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How to Sell Bitcoin For Cash
Whether you have just recently purchased your first bitcoin or you are only now looking into doing so, you probably have a ton of questions involving bitcoin conversions and how you can buy and sell cryptocurrencies.
Among those questions, you may be wondering, “Is it possible for me to sell my bitcoin for cash?”
The short answer to that question is, “Yes, you can sell bitcoin for cash.”
Of course, like all other cryptocurrency transactions, the way to do it is not immediately obvious if you are a newcomer.
But actually, there are several approaches you can take, and none of them are difficult.
Let’s take a look.
Five Easy Ways to Turn Bitcoin Into Cash Money – Selling Bitcoin For Cash
It is hard to go wrong with this site. It is one of the most popular sites on the web for the buying and selling of bitcoin between everyday ordinary people. Currently, you can use LocalBitcoins in any of 15,243 cities in 248 countries.
The company has stated that there are around 1.35 million users globally right now, and that weekly transaction volume is equivalent to around $14 million. So if you are in the market to sell, there are plenty of folks in the market to buy.
Here is how you can use LocalBitcoins to sell your bitcoin for cash:
- Start by signing up for an account.
- Next, go to the LocalBitcoins homepage.
- See the top banner which reads “Buy and sell bitcoins near you?” Look just below that and you will see “Quick Buy” and “Quick Sell” tabs. Click on “Quick Sell.”
- Enter in the approximate value of the bitcoin you are trying to sell, select the currency of cash you want to receive, choose a country, and then pick a payment method. Cash options include “cash at ATM,” “cash deposit” and “cash by mail.” Then click the orange button labeled “Search.”
This will pull up a list of buyers who are potentially interested in buying bitcoin from you. You may now skim through the list and select offers to examine more closely.
When you click on an offer, you will find yourself on a new screen which will provide you with the following information:
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• An exchange rate.
• Payment methods that the buyer is willing to use.
• Trade limits.
• The buyer’s location.
• The buyer’s payment window.
There is also a section called “Terms of Trade” on the right.
Here the user is able to type out any additional details that he or she wants you to know.
This is where the terms of the exchange can be spelled out clearly and any questions can be answered (like what will happen if the user is unable to deposit payment in time).
Some users who are new to LocalBitcoins are not clear on what “cash deposit” means.
This is where you provide your bank account number to the buyer, who then walks into a branch of your bank, fills out a deposit slip, and then deposits cash directly into your account.
This might confuse you, because after all, that person is not you.
But banks are concerned with who is taking money out of an account, not who is putting it in.
So generally no questions are asked.
This method is fast, easy and convenient for both parties. If however you are uncomfortable with it, you can use the cash by mail option.
• Choose a cash method of your choice for payment.
• Access a huge marketplace of buyers. With more than a million users, this site offers ample opportunities to sell bitcoin locally, no matter where you are located. This also allows you to be picky about the exchange rate you are willing to accept.
• You can sell to a buyer whose terms are acceptable to you. Not only that, but each buyer and seller on the site has ratings based on previous transactions. So if a buyer has a low rating, you know to avoid them. This also means that over time, you will build your reputation as a seller, which should make it easier for you to sell bitcoin for cash in the future.
• Buyers who use this site are often very keen on making a purchase, and may even be willing to give you an amazing price.
• There are no guarantees when you are dealing with regular everyday individuals. If you want to sell bitcoin for cash in a hurry and a transaction falls through, then you will have to start all over again.
Bitquick is not as well known as LocalBitcoins, but it is another very popular website, previously called “BuyBitcoin.US.”
You will find hundreds of positive reviews for it online.
As the name implies, it was set up to make it quick and easy to buy and sell bitcoin. As of the time of this writing, the site has served more than 67,000 customers.
Selling bitcoin is fee-free, as is cancelling the order if you change your mind.
Here is how it works.
1. Navigate to Bitquick’s Sell page.
2. Fill out the form you find on this page. That means selecting the payment method you are willing to accept, filling in the applicable information, and then entering in the amount you want to sell. If you are okay with a range, you can put in a minimum and maximum transaction size; otherwise, you can just enter an exact amount. You can allow for static or dynamic pricing. You then put in your email address, choose an authentication method, and submit your order.
