins than peer-to-peer. However, Bitcoin ATMs can cost a lot more than other ways of buying Bitcoin. Let’s use an example to see the difference;
Mario lives in San Diego, California and wants to buy 1 BTC. Mario uses Coinbase and pays with a credit card. Coinbase offers 1 BTC for 9,633 US Dollars. Mario pays about 10,018 USD after a fee of 3.99% is added.
Mario’s brother, Wario, also lives in San Diego and wants to buy 1 BTC. He goes to the Bitcoin ATM at The Cage Smoke Shop on El Cajon Boulevard. The ATM charges Wario 10,420.36 USD. That’s over 400 US Dollars more than Mario paid!
Buying Bitcoin from ATMs is quick, anonymous and safe. It isn’t the cheapest way to buy Bitcoin though.
When you buy Bitcoin you need somewhere to store it. To use any of the methods I’ve talked about you will need a Bitcoin wallet.
How To Buy Bitcoin Without Fees
Remember when I told you that Coinbase doesn’t charge fees for deposits? Well, Coinbase has a sister company called GDAX. When you sign up for a Coinbase account you also get access to GDAX. GDAX doesn’t charge maker fees. This means that you can buy Bitcoin without paying any fees!
To do this, you need to transfer funds from Coinbase to GDAX (for free). Then you need to submit a buy order that isn’t already available on the exchange. This is a maker order. It might take some time for your order to be filled. When the order is filled, you’ll receive the Bitcoin you ordered. With no fee!
This is the cheapest way to buy Bitcoin without paying fees!
Bitcoin wallets are where you keep all the codes you need to access your Bitcoin. A wallet can be software, hardware, online or offline. It can even be a piece of paper! It is recommended that you use more than one kind of wallet to store your Bitcoin. Wallets are very important, so keep them secure!
In this guide, I’ve told you about the cheapest place to buy Bitcoin. You’ve also learnt about how to buy Bitcoin without fees. There are other places to try though. As you become more confident, you can try buying Bitcoin on a professional trading exchange like Bitstamp or Kraken.
If you’re ready to start trading like a pro, check out our Kraken vs Bitstamp review.
Let’s finish with a few final thoughts…
If you google the words, “buy Bitcoin lowest fees”, you get thousands of results. Most of the sites claiming to have the lowest Bitcoin fees are lying! The truth is that buying Bitcoin is quite expensive.
So, don’t worry too much about the cheapest way to buy Bitcoin. Try to find the best place to buy Bitcoin for you. The first place you buy Bitcoin should be safe and easy to use. Coinbase is both of these things and it’s cheap. That’s why so many people recommend Coinbase to newbies.
Some buyers might care more about privacy than fees. For these people, I would suggest using a peer-to-peer exchange like LocalBitcoins. They’re also a great way to get involved in the world of crypto. Remember, Bitcoin is more than just money. Bitcoin is a new way for people to connect with each other.
Let me know when you’ve made your first purchase of Bitcoin. I’d love to hear which method you used!
What is the safest place to buy Bitcoins?
At present, Bitcoin has become a buzz word: the more recognizable it becomes, the more people take interest in it. The issue is that Bitcoin is different from the conventional form of money, so newcomers find it really hard to come up with how to acquire some. That’s why, before taking any actions, it is important to understand clearly what cryptocurrency is, how to buy it, what factors are the most important when buying it and, eventually, get to know the safest place and way to buy Bitcoin.
An introduction to Bitcoin and the notion of cryptocurrency
Bitcoin is the first-ever cryptocurrency. Still, it is the most popular, has the highest price per one token and holds the largest market cap.
But what is cryptocurrency? You can think of it as ‘digital money.’ As it entirely exists in the digital world, it is more appropriate to call it a digital currency. The backbone of cryptocurrency is a decentralized network called blockchain, where transactions occur. Besides, it is a peer-to-peer network, meaning that everyone interacts with each other directly.
What affects the price of Bitcoin?
Bitcoin is not a national currency. Its price is not estimated by government like that of the US dollar or EU euro. As Bitcoin is independent, its rate is affected by two universal factors: demand and supply. It is very similar to the way gold ‘works’ with the only difference that everything is done in a digital form.
This is the reason for Bitcoin’s deflationary nature. Its skyrocketing performance is driven by a continuously increasing demand on the market. That’s why many investors stick to a ‘hassle-free’ strategy: Buy and Hold. In this way, Bitcoin can very often become a perfect tool for fringe earnings.
Where are Bitcoins bought?
It depends on how much cryptocurrency sphere is developed in the country you live. For example, Bitcoin ATMs provide quite a simple way to buy Bitcoins; however, they are only available in certain countries and relatively limited amount.
So far, the most widespread option for most people is buying Bitcoins via cryptocurrency exchanges. It’s pretty simple. Just like any regular website, the exchange implies you to make an account, choose the payment option and that’s it — you are ready to buy Bitcoins or any other cryptocurrencies available on the platform.
What are the payment options?
