Before you acquire bitcoins, though, you’ll need somewhere to access them. That’s where a bitcoin wallet comes in.
Coinbase is arguably the most popular bitcoin wallet, period. An online wallet with a mobile app, it’s seen as the most convenient because it is also directly connected to a bitcoin exchange, simplifying the buying and selling processes (This is also true of another popular wallet, Blockchain). Coinbase also offers offline storage for added security.
These and other online wallets have mobile apps as well, but there are also many wallets designed specifically for smartphones. While this means you can access your bitcoins anywhere you go, if your phone gets hacked, those coins are in danger of being lost to you forever.
Still, mobile apps are convenient, and the more successful ones have their own ways of working to secure your information. Airbitz (client-side encryption) and Mycelium (open protocol) are two particularly successful mobile wallets that have focused on security.
Coinbase accepts Visa and Mastercard, but not American Express. And even those two aren’t a guarantee – J.P. Morgan Chase, Bank of America, and Citigroup recently announced that they would no longer allow for the purchase of cryptocurrencies with their credit cards (though Bank of America says this doesn’t affect their debit cards). Discover hasn’t let their cardholders buy bitcoin in years. Make sure to check that you’re able to use your card at all first before you waste your time.
You’ll also need to figure out with bitcoin exchange you’ll want to use to make the purchase. If you’re using Coinbase as your wallet, this is already solved for you since they have their own exchange, but others exist as well. These exchanges differ in the fees you pay them for the transaction, the countries they are available in, and the limit of how much you can buy in a single transaction.
We’ll use two different exchanges as examples, starting with Coinbase. Their website claims to support 32 countries, and the charges a 3.99% fee. The steps to buying bitcoin with Coinbase using your card are:
2. Once you’ve logged on, click “Buy/Sell” at the top of the page. Click “Buy” and specify “Bitcoin.”
3. Type in the amount of money you want to spend. The built-in calculator will tell you how many bitcoins that is.
4. Click “Buy Bitcoin Instantly.” Confirm that your payment info and amount is correct and click “Confirm Buy.”
Coinmama is a popular exchange that allows for credit and debit cards as well. It allows for larger purchases, but the 6% fee is pretty steep. The steps to buy bitcoin with Coinmama using your card are:
1. Create an account and then fill out your personal information.
2. Click “Buy Bitcoins,” select the amount you wish to purchase, and click “Credit/Debit Card” for your method of payment.
3. Enter your bitcoin wallet address, which is a version of your public key.
4. Enter payment information, including billing info.
5. Verify your identification – this includes verifying your phone number and email, as well as uploading a form of ID.
6. Receive your confirmation email after everything has been verified.
Strangely, one of the most well-known ways to buy bitcoins with PayPal is not a bitcoin exchange – it’s via VirWoX, the virtual world exchange used to acquire currency for the famous online virtual world Second Life. You can transfer your currency to SLL (Second Life Lindens) and then transfer those to bitcoins. It’s a roundabout way to do it, but it seems fairly consistent – a rarity in cryptocurrency. The steps to buying bitcoin with VirWoX using PayPal are:
1. Create an account and fill out the necessary info.
2. Activate your account via email confirmation and immediately change your password; the one they give you is temporary.
3. Under “My Account” on the left side, click “Deposit.” Scroll to the “PayPal Express Checkout” section, input how much you want to deposit, and click “Check out with PayPal.”
4. With your account funded, find the “Exchange” section on the left side and click “USD/SLL,” or whichever currency you used. Input how many of your funds you want converted and exchange it for SLL.
5. Click “BTC/SLL” under “Exchange,” and input how much BTC you want under the “Exchange SLL to BTC” section.
6. Once they’ve been converted to BTC, click “Withdraw” under “My Account.” Input how much BTC you want to withdraw and bitcoin wallet address to send them to.
Though: in doing this you’re putting trust in a complete stranger who could easily scam you. Stay vigilant.
If you’re in the right place, you may be able to use a Bitcoin ATM. Coin ATM Radar has a map of bitcoin ATMs all over the world. Large clusters of them are in major U.S. cities – New York, Philadelphia, Chicago, Los Angeles, Atlanta, and Miami. There are several different brands of ATMs with differing methods of verifying your ID and bitcoin address, but the general steps to using them are:
Press “Buy bitcoins.”
Verify your identification. This can be, for example, a confirmation code sent to your phone.
Provide bitcoin address via scanning your wallet’s QR code.
Print receipt after everything is confirmed.
The aforementioned Local Bitcoins also lets you use cash, as connecting buyer and seller allows you to potentially meet them in person and pay them directly in cash. In addition, there are sites like Bitquick and Paxful, which connect buyer and seller in a way where the seller provides bank details that let the buyer make a cash deposit at the bank. Keep the receipt to provide proof, and the seller can send you the bitcoins. But again: stay vigilant.
Once you’ve used any of these methods, what you do with your new bitcoins is up to you. Some want to spend them, but others look to turn them into a long-term investment.