3. Next, you need to make your bitcoin available. A personalized escrow address will be provided to you after your order is created. Deposit the bitcoin into it.
4. You will receive emails anytime there is a buyer hold or a cash deposit. Once you confirm the cash deposit with BitQuick, the bitcoin will be sent to the purchaser.
• This is an incredibly simple and straightforward method for selling bitcoin. The site itself is taking care of all the hard work of matching up buyers and sellers. All you do is kick back and wait.
• You never have to pay any fees to sell your bitcoin for cash here. All fees are paid by the buyers (except cancellation fees, if you choose to revoke your sell order).
• If you do decide you want to cancel a transaction, you can do so quickly, easily and securely.
• Your funds are not released to the buyer until you verify with the website that the buyer did indeed deposit the cash.
• You can only choose bank, credit union, or money transfer service (i.e. Western Union) as your method to receive payment. There is no option for cash via mail.
• While BitQuick is arguably easier to use than LocalbitCoins, it is also a lot smaller. So it may take you longer to get a deal that you are happy with. Finding buyers on Localbitcoins may be faster.
On the whole, it is hard to beat BitQuick for sheer convenience.
With Localbitcoins, you have to check buyer profiles and manually accept or reject offers, but BitQuick automates that whole process for you based on the information which you provide when you fill out the form to sell bitcoin.
3. Sell your bitcoins at an ATM.
You probably are aware that there are bitcoin ATMs now where you can walk up and buy bitcoin with cash.
Some of these machines will even create a wallet for you if you do not have one. But did you know that you can also use some bitcoin ATMs to sell your bitcoin for cash?
Interestingly, this is fast becoming a standard feature for bitcoin ATMs, though as of the time of this writing, the majority still only allow you to buy bitcoin with cash. Check out this chart at Coin ATM Radar, though, which shows that nearly a third of bitcoin ATMs now support two-way transactions.
The site above offers a great starting point for searching for bitcoin ATMs near you.
Navigate to the Coin ATM Radar homepage and you can scroll down to see a map of the world. From here, you can zoom in on your location and search for local bitcoin ATMs.
In the lower left are some checkboxes where you can specify what you are looking for and narrow down the results. Look under “Direction,” and you will see that you can specify that you are searching for ATMs which support cash withdrawals.
It may also be helpful to know that the following types of ATMs are most likely to allow you to sell bitcoin:
• GenesisCoin, specifically Genesis1 and Satoshi2 machines
• Robocoin (largely defunct)
• General Bytes, specifically BATMThree models
Note that there are no guarantees that a particular model will allow you to sell bitcoin, even if it is standard for that model.
The reason is that operators of ATMs are able to enable and disable certain functions, including sell functions.
This means that it is always smart to look up online whether a particular ATM will allow you to sell, especially if you need to drive a long distance to get to it.
If after doing that you still are not sure, call the venue and ask.
If you do find an ATM in your area where you can sell bitcoin, here is how to proceed (in general—the specific steps can vary from one machine to the next).
1. If the machine requires you to verify your identity, then you will need to start out by completing the verification step. The procedures may differ from one model to the next, so do some research before you head to the ATM. That way you can be sure you will have what you need when you arrive.
2. After you complete this step, you can tell the ATM how much bitcoin you want to sell.
3. The ATM will then let you know the exchange rate and the fee, and then it will provide you with a QR code. You can scan this to send your bitcoin.
4. At this point, one of two things will happen, depending on the model. Either the machine will dispense the cash, or it will give you a redeem code which you can use after awaiting a confirmation. Sometimes more than one confirmation (up to six) is needed before you can use the redeem code and get your cash.
5. If you want a receipt, you can print one once your transaction is complete.
• There is no denying the simplicity and convenience of ATMs. You already are used to using ATMs to withdraw fiat currencies, so the idea of using them to withdraw your bitcoin as cash has obvious appeal. It is a process which feels safe and familiar.
• When you use an ATM to convert your bitcoin to cash, you are not dealing with another individual. You do not need to worry about another party screwing up the transaction.
• If you pick an ATM which dispenses cash immediately, you have a fast and easy way to get your money.
• If you choose an ATM which requires you to wait for confirmations, you cannot just grab your cash and go. You need to wait through the confirmation process.
