When it comes to purchasing and using bitcoins, it is important to know what you are doing. That is where this guide comes into play. In the following chapters, we will tell you the best ways to buy bitcoins as well as answer some of your questions about bitcoins, how to avoid scams and so much more!
- 1 How To Buy Bitcoins?
- 1.1 Chapter 1 – What Are Bitcoins?
- 1.2 Chapter 2 – How To Purchase Bitcoins
- 1.3 Chapter 3 – Choosing The Best Bitcoin Exchange For You
- 1.3.1 Do Not Get Scammed – Reputation Matters!
- 1.3.2 Keep Your Personal Information Safe – Check Their Privacy Policies
- 1.3.3 Check Out Their Fees – Do Not Get Overcharged!
- 1.3.4 Make Sure You Are Aware Of Conversion Rates
- 1.3.5 How Many Bitcoins Are You Planning To Buy?
- 1.3.6 How Soon Will You Need To Be Able To Access Your Bitcoins?
- 1.3.7 How Do You Plan To Pay For Your Bitcoins?
- 1.4 Chapter 4 – How You Pay For Bitcoins
- 1.4.1 Where Can You Buy Bitcoins?
- 1.4.2 Buying Bitcoins With Your Paypal Balance
- 1.4.3 Buying Bitcoins With Your Debit Cards And Credit Cards
- 1.4.4 Buying Bitcoins Using Cash
- 1.4.5 Exchanging Cash For Bitcoins, Via Bitcoin ATMs
- 1.4.6 Buying Bitcoins With A Bank Transfer Or Your Bank Account
- 1.4.7 To Recap
- 1.5 Chapter 5 – Common Questions And Concerns
- 1.5.1 Why Does It Take A While To Purchase Bitcoins?
- 1.5.2 When Is The Best Time To Invest In Bitcoins?
- 1.5.3 Since Bitcoins Are Similar To Stocks… Can I Invest In Bitcoin Stock Too?
- 1.5.4 Can I Sell Bitcoins Too?
- 1.5.5 Why Do Some Exchanged Require Me To Upload My Identification Card Before I can Buy or Sell Bitcoins?
- 1.5.6 Before I Buy Bitcoins, Will I Have To Sign Up For An Online Account?
- 1.5.7 Aside From Buying Bitcoins, Is There Any Other Way I Can Earn Bitcoins?
- 1.5.8 Do I Have To Pay Taxes On Bitcoins?
- 1.5.9 Can Anyone, Anywhere Purchase Bitcoins?
- 1.5.10 But Is It Legal?
- 1.5.11 What Would Make Bitcoins A Worthwhile Investment In The First Place?
- 1.5.12 Is There Any Benefit To Purchasing Physical Bitcoins?
- 1.5.13 Can I Purchase Parts Of A Bitcoin Or Am I Required To Buy A Whole Bitcoin?
- 1.5.14 What Occurs When We Purchase Bitcoins?
- 1.5.15 Is My Identity Kept Anonymous In The Process Of Purchasing Bitcoins?
- 1.5.16 Why Is It Better To Buy Bitcoins, Rather Than Mine Them Myself?
- 1.5.17 Is It Possible To Use More Than One Exchange?
- 1.5.18 Why Are People In China Purchasing So Many Bitcoins All Of A Sudden?
- 1.5.19 How Can I Avoid Scams?
- 1.6 Chapter 6 – How Can I Avoid Being Scammed And Avoid Losing A Lot Of Money?
- 1.6.1 Avoid Bitcoin Investments And Anyone Who Claims To Pay Interest On Bitcoins
- 1.6.2 Do Not Fall Victim To The “If You Send Them, Then I Will Pay You” Scam
- 1.6.3 Always Do Your Research!
- 1.6.4 Be Cautious When It Comes To Altcoins
- 1.6.5 Always Check A Persons Ratings!
