Difference between revisions of "Buying Bitcoins"
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* '''IMPORTANT!!! Change your password!'''
* '''IMPORTANT!!! Change your password!'''
After clicking the confirmation link it is advised you change
After clicking the confirmation link it is advised you change password as shown below since you will be transferring money through this site.
Revision as of 11:00, 9 September 2015
This page aims to be the best resource for new users to understand how to buy Bitcoins.
Warning: Please be careful with your money. When sending money to an exchange or seller you are trusting that the operator will not abscond with your funds and that the operator maintains secure systems that protect against theft -- internal or external. It is recommended that you obtain the real-world identity of the operator and ensure that sufficient recourse is available. Because Bitcoin services are not highly regulated a service can continue operating even when it is widely believed that it is insecure or dishonest and webpages recommending them (including these) may not be regularly updated. Exchanging or storing significant amounts of funds with third-parties is not recommended.
- 1 PayPal
- 2 Credit Cards
- 3 Bank Transfer
You can't directly buy Bitcoins using PayPal, because it is risky for the seller, and therefore few sellers will offer this. There are basically 3 reasons for that:
- The buyer of bitcoins can always perform a chargeback and there is no way for the seller to contest that
- There are many hacked accounts and when PayPal realizes that such an account has been fraudulently used, they will also perform a chargeback
- PayPal doesn't like bitcoin, as the bitcoin network is in direct competition to it. They will ban accounts that have anything to do with Bitcoins, and freeze their balance.
Having said that there is a workaround that can be done in order to use Paypal to buy Bitcoins but it holds within it higher transaction fees. Using the Virtual World Exchange you can buy Second Life Lindens (SLL) with Paypal and then convert your SLL to Bitcoins. This process will charge you transaction fees of around 6% but will let you purchase Bitcoins pretty quickly as opposed to a wire transfer. The reason this method works is because you do not buy Bitcoins with Paypal directly, you only buy SLL with Paypal (which is acceptable by Paypal's TOS) and then exchange your SLL to Bitcoin.
Workaround for PayPal
Step 1 - signing up on VirWox
Go to VirWox. VirWox is an exchange of virtual currency, you can buy there Lindens, Bitcoins, and more…
- Open a free account
Click on the “not registered yet” on the top of the left sidebar to open up a new account as shown here:
- Fill out your details
Fill out your username and email address. Where it asks for “avatar name” just leave it at “No Avatar”, it doesn’t matter, since you’re not going to play Second Life.
- Activate your account
Once you clicked “register” you will get an email confirmation with your password. Open the email, copy the password and log back into VirWox.
- IMPORTANT!!! Change your password!
After clicking the confirmation link it is advised you change your password as shown below since you will be transferring money through this site.
Do not worry about the message saying “Your avatar connection has not been validated yet” – it is irrelevant.
Step 2 - Fund your account through PayPal/Skrill/Credit Card
Click on deposit on the left side and choose PayPal Express. Fund the account with how many USD/EUR you’d like.
Note: From now on for each transaction you will make there will be a fee – make sure you are aware of the relevant deposit and withdrawal fees.
Step 3 - Buy SLL
Go to Exchange -> USD/SLL on the left side. You can also go to any other currency you deposited. Buy SLL (Second Life Lindens). We will later on exchange these SLL to Bitcoins.
There are 2 methods of placing an order. One is placing a market order (fast, simple), and the other is by placing the limit order (better exchange rate, takes a bit of time)
Placing a Market order is simple. Enter the amount of EUR/USD you want to exchange, and it will automatically calculate how many SLL you'll get per EUR. It's instant, but the exchange rates are high, so you'll be getting less bitcoin that you normally could.
Note: If you haven’t made a deposit yet you will get the screen requesting you to deposit before you buy SLL.
Placing a Limit order is just a bit more advanced, but you can get a better exchange rate than you can with a market order. It can take some time to complete (few minutes to a few hours), depending on the price you set for it.