• ATMs are convenient, but you pay for convenience in the form of hefty fees. Some machines have been known to charge as much as 5-10%. Obviously dealing with this on a regular basis would be incredibly expensive.
4. Use a bitcoin exchange.
One more thing you can do is join a bitcoin exchange.
A lot of people do not think of this option, but it works.
You will discover that there are two different types of bitcoin exchanges:
• Sites where you can buy and sell bitcoin
• Sites where you can trade cryptocurrency pairs
Any site with a simple buy/sell function should suffice, so long as it allows you to sell bitcoin in exchange for a fiat currency of your choice.
Sites which are set up for trading also are fine, though they are a little more complicated to use.
Here are a few sites which I recommend for selling your bitcoin:
Here is a list of US friendly bitcoin fiat exchanges where you can use U.S. dollars to buy bitcoin and you can sell bitcoin for U.S. dollars.
Changelly is another good site for selling bitcoin, but only in exchange for other cryptocurrencies, so it does not work to convert to cash.
Just as an example of how this can work, let’s consider CEX.IO.
Here are the steps you would take to sell your bitcoin for cash.
- Register an account on CEX.IO.
- Deposit bitcoin into your account on CEX.IO.
- Once you have a bitcoin balance, check the top menu on the site for “Buy/Sell.” Click on it.
- On the page which opens next, click on the “Sell” tab.
- On the left, choose “BTC” as the currency that you are selling.
- On the right, pick whatever fiat currency you want. You can choose US Dollars, British Pounds, Euros or Russian Rubles.
- Put in however much bitcoin you want to sell. You will see how much cash you can get in return for it. Because the exchange rate fluctuates on a constant basis, the website provides you with a fresh price every couple of minutes. If you do not like the rate you see right now, you can wait and see if a better one becomes available.
Once you have completed the transaction, you will have fiat funds in your CEX.IO account. At that point, you can withdraw them. You can transfer them to a bank account or you can withdraw them using a credit or debit card. Once the fiat funds are in your bank account, you can then withdraw them as regular cash.
• On an exchange platform, you have the option to buy, sell and trade cryptocurrencies.
• On CEX exchange you will usually get a premium when selling bitcoin.
• Some platforms (like CEX.IO) show you updated exchange rates every few minutes so that you can sell when the price is in your favour.
• If you want to conduct other currency conversion transactions on the site, you may be able to.
• Once you have transferred your fiat funds to a bank account, you can withdraw your cash anytime via a standard ATM.
• Not all exchanges accept customers from every country, and not all exchanges support cryptocurrency to fiat conversions either.
• A few extra steps are involved if you use this method.
5. Sell your bitcoin in person.
Finally, another option for selling your bitcoin is to do it in person. You can do this by joining a local bitcoin meetup group, or you can check on social networking sites like Facebook to see if there are any local groups.
If you decide to use this method to sell your bitcoin, you will be meeting with the buyer face-to-face. You should of course schedule this meeting to take place in a public venue so that you are minimizing your personal risk. If possible, you should ask the trader to show you public feedback which they may have from a site like LocalBitcoins.
Once you arrive at the meeting, you can make the exchange however you have planned it. You will probably both show up with your smartphones. The buyer will hand you the cash, and you will transfer the bitcoin to his or her bitcoin address. Then you will go your separate ways.
• This can be a fairly anonymous way to exchange bitcoin. You do not need to demand identification from each other, so long as that suits you both.
• This can be a fast and easy method if you find the right person and the right location to meet. And if it works out, you could even end up with a repeat buyer who is easy to deal with in the future.
• You have to deal with another person face-to-face. You have no idea how that will go. They could stand you up and waste your time, or they could show up and mug you, etc. Of course, many of these transactions go by without a hitch, so there is no need to be paranoid. Still, a lot of people prefer a method where less can go wrong.
• There is no third party to help you out should something go wrong, and no such oversight to prevent problems from occurring in the first place.
Conclusion: It Is Faster And Easier Than Ever to Sell Bitcoin For Cash
While bitcoin is great to invest in, there are going to be times when you want to convert your bitcoin into a fiat currency like US Dollars. Thankfully, there are multiple methods available to you to convert your bitcoin into cash. Whether you go through a P2P site like BitQuick or LocalCoins, you use an ATM, or you go through a bitcoin exchange, it is easier than you think to convert your cryptocurrency funds into fiat funds and withdraw them.
