How to Buy Bitcoin
Acquire Some Bitcoin
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Option 1 - Exchange or ATMMany services have developed to provide bitcoin liquidity to those interested. The potential risk with online exchanges is they require your personal information due to government regulations. At the same time they are not insured by FDIC. Therefore, purchasing and holding bitcoins in an exchange carries extra risk. When this risk is understood, the use of an exchange is a convenient method to acquire bitcoin.
For holding bitcoin longer term see Step 2 -Creating a Bitcoin Wallet. |
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An ATM allows for a more anonymous transaction at a local point of sale while also providing the actual private key in paper form.
www.coinmap.org
Option 2 - Buy Local
For several years now localbitcoins.com has been the place to go to find buyers and sellers of bitcoin in local neighborhoods. The service works, but some reports include mixed reviews. With all financial transactions the risk of scammers arises but that does not mean the option should be ignored. Best to read up on and do due-diligence before using.
Meetups have been a big part of the bitcoin movement. While not a guarantee, it is likely someone interested in trading bitcoin for cash can be found at an event.
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Option 3 - Mine Your Own
Bitcoin Mining has become a big business with companies forming to create ever larger server farms. While this option was popular in the early days, it is not recommended as an income method for today's average person.
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Option 4 - Exchange for Goods and Services
The exchange of goods for services is as old as human history. Unfortunately, is unlikely that the typical 9-to-5 corporation will consider payment in bitcoin anytime soon. For individuals though, do you have a business? Are there services you can provide? Would you consider taking bitcoin as payment? (See our Merchant Services page for more on payment systems) |
Store the Bitcoin |
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Option 1 - Web (Online) Wallet
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Least Secure - Most Convenient
Easiest to create but comes with risk because third parties control the private keys. An exception to this is Blockchain.info, which encrypts all private keys through the browser and theoretically only the user has access. Despite the proof of identity requirements, remember exchanges and wallets are not regulated as banks are. There is no insurance for account value if the exchange goes out of business or is robbed by hackers. |
Option 2 - Mobile (Phone) Wallet
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Not Secure - Convenient
Safer than online, some apps do control the private keys but the wallet does not fully sync with the blockchain. Mobile wallets come with other risks. Even though the app came from the Android or Apple store, this does not imply it is safe to use. Most people don't think about what an app does when installing it on their device. Tread carefully. Think of a mobile wallet as petty cash. If carrying more than $200 around in cash is problematic, then the same should apply to phones with equivalent in bitcoin. |
Option 3 - Desktop (Software) Wallet
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Secure - Moderate Convenience
Bitcoin software is installed on the desktop or laptop of choice, this grants access to the Blockchain network. All private keys are generated by the computer and stored on the computer. Control of the bitcoin is as safe as the computer is from viruses. Bitcoin Core is the original desktop wallet but comes with few features. Wallets such as Armory add more features for security and convenience. The desktop wallet might be analogous to a checking account. |
Option 4 - Paper (Offline) Wallet
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Very Secure - Umm, where did I stash it again?
The intent here is to store funds on a private key that has never been on the internet. This is done through a paper wallet or a computer (with no internet connection and the necessary software installed through a CD). Arguably the most secure means today, it is also the most burdensome to achieve. Multiple copies of private keys should be stored in different locations, such as a safe or under the mattress. |
Learn More
Bitcoin - The Complete Guide (Instructables)
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Bitcoin News
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Paper Wallets (Blockchain.info)
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Software Wallet (Armory)
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