As cryptocurrency is a brand-new concept, many people find it hard to get the idea of how specifically it is bought. Different exchanges include various options for buying cryptocurrency. Let’s take CEX.IO as an example. In far 2013, it was a cloud mining provider; then, it launched Bitcoin and Ether trading. Now, CEX.IO has extended to a worldwide cryptocurrency exchange with an over-million customer base, where you can trade, buy and sell Bitcoin, as well as other popular cryptocurrencies.
Using this kind of exchange, you can buy Bitcoins with fiat money. For example, CEX.IO supports USD, EUR, and GBP. You can fund the account using three basic payment methods:
Visa/MasterCard. Single time linking and verification of your credit card is the only thing it requires from you. After that, you can buy/sell cryptocurrency in one click.
Wire transfer. It’s a fee-free option for funding your account by means of electronic money transfer.
CryptoCapital. Yet, one opportunity to deposit money for free. But, before trying out any payment options, better examine the limits and commissions of an exchange.
Once you’ve funded your account — you are ready to acquire some Bitcoins. Most exchanges offer trading platforms which are perfect for experienced users; if you’re not, you can use the buy/sell section, in this way, you acquire Bitcoins instantly. It is much easier for novice users. Although, be sure to know that not all exchanges include this option.
What to pay attention to when choosing a cryptocurrency exchange?
Now, we’ve moved to the most important part. In the light of the article title, you can see that safety is the name of the game, and no one will argue with that. Before choosing an exchange, it is recommended to check it for different factors, most of which focus on the security issue, in particular:
Legal and security documents. The thing is that cryptocurrency exchanges are at the intersection of fiat money and cryptocurrency. So, it is vital that exchanges have both certificates and licenses proving the legality of acts for the banking part of the process and certificates or registrations that prove the safeness of transactions occurring on the blockchain side.
For how long the exchange is operating. It doesn’t mean that the new ones are less reliable. But, still, it is a lot easier to trust an exchange that is on the scene for a definite period. In this case, you know whether it owns a certain creditworthiness or not.
Get to know whether the exchange was or wasn’t disrupted by hackers. For certain, there is hardly any platform that has never been attacked by hackers. So, if an exchange has never been subject to theft, it can only mean that its security was always at a high level to protect users’ money. And that is a great significative.
User-friendliness matters, because it is what users are dealing with directly. While the sphere of cryptocurrency is completely new to most people, it is extremely important to grant clients with a plain interface that’s easy to grasp with.
The sphere of cryptocurrency is expanding and developing against the clock. Correspondingly, there’s a vast variety of options for buying Bitcoins. Of course, there is no universal safest place, and everything is relative. That’s why each of us chooses on his/her own. The most important is to find the place that fits you best, but only provided that you regard it as a trustworthy service with reputable history and strong security.
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How to Buy Bitcoin
This article was updated on December 1, 2017, and originally published on June 6, 2017.
Bitcoin is a digital cryptocurrency with no intermediaries or banks necessary to conduct transactions. It was designed as open-source software in 2009 by an individual or group known only as Satoshi Nakamoto with the intention to minimize transaction costs and deregulate currency. The cost of a bitcoin has skyrocketed this year. When the calendar rolled over to 2017, the price of one bitcoin was just a shade under $1,000. As I write, the price of bitcoin has skyrocketed to almost $7,500!
This huge increase in price has led some investors to not only some to wonder if they should invest in bitcoin, but even how to invest in bitcoin in the first place. After all, it’s not like they can purchase a bitcoin at their brokerage or bank. Heck, one can’t even buy a bitcoin at Amazon.com, and Amazon sells everything! With this question in mind, let’s look at some different ways investors can buy bitcoins or otherwise gain exposure to this unique asset class.
(If you’re still a little confused about what exactly a bitcoin is, here is an excellent primer on the unregulated virtual currency by fellow Fool Matthew Frankel).
There are several ways for investors to buy bitcoin. Image source: Getty Images.
What’s in your (bitcoin) wallet?
The most popular way to buy bitcoins is through bitcoin wallets, digital wallets for the exclusive use of bitcoins. There are many different types of bitcoin-based wallets and you need to be very careful to choose something that will best meet your needs. Some bitcoin wallets are device-specific, while others are web-based.
Coinbase is one of the most popular digital wallets used to purchase bitcoins. As with almost any of these wallets, customers must sign up for an account online and then link a bank account. If they just want to buy, a valid credit card number will do. Coinbase accepts Mastercard and Visa. Before any bitcoin transaction, Coinbase shows users the current value of the digital currency in U.S. dollars. When making a withdrawal from a Coinbase account, account holders can choose to have the funds go to either a linked bank or PayPal account.
Since third-party cryptocurrency wallets have been famously known to be hacked resulting in a permanent loss of funds, investors must be careful to properly secure their bitcoin wallets. Remember, bitcoins are not stored in FDIC-insured accounts and most third parties do not offer insurance in case of theft or fraud. How bad is this problem? Last August, Reuters reported that a full third of bitcoin exchanges had been breached.