How to Use Bitcoin ATM in 2020
Today, the popularity of the bitcoin ATM business is growing rapidly due to the improved technology, increased functionality of devices and, above all, the increased demand for this service. Therefore, many entrepreneurs are interested in this particular industry.
The first Bitcoin ATM was called Robocoin. It was commissioned on October 29, 2020, in Vancouver, and processed over 1,000,000 Canadian dollars in the following months. There are currently 4 Bitcoin ATMs in the USA, 4 in Canada, one in the UK and one in Singapore, and the number is constantly increasing. Lamassu and BitAccess were the next manufacturers to take the lead. What other Bitcoin ATMs are there? Find out in this article!
How Does Bitcoin ATM Work
Although there are countless types of ATMs from different manufacturers, they all mostly work the same way.
A Bitcoin ATM is connected via the Internet to the Bitcoin blockchain via the Internet and gives the user the address to which the cryptocurrency has been transferred (in both the usual way and in the form of a QR code). At the same time, cryptocurrency is transferred from one of the wallets of the company that owns the ATM.
Usually, 2 main options are available for users:
Whether the Bitcoin ATM could be used anonymously or not depends on the legal requirements of the country where it is installed. Although in some jurisdictions they can be used anonymously, in most cases the ATM camera takes a picture of the user’s face, and sometimes the client is required to show their ID to the camera.
Even if some companies offer the possibility of using an ATM anonymously, users should not forget about the lack of complete anonymity of bitcoin itself, as transactions can be tracked and a wallet can be linked to a specific person.
In most cases, ID documents are not required, but in some states in the US and parts of Canada clients have to allow a Bitcoin ATM to scan their driver’s license or another form of an identification document.
The commission fee in a Bitcoin ATM depends on the pricing policy of the operator company. In most cases, it is 7-9% of the transaction amount.
Bitcoin ATMs do not usually support credit cards, since the user can later request a chargeback, and it is impossible to cancel a transaction on the Bitcoin blockchain.
There are some Bitcoin ATMs in the US that allow the purchase of bitcoin using a credit card, but there are only a few dozen of them. The vast majority of Bitcoin ATMs works exclusively with cash.
According to data provided by the Bitcoin ATM Map, the installation speed of new ATMs has been growing since 2020. There are now 5,914 ATMs in total, of which more than 3,000 are located in North America.
How to Buy or Sell Bitcoin Using ATM
When buying crypto, you will need to deposit cash in the currency you’re buying with. Then, the amount will be converted into the equivalent in BTC and after a while, it will be credited to the previously entered wallet, or you will need to create one if you don’t have it or the machine requires you to make a new one.
When withdrawing funds, you need to show the address of your wallet by bringing it closer to the QR code scanner on the machine, and then enter the equivalent of bitcoin that you want to sell by converting it into fiat.
There are several security procedures for each operation. You may be asked to enter a PIN code, which will be sent to the mobile phone number that you entered earlier or to confirm your identity by scanning your ID or taking a selfie.
The steps you need to follow vary depending on which model of crypto ATMs you’re using, but the general algorithm is as follows:
- Pass verification. In most cases – using an SMS code, but there are options with scanning ID cards and even fingerprints. The verification step is not present for some models.
- Enter the bitcoin address to which you want to transfer funds. This is done either using the keyboard (and then you need to be careful to avoid typos) or using the QR code generated by the wallet application. Some terminals allow you to generate new addresses and keys, but it is better not to rely on this function.
- Deposit cash.
- Confirm the operation.
You can even buy a Bitcoin ATM. The terminal itself is $ 3,000 to $ 8,000 depending on the model, but other fees (delivery, installation, taxes, fees, and so on) bring the “starting” cost up to 10-15 thousand dollars per terminal.
You can buy bitcoin ATMs in either specialized online stores or directly from one of the four dozen manufacturers.
9 Best BTC ATM to Use in 2020
There are many types of Bitcoin ATMs, offering various features. As you can see below, there are quite a few ATM manufacturers, for example, General Bytes, Genesis Coin, Lamassu, BitAcess, and others. We will highlight only the best Bitcoin ATMs in this review.