To place a Limit order follow the Limit order link on the exchange page. Next enter the amount of EUR/USD you want to sell and the price you want to sell them at. Now for this it is best to consult the Current Market Depth table and pick the price you want.
Ideally you want most SLL you can get, however do keep in mind that if you pick a very high price point it may take a long time to complete entirely. The field for the SLL will already be filled with the current best market price available, however you can change that to a bit more, and it will still get filled reasonably quickly.
If the order isn't getting filled, you can always cancel it and start over.
Step 4 - Buy BTC
Once you have SLL in your account, go to the BTC/SLL and buy Bitcoins with your SLL. Same as previously, you can pick Market order for instant exchange, or a Limit order for a better exchange rate.
It's similar as before, with one difference - you're entering how much you want to pay, so ideally you want to pay as less as possible. So again examine the Current Market depth table and pick a price you want to sell at. If you enter a price slightly above the lowest highlighted price, your order is likely to fill up fairly quickly, but if you pick a lower value you'll have to wait some time until someone accepts your order.
As to how many bitcoins you can actually buy, you can always choose a value you roughly calculated that you can afford (have enough SLL), but don't worry when you click next there is a confirm button with the calculated value of how many SLL are needed for that transaction. In case you undershot or overshot it, you can always go back and adjust the value accordingly.
Step 5 - Withdraw your Bitcoins
Choose “Withdraw” on the left side and send the Bitcoins to your wallet, or you can directly withdraw to the address you will receive from BakaBT.
There will be a manual review by VirWox after this step for new accounts that haven't executed orders before. This can take up to 48 hours before you receive your bitcoins.
VirWox - The Virtual World Exchange accepts all major credit cards (via Paypal or Skrill) and allows you to buy SLL which you can then trade to Bitcoin. Using this method is faster then most options but has larger transaction fees involved.
CoinMama uses Western Union to allow you to purchase Bitcoins through your credit card. This service is not available in the US.
Trucoin - allows users to buy Bitcoin with credit and debit cards. Trucoin is the first properly licensed money service business to offer this service and serves U.S. customers in Alabama, Arizona, Arkansas, American Samoa, Connecticut, District of Columbia, Florida, Georgia, Idaho, Kansas, Kentucky, Maine, Massachusetts, Michigan, Minnesota, Mississippi, Montana, Nebraska, New Jersey, New Mexico, North Dakota, Oregon, Rhode Island, South Carolina, South Dakota, Texas, Wake Island, West Virginia, and Wyoming, with more states and worldwide locations coming soon.
CoinMX - Accepts worldwide users (mainly from the US). you can use your credit card to fund your CoinMX account and buy BTC or LTC currencies. Requires verification of identity by sending a video holding a government issued ID (e.g. passport) to the site.
US Only!! Coinbase allows you to buy and sell bitcoin instantly by connecting any U.S. based bank account. You need an account number and routing number, which can be found on a check. A credit card can be optionally linked to your account as well. Coinbase also acts as a bitcoin wallet which can store the bitcoin once it is purchased. Ideal for beginners first getting involved in bitcoin.
Bittylicious allows customers to purchase Bitcoins using an extremely simple interface. All customers need to do is to enter their Bitcoin address and email address and choose how many coins they want. If customers want to purchase more than the default (usually around £50/EUR 55/$80) then they just need to sign up and do some sort of verification. UK bank transfers, Euroean SEPAs, iDEAL and Mister Cash are all accepted.
Kraken allows verified users to buy and sell bitcoin using USD and EUR by depositing via wire transfer. Other national currencies can be converted to USD or EUR at transfer. Kraken is an exchange and the market is determined by orders.
Belgacoin allows you to buy bitcoins via SEPA transfer. It is fast, secure and cheap. No registration needed. All you need to do is to complete the order form and to make the payment. Upon receipt of your payment, it will process your order, and send your Bitcoin into your wallet directly, or by email.