If you’ve read my article on Bitcoin value, you know that I believe Bitcoin has a bright future. The next step after researching the pros and cons of Bitcoin is to open a Bitcoin wallet and buy some Bitcoins. This article will cover a half dozen ways of doing so. There are more.
As of right now, Coinbase has received an infusion of venture capital and has greatly streamlined the buying process. You can now connect your coinbase account to your bank account, and once verified with 2 small deposits, you’ll be able to buy Bitcoins with just two mouse clicks. Click here to buy Bitcoins at Coinbase.
I’ve been getting a lot of reports of long delays and multiple difficulties when people attempt to purchase Bitcoins. It should be self-evident that the banking “elite” don’t want to make it easy for the masses to exit the currencies they own for an honest one. Patience and persistence will be needed, along with some information on how to buy Bitcoins (provided below) along with some guidelines and what to expect.
Here are 6 different avenues to persue in oder to successfully buy Bitcoins:
1. You can buy bitcoins on ebay. There is not much of a supply of Bitcoins available, you’ll pay more than market price on the exchanges, but making the purchase can be done very quickly and without any limits (as of this writing on 4/4/13. I do, however, anticipate ebay imposing limits in the relatively near future.)
2. You can use coinbase.com to create a wallet and buy Bitcoins. Coinbase will allow you to link a bank account directly to your account with coinbase, and you can verify that account instantly if you choose. You will then be ready to buy Bitcoins from your coinbase account which will be funded from your bank account. However, coinbase has limits in place.
Once you’ve successfully linked a bank account to your coinbase account, you will only be able to buy 10 Bitcoins per day. This is a quick way to get started, but if you want to make a larger purchase than 10 Bitcoins, it will not be possible using coinbase. If you want to raise the buying limit to 50 Bitcoins per day, you’ll need to verify your coinbase account with a phone number, make a purchase of some bitcoin, and wait 30 days. Those are the rules at coinbase. Using this method can be fast, but it will not be fast for larger purchases of Bitcoin. It is a way to buy 10 Bitcoins to get started.
3. You can also buy Bitcoins from a seller on the website LocalBitcoins.com. This is a website that will help you locate sellers of Bitcoins in your area, or online sellers of Bitcoin. The idea is to go to a seller locally, pay the seller in a face to face transaction, and the seller will deposit the Bitcoins into your wallet instantly.
One of the good things about LocalBitcoins.com is that there is a customer rating system similar to the one at ebay. Customers can leave feedback, so you have an idea of how other people viewed the buying experience from any particular seller. LocalBitcoins.com, like the name says, is aimed at helping you find a local seller from which you can buy Bitcoins face-to-face. However, the site also has a section that provides ontact information from online sellers of Bitcoins, so that could be an option if you don’t have any sellers conveniently located near you.
4. Another avenue for buying Bitcoins is to use BitInstant.com. This is the service blockchain.info uses to fund your wallet on their system. With BitInstant.com, you print out a payment formand take that to a nearby location of your choosing to make a payment in person. BitInstant.com boasts 700,000 payment locatiobns worldwide including Bank of America branches, CVS stores, Walmart stores, etc.
BitInstant, as of the time of this writing, has limits that are quite small: $1,000 for cash deposits at banks, and only $500 for transfers. This will not buy you many Bitcoins, but is a method to get you started, and can be combined with other methods on this list in order to make a larger Bitcoin purchase.
5. Open an account at a mtgox.com, which is a currency exchange. Mtgox.com is currently the largest currency exchange that offers a method to exchange between major currencies and Bitcoin, and vice versa.
mtgox.com is not based in the USA, but has spent $25 million to become compliant with U.S. financial regulations.
You can do transactions in large quantitites using mtgox.com, but it will take some time for your account to be approved and become functional. mtgox.com says that bank wires typically take 3 days to be recieved. Additionally, in order to be fully comopliant with U.S. regualtions, such as the Patriot Act and FINCEN, mtgox.com will need to verify your identity. As of a week ago, mtgox.com claimed the verification process took 24 to 48 hours from the time yo submitted your proof of identity documents. Now mtgox.com has posted that the verification process takes 10 days once proper docs are submitted. I am hearing it is actually running around 11 to 12 days.
This can slow the initial process of buying Bitcoins and can be very frustrating. It’s difficult to see the price of Bitcoins going up day by day while you sit there, out in the cold, unable to buy Bitcoins while you wait for mtgox to go through and process your paperwork. Again, mtgox wants to do business in the U.S. and with U.S. citizens, so it needs to follow U.S. regulations. And who makes those regulations? The banking elite… Is it any surprise that there’s lots of red tape, hurdles, and roadblocks?
6. You can also use a smaller currency exchange that allows conversion into and out of Bitcoins. One of those is BTC-e.com. It takes about 45 seconds to set up an account at BTC-e.com, but funding the account will not be so speedy. BTC-e.com does not allow you to link directly to your bank account like coinbase does, nor does it allow bank wires to be sent to fund the account like mtgox does. About the only method to fund your account at BTC-e.com if you are a U.S. resident is to use a service called OKpay.com.
OKpay.com is a European based payment system that is similar to paypal. Opening an account takes just about a minute, but once open, in order to use it you’ll need to verifiy your identity, provide proof of your address, and confirm your mobile phone number. OKpay is required to do this in order to be in “compliance with anti-money laundering and anti-terrorist funding legislation.”
Those are 6 different places/ways/avenues to buy Bitcoins. None are perfect. All have pros and cons. For large transactions, mtgox is the best, but the wait is incredibly annoying. Nonetheless, you could use coinbase, localbitcoins, bitinstant, or even ebay to make smaller purchases while you’re waiting for your mtgox account to be approved.
Again, the owners of the financial system are making the process of getting out of the central bank currencies and into an honest, transparent, peer-to-peer, limited supply currency difficult and time consuming.
But as those who have done it will testify, the effort will be worth it.
UPDATE: Please read the new article on Buying Bitcoins on MtGox.