Using this Bitcoin ATM you can buy Bitcoin for cash in more than 200 countries around the world. The ATM takes a 7% commission fee. As for verification, you only need the QR code of your Bitcoin wallet to make a transaction.
They produce four ATM models: Gaia, Sintra, Sintra Forte, Douro II (the latest one).
At the moment, Lamassu has already sold more than a hundred of these terminals; they are scattered all around the world.
How to buy crypto at a Bitcoin ATM made by Lamassu?
- Scan your Bitcoin wallet
- Insert cash
- Click “Send Bitcoins”
#2. Genesis Coin
Genesis1 is the most popular crypto ATM produced by the Genesis Coin Corporation, and, as it features the AML/KYC verification procedure, users have to remember to have a passport with them. Additionally, upon request, an additional fingerprint scanner, the ability to run verification checks via SMS, an ID card reader and a high-definition camera can be added to the machine to comply with applicable legal standards.
The ATM supports three cryptocurrencies: Bitcoin, Litecoin and Dogecoin. Cash withdrawal is limited to $6800. The price of one terminal is $14,500.
#3. General Bytes
The Czech company General Bytes has been ranked second for the number of implemented crypto machines. The majority of their ATMs are located in Europe due to the geographical location of the company’s headquarters.
There are two Bitcoin ATMs in the General Bytes product line: BATMTwo and BATMThree. Both are based on the Android operating system. In addition to having to complete the KYC/AML procedure, the client must also provide their email. User verification is carried out by operators and takes about 15 minutes.
BitAccess is a Canadian Blockchain company producing Bitcoin ATMs that allow clients to deposit cash and instantly receive a digital wallet containing the equivalent in Bitcoin, or exchange Bitcoin for fiat currency. The ATMs are spread around the world. Click here to find your nearest BitAccess ATM.
How to use a BitAccess ATM?
- Click Start
- Enter the phone number and click “Proceed”
- Enter the verification code sent to your mobile number
- Scan the QR code of the BTC address to which you want to receive BTC
- Deposit money and continue
- Coins will be sent to your BTC address
Coinme is a leading blockchain company. It helps the world gain access to digital currency. Coinme became the first state-licensed Bitcoin ATM operator in the U.S. and now, through their partnership with Coinstar, operates one of the largest bitcoin kiosk networks in the world.
How to purchase BTC with a Coinme Kiosk?
- Insert ID to Create Wallet
- Purchase Bitcoin with Cash
- Manage In Coinme Wallet
Coinsource is a rising star among the US crypto ATM operators. Founded in 2020, the company spread more than 600 machines all across the States, with plans to install even more. So far, 2020 was good for them, as they’ve expanded their PaaS (Platform as a Service) model to allow others to rent their machines. It looks like they became a strong contender to become the largest bitcoin kiosk network in the country.
How to purchase BTC with a Coinsource Kiosk?
- Log in with your ID
- Input your wallet address (scan a QR code or enter it manually)
- Enter your cash
Coinflip is a blockchain company that doesn’t focus on a single cryptocurrency but instead offers a multicurrency ATMs to crypto enthusiasts. Not only that, but they also have one of the lowest fee rates among other ATM providers, making their services even more customer-friendly.
How to purchase BTC with a Coinflip ATM?
- Choose language
- Press “Start”
- Enter your mobile number
- Receive the validation code and enter it
- Select “Buy Bitcoins”
- Choose whether you already have a Bitcoin wallet (yes – scan it later, no – generate and print new one)
- Scan QR code
- Insert your cash.
Libertyx is a company that decided to go a little bit further for its clients. As of now, they are the only company that allows you to buy Bitcoins at usual ATMs with your debit card, in addition to traditional kiosks. Both options would require you to use Libertyx mobile app, so if you plan on using their services, you should register an account there if you don’t have one.
How to purchase BTC with a Libertyx ATM?
- Use the LibertyX store locator and find a debit kiosk location near you. Use the filter to select “Kiosk” to only show debit kiosk locations
- Click the location and click “Purchase bitcoin here”
- Enter your bitcoin address and specify how quickly you would like the bitcoin to arrive
- Enter the purchase amount
- Once you are at the terminal, scan your QR code on the terminal screen
- Insert your debit card (no credit cards)
- Enter your debit card PIN
- Receive your BTC
The process is pretty much the same when buying from the kiosk.
