As bitcoin continues to gain popularity, there still remains one of the biggest hurdles for adoption from the early days – Buying your first bitcoins. Since becoming more mainstream, services have popped up all over the place giving the average Joe more and more of a reason to try out bitcoin, even if it is just to satisfy one’s own curiosity. In the next few sections, we will cover how to choose a bitcoin wallet, how to buy bitcoin online, and how to buy bitcoin locally. But, first, however, we should cover a few important things about bitcoin. The bitcoin foundation, at bitcoin.org, lists the first step for those curious as inform yourself. This part is, in fact, one of the most important, because bitcoin does not act like PayPal or a traditional credit card, you can’t just call your bank and tell them your bitcoin wallet has been stolen or you sent your bitcoin to the wrong address.
Step One: Inform Yourself
One of the big appeals for bitcoin as a currency is that it is anonymous. The identity of the person sending or receiving a transaction is only their bitcoin address, a seemingly random string of around 34 characters. Once you send or receive bitcoin, that transaction is sent to the blockchain to be verified and recorded on a ledger that is distributed throughout the bitcoin network. To provide an incentive to the computers doing the ‘mining’, or processing the constant stream of transactions, miners charge a small fee for each ‘block’ that they record to the blockchain. The miner’s fee is usually stepped over by most and users typically resort to the default miner’s fee, however, increasing the miner’s fee will ensure your transaction is prioritized over others’ transactions. Buying bitcoin online can be anonymous as well so almost anyone can have access to this digital currency.
With these points in mind, you should move on toStep 2: choosing your wallet. Where you choose to buy your bitcoin online or locally you will need to have a bitcoin wallet. The choices are plentiful, you can easily search the Apple Store or Google Play and choose from a variety of wallets that reside on your smartphone. If you would like a wallet that you can access from anywhere on the web, try out an online wallet. A few sources, such as Coinbase and Circle, offer a place to both buy and store your bitcoins wrapped into one convenient service. The Bitcoin Core software, which you can also find over at bitcoin.org, has a straight forward desktop-based bitcoin wallet built-in if you prefer to have access to your bitcoins just a few clicks away, even when offline.
Step Three: Buying Your First Bitcoin
Once you have picked out a wallet, it’s time to move on to Step 3: Buying Bitcoins. In the US, Know Your Customer (KYC) and Anti-Money Laundering (AML) laws, recently extended to the purchase of bitcoins, require that you submit identification and for your identity to be verified before making your first transaction. If you reside outside of the US, you may or may not be subject to similar laws, so do your own research on the laws in your jurisdiction. The process of getting vetted on Coinbase and Circle, two large venture-funded bitcoin operations in the US, is relatively fast (only a few days at most) and as such have become popular options to buy bitcoin online. Coinbase and Circle both support buying with your debit card or bank account, and recently Coinbase has added paying with Visa and MasterCard Credit Cards, although to limit fraudulent activity these have lower daily and weekly limits.
So, now that you have your bitcoin, what are you going to use them for? You might first check your favorite websites if they accept bitcoin. Many websites are accepting bitcoin as a payment method and the number grows each day. In short, however, there are many places you can use bitcoin to make purchases. You can buy a new computer from Newegg.com, book a plane ticket on CheapAir.com, or just take a look at coinmap.org’s handy map of physical locations that accept bitcoin and find something near you.
A much more comprehensive list of goods and services that businesses offer for bitcoin purchase can be found at user bitcoins.info.
Also, for any of the specific services listed throughout, there should be plenty of information available on their website. However, a good starting place for further research is bitcoin.org