Security is vitally important in keeping bitcoin accounts safe. Back-ups are critical in cases of computer crashes or stolen wallets. Wallets must be encrypted so anyone withdrawing bitcoins from your account must know a password. Whatever you do, don’t forget your password! Many wallets offer two-factor authentication, where a unique code is texted or emailed to you before withdrawals can be made. Bitcoin passwords are also critical as, unlike bank accounts, there is no customer service line to reset your password. Bitcoin.org recommends either memorizing the password or writing it down and storing it in a safe place.
Alternative ways to purchase bitcoins
There are other ways to purchase bitcoins; some more exotic than others. Bitcoin Depot, in conjunction with the bitcoin wallet Airbitz, allows users to buy bitcoins with cash at dozens of special ATM locations spread across six states: Alabama, Florida, Georgia, Massachusetts, Tennessee, and Texas. After setting up an account, all customers need to do is deposit cash in the ATM and scan a QR code with a special scanner attached to the ATM and, within minutes, the purchased bitcoins will be available in the Airbitz account.
The bitcoin-based ETF
The most convenient way to gain exposure to bitcoins is through the Bitcoin Investment Trust(NASDAQOTH:GBTC). This fund was created so that buying bitcoins could be as easy as buying any stock or ETF share. All people have to do is buy shares through their regular broker using the ticker symbol. Each share represents about one-tenth of a bitcoin. But, as fellow Fool Jordan Wathen has pointed out, this convenience comes at a steep cost. According to his calculations, a share often costs more than the value of the underlying bitcoin.
As with any security, one should do their due diligence before buying bitcoins. Not only on its worthiness as an investment, but on the right exchange platform that best meets your security and convenience needs.
Should I buy Bitcoin, what are Ripple, Ethereum and Iota, and how safe is the cryptocurrency?
BITCOIN continues to create financial drama marked by surges and dramatic falls
Here is everything you need to know if you’re thinking of investing in Bitcoin or one of the other fashionable cryptocurrencies…
How do I buy Bitcoin?
The most common way to buy the currency is to download a broker app such as Coinbase and Blockchain.
These allow users to use a credit or debit card to exchange pounds for Bitcoin.
Users do not have to buy whole Bitcoins and can purchase a small percentage that matches the value of their cash investment.
Once a request has been made, online “miners” will decide whether to approve the transaction.
If approved, the money will be taken from a user’s account in exchange for Bitcoin.
When selling, users can use the same app to sell their Bitcoin in return for its cash value.
It is also possible to buy Bitcoin directly from sellers on other websites – bypassing the need for a broker.
There are fewer transaction fees in this case, but the process is a bit riskier and more complicated – especially for a beginner.
Investors can also buy Bitcoins by depositing cash at a nearby Bitcoin ATM.
These have been popping up in newsagents and can be found by Googling them or visiting Coin ATM Radar.
Is it safe to buy Bitcoin?
Anyone thinking of investing in Bitcoin or another cryptocurrency should be very careful.
Their values are volatile, with the ability to plummet as quickly as they shoot up.
On January 9, 2018, Bitcoin and other major currencies hit the floor after major monitoring platform Coinmarketcap decided to leave out the trading prices from South Korea — a major market whose absence spooked already jittery investors.
Prices fell by around 20 per cent across the cryptocurrency market as a result of the move.
Investors are also frequently targeted by hackers and other criminals who seek to steal their crypto-cash online.
Be especially careful if you are using direct, peer-to-peer platforms to sell and buy cryptocurrencies.
These are the equivalent of something like Gumtree for Bitcoin – you never know who you might be dealing with.
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What are Iota, Ethereum and Ripple?
Iota is a new cryptocurrency growing in popularity, similar to Bitcoin, but different in certain ways.
Bitcoins aren’t printed, like pounds, dollars or euros – they’re produced by people, and increasingly businesses, running computers all around the world.
To process Bitcoin transactions, a procedure called “mining” must take place, which involves a computer solving a difficult mathematical problem with a 64-digit solution.
For each problem solved, one block of Bitcoin is processed.
Iota, on the other hand, removes the need for this by asking anyone submitting a transaction to verify two other random transactions.
It all sounds quite technical but it basically means it is decentralised, there’s no fee for transactions and the more people using Iota the faster the network becomes.
Ethereum is another cryptocurrency – one which some have said could overtake Bitcoin as the dominant coin in the market.
But it is also a ledger technology – using “blockchain”, like Bitcoin – that companies are using to build new programmes.
Ripple acts as a payment network, RippleNet, and a cryptocurrency, Ripple XRP.
The platform makes it easy to transfer almost any currency to almost any other currency in the world in no longer than four seconds.
Ripple is focused on working with banks and other institutions in a bid to offer an efficient and cost-effective way of sending real-time payments around the world.
Other currencies like Dash and Monero have emerged too as investors pile funds into the online cash.
Sun girl gets chip that has contact info, bitcoin and FACEBOOK profile implanted into her hand