Digitalmint is one of the industry leaders among crypto ATM providers. While it appeared only recently, the company already managed to spread its influence all across the USA. Digitalmint offers to its users the access not only to Bitcoin but to Litecoin and Ethereum as well, though those options will be harder to find.
How to purchase BTC with a Digitalmint ATM?
- Type in your phone number and your PIN
- Scan or enter your bitcoin wallet address
- Insert the desired amount of cash and get the ATM receipt
Bitcoin ATM Near Me
Is there a Bitcoin ATM near you? You can check on the CoinAtmRadar website, where it is possible to view a map with all the ATMs where you can buy and sell cryptocurrencies.
Using this service you can:
- Explore the Bitcoin ATM Map
- Locate the nearest crypto ATMs
- Get all the necessary data about that ATM (commission fees, limits, whether it is buy-only, sell-only or buy/sell)
- Get directions from your location to the selected ATM
Most Bitcoin ATMs are located in the United States and Europe. The leader for the number of crypto ATMs in Europe is the UK.
How to Use Bitcoin ATM in the USA and Canada
As long as you live in a somewhat big town, you will at least some crypto ATMs available. For your convenience, here is the map of Bitcoin ATMs in the USA and Canada.
Source: Coin ATM Radar
How to Use Bitcoin ATM in the UK
It is harder to find ATM in the United Kingdom, with the majority concentrated in London and its suburbs. Still, with the use of maps you can find it easily.
Source: Coin ATM Radar
How to Use Bitcoin ATM in Australia
Australia is a rather big country with insufficient coverage of Bitcoin ATMs. Most of them are concentrated near Melbourne, but you can find some in Sydney and Adelaide.
Source: Coin ATM Radar
How to Use Bitcoin ATM in Singapore
Currently, there are only 8 BTC ATMs in Singapore, with 6 of them in the downtown area. You can find all of them on this map.
Source: Coin ATM Radar
Using Bitcoin ATMs is very simple, especially if there is one near you.
Please note that some ATMs may require you to scan identity documents and may also request a phone number for KYC purposes. However, that usually happens when operations are performed with a large number of cryptocurrencies.
As it has been mentioned previously, there are quite a few crypto ATMs in the world, some of which only allow buying bitcoins, some, only selling them. There are very few ATMs that can perform both types of operations.
You can also buy Bitcoin or any other cryptocurrency directly via our exchange service.
Changelly is a secure instant crypto exchange that has 150+ cryptocurrencies available to be swapped and bought at market-best rates. Operating since 2020, the platform and its mobile application attract over a million visitors monthly, who all enjoy quick and simple exchanges, low transparent fees, and 24/7 live support.
How to Buy Bitcoin
Despite receiving significant attention in the financial and investment world, many people do not know how to buy the cryptocurrency Bitcoin, but doing so is as simple as signing up for a mobile app. With cryptocurrency back in the news again, now’s a better time than ever to delve into the weeds and learn more about how to invest. Here’s a breakdown of everything you need to know in order to buy bitcoin.
- To buy bitcoin, you must first sign up for a bitcoin wallet.
- Traditional payment methods such as a credit card, bank transfer (ACH), or debit cards will buy bitcoins on a bitcoin exchange using a bitcoin wallet as a depository.
- Bitcoin experiences price volatility and remains an uncertain commodity in terms of taxation and legality.
What Do I Need to Buy Bitcoin?
1. Digital Wallet: In order to conduct transactions on the bitcoin network, participants need to run a program called a “wallet.” Bitcoin is not technically “coins,” so it only seems right that a bitcoin wallet would not actually be a wallet. Bitcoin balances are maintained using public and private “keys,” which are long strings of numbers and letters linked through the mathematical encryption algorithm used to create them.
The public key is the location where transactions are deposited to and withdrawn from. This is also the key that appears on the blockchain ledger as a user’s digital signature, not unlike a username on a social media newsfeed. The private key is the password required to buy, sell, and trade the bitcoin in a wallet. A private key should be a guarded secret and only used to authorize bitcoin transmissions. Some users protect their private keys by encrypting a wallet with a strong password and, in some cases, by choosing the cold storage option; that is, storing the wallet offline. Coinbase offers a secure “multisig vault” to host user keys.
