How to Buy Bitcoin?
Recently, we took a closer look at how to sell the portion of Bitcoins through the net. Today we’ll stop at a little bit more straightforward topic, such as purchasing of BTC. If the crypto community seeks for mass adoption, there must be a comprehensive wiki on how to obtain cryptocurrency. So be ready to scroll down this article attentively.
Exchanges, ATMs and P2P Platforms Are at Your Service
For example, you’ve read all kinds of tutorials and now you know everything about the basics of Bitcoin. The next step is to purchase some. But how?
You can buy Bitcoin and other crypto via exchanges or peer-to-peer marketplaces. Users pay for crypto via the variety of ways, including ‘hard cash’, credit and debit cards, bank accounts, and wire transfers.
Naturally, the very process of purchasing crypto on the exchanges is as easy as buying clothes on Amazon. Many ‘big boys’ like Coinbase and Bitfinex even offer the mobile applications which provide a greater mobility and accessibility. However, the processes associated with a purchase are quite a hassle. Continuous registrations and excessive number of confirmations can really make you flip out.
In addition, even large-scale exchanges are not immune to hacker attacks. For instance, the aforementioned duo, Coinbase and Bitfinex, were once hacked and lost millions of users’ dollars.
The Hong-Kong-based one, Bitfinex, was compromised twice. In May 2015, 1500 bitcoins were stolen during an outer cyberattack. In a year, in August 2016, Bitfinex announced it had suffered a security breach. As a result, $72 million in Bitcoin were stolen from the company’s customers’ accounts. Immediately thereafter, Bitcoin’s market price plunged by 20%. In the end, Bitfinex halted all Bitcoin withdrawals and trading for a while.
However exchange customers were repaid eight months after the hack, the news was quite deplorable for the community, having made it feel disappointed in the crypto exchanges’ security and credibility. And that’s unsurprising: most reputable companies should work well, shouldn’t they?
To reduce the likelihood of future hacks and fraudulent actions, the clampdown on know-your-client (KYC) and anti-money-laundering (AML) regulation occurred. Plus, many exchanges started requiring verified identification while registering on the platform. This usually includes a photo of official ID, and sometimes even a proof of your address.
That is not a balm for the souls of those who are likely to keep their sensitive information hidden. Imagine the situation: exchange you operate on was hacked and your wallet was hence compromised. It’s OK, if the exchange managed to restore your funds, but will it be able to prevent hackers from using your passport data? That’s an issue which raises anxiety. Yes, you will get your $1000 back, but at that time someone had already used your data for the illicit purchases on the ‘darknet’.
How is the payment conducted?
Let’s get back to the exchange transactions. Once the exchange receives the payment, it purchases the corresponding amount of Bitcoin on your behalf, serving as a traditional centralised third-party service. Then it deposits them in an automatically generated wallet on the exchange. Usually, it takes minutes, if there are no bottlenecks in the net. Many experienced users rely on off-exchange wallets and transfer the money instantly after the exchange transaction was carried out.
Which one to choose depends mainly on convenience and security preferences: online wallets (hot wallets) are designed for those who are afraid of losing their money due to potential mechanical breakdowns of devices; offline wallets (cold wallets) are commonly used by those who don’t trust third parties and prefers storing crypto by their own.
Once you’ve created a crypto wallet, you can stock up on Bitcoin via Bitcoin ATM. ATMs are machines that send BTC to your wallet in exchange for cash. They operate in a similar way to bank ATMs: you should pass through the verification step, provide the address for a deposit, insert cash into the ATM. Then you confirm the operation and the corresponding amount is transferred to your account.
P2P Marketplaces: A True Alternative?
As we’ve already said in our previous article, peer-2-peer platforms offer better users’ interactions and are not as hackable as exchanges. You just contact a person with the relevant needs on one of these platforms and transfer the amount of the money discussed.
Crypto trading is an ever-evolving industry where new solutions appear almost every day. Michael Ross-Johnson, a CEO of Chatex, believes that messenger-integrated marketplaces can turn the game around in the crypto industry:
“People doubt the crypto, but trust messengers. It could be solved by combining these two industries into one. The latter could bring that transparency lack of which doesn’t allow common users to get involved into the crypto world. That’s what our crypto solution is designed for. Our Telegram-based bot helps users forget about a raft of needless operations, making their crypto trading faster and easier”