A bitcoin wallet should not be used for long-term storage. Instead, bitcoin or its key should be stored in a secure wallet such as one that uses a multi-signature facility for security.
2. Personal Documents: The U.S. Securities and Exchange Commission requires users to verify their identities when registering for digital wallets as part of its Anti-Money Laundering Policy. In order to buy and sell bitcoin, you will need to verify your identity using several personal documents including your driver’s license and Social Security number (SSN).
3. Secure Internet Connection: If you choose to trade bitcoin online, use discretion about when and where you access your digital wallet. Trading bitcoin on an insecure or public wifi network is not recommended and may make you more susceptible to attacks from hackers.
4. Bank Account, Debit Card, or Credit Card: Once you have a bitcoin wallet, you can use a traditional payment method such as a credit card, bank transfer (ACH), or debit card to buy bitcoins on a bitcoin exchange. The bitcoins are then transferred to your wallet. The availability of the above payment methods is subject to the area of jurisdiction and exchange chosen. Below is a screenshot of the bitcoin interface on Coinbase showing how to buy and sell bitcoin and also Bitcoin Cash, Ethereum, and Litecoin, which are other popular virtual currencies. The user clicks the “Buy” tab to buy digital currency and the “Sell” tab to sell digital currency. You select which currency you are buying/selling and which payment method (your bank account or credit card) you want to use.
Depending upon the exchange, there may be benefits and disadvantages to paying with cash, credit or debit card, or bank account transfer. For instance, while credit and debit cards are among the most user-friendly methods of payment, they tend to require identification and may also impose higher fees than other methods. Bank transfers, on the other hand, typically have low fees, but they may take longer than other payment methods.
5. Bitcoin Exchange: After you’ve set up your wallet with a payment method, you’ll need a place to actually buy bitcoin. Users can buy bitcoin and other cryptocurrencies from online marketplaces called “exchanges,” similar to the platforms that traders use to buy stock. Exchanges connect you directly to the bitcoin marketplace, where you can exchange traditional currencies for bitcoin.
Remember that the bitcoin exchange and the bitcoin wallet are not the same things. Bitcoin exchanges are similar to foreign exchange markets. The exchanges are digital platforms where Bitcoin is exchanged for fiat currency—for example, bitcoin (BTC) for U.S. dollars (USD). While exchanges offer wallet capabilities to users, it is not their primary business. Since wallets must be secure, exchanges do not encourage storing large amounts of bitcoin or for long periods. Therefore, it is advisable to transfer your bitcoins to a secure wallet. Because security must be your top priority when choosing a bitcoin wallet, opt for one with a multi-signature facility.
There are many well-established exchanges that provide one-stop solutions with high security standards and reporting, but due diligence should be exercised when choosing a bitcoin exchange or wallet. Besides Coinbase, other popular exchanges include Coinmama, CEX.IO and Gemini.
How to Buy Bitcoin
Alternate Ways of Buying Bitcoin
While an exchange like Coinbase remains one of the most popular ways of purchasing bitcoin, it is not the only method. Below are some additional processes bitcoin owners utilize.
1. Bitcoin ATMs: Bitcoin ATMs act a bit like in-person bitcoin exchanges. Individuals can insert cash into the machine and use it to purchase bitcoin which is then transferred to a secure digital wallet. Bitcoin ATMs have become increasingly popular in recent years; Coin ATM Radar can help to track down the closest machines.
2. P2P Exchanges: Unlike decentralized exchanges, which match up buyers and sellers anonymously and facilitate all aspects of the transaction, there are some peer-to-peer (P2P) exchange services which provide a more direct connection between users. Local Bitcoins is an example of such an exchange. After creating an account, users can post requests to buy or sell bitcoin, including information about payment methods and price. Users then browse through listings of buy and sell offers, choosing those trade partners with whom they wish to transact. Local Bitcoins facilitates some of the aspects of the trade. While P2P exchanges do not offer the same anonymity as decentralized exchanges, they allow users the opportunity to shop around for the best deal. Many of these exchanges also provide ratings systems so that users have a way to evaluate potential trade partners before transacting.
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