- 1.6.6 Overall, Using These Tips Will Help You Avoid Being Scammed
- 1.7 Chapter 7 – Keep Your Bitcoins Safe And Secure
- 1.8 Chapter 8 – Our Top Picks For Exchanges Based On Your Country
- 2 At The End Of The Day
While it may seem confusing at first and you may become frustrated, we are here to make your life easier and put you on the right path for purchasing and using bitcoins!
How To Buy Bitcoins?
Are you ready to start using bitcoins but want a bit more information first? You have come to the right place! Let's get started, shall we?
Chapter 1 – What Are Bitcoins?
To put it simply, a bitcoin is a form of digital currency. Bitcoins are not a printed currency like U.S. dollars or euros. Bitcoins are not controlled and are held electronically in an online account. They are made by people and are exchanged through exchanges online.
In many ways, bitcoins are exactly like regular money, the difference being that it only exists online. It can be used to buy things online and can be traded digitally. The biggest difference is that unlike U.S. dollars or euros, it cannot be controlled by banks.
To make things a bit simpler, think of bitcoins as a virtual currency that works similar to real money, except it is not controlled by a bank and cannot be used outside of the internet – meaning you cannot use your bitcoin balance at your local supermarket or drug store.
Chapter 2 – How To Purchase Bitcoins
A lot of people are becoming more and more interested in bitcoins and are interested in learning how to buy them. This chapter is going to fill you in on all that!
In three simple steps, you can have bitcoins of your own! First, you will want to pick out a bitcoin exchange. Second, you will exchange your local currency, such as U.S. dollars or euros, for bitcoins. Finally, you will transfer your bitcoins to a safe, online bitcoin wallet that will keep your bitcoins safe.
Pretty simple right?
However, for more in depth information on buying, storing, and using bitcoins, continue reading this guide. In the following chapters we will be going over some of the following points:
- Avoiding scams
- Where and how to buy bitcoins
- Keeping your bitcoins safe and secure after you buy them
- Choosing the right exchange for you
Keep in mind that while we have researched which exchanges we feel are the safest and are not scams. However, we strongly encourage you to do your own research as well, to avoid being scammed out of your bitcoins or worse, having your personal information stolen.
While we do extensive checks to ensure that the exchanges we mention are safe, when you make your final decisions, make sure you do so based on your own judgements as well.
Chapter 3 – Choosing The Best Bitcoin Exchange For You
There are several things you need to take in mind in order to find the best bitcoin exchange for your needs. Below, we will cover these items as well as give you tips to ensure that you find an exchange that works for you and what your bitcoin needs are.
Do Not Get Scammed – Reputation Matters!
When you are looking for an exchange that is going to work for you, you definitely want to take into consideration how long the exchange has been in service, what the reviews for the exchange are and whether the exchange is trustworthy or has been flagged as a scam or potentially dangerous site.
Always research reviews from other bitcoin customers before making your decision about a bitcoin exchange.
Keep Your Personal Information Safe – Check Their Privacy Policies
If you want to purchase bitcoins anonymously, you will not be able to purchase them with a bank transfer, paypal, debit or credit cards, or any payment options that are available that cause you provide personal information that can be used to identify yourself.
There are several ways you can pay for bitcoins without your identity being disclosed. You can buy bitcoins with your local currency or buy them with a cash deposit such as a visa gift card.
You can also buy bitcoins by purchasing them from other bitcoin holders online or even by depositing money into a bitcoin ATM and the bitcoins will be transferred to your bitcoin wallet after your money is deposited.
Luckily there are many options for those who wish to purchase bitcoins without having to share their identity. Pretty cool, right?
Check Out Their Fees – Do Not Get Overcharged!
This one is pretty common with a lot of things online these days. You are going to want to take a look at their fees before you settle on an exchange that works for you. How much do they charge for their service? Depending on the way you wish to pay, these fees can vary greatly.
Along with this, you are going to want to keep in mind that what you are doing might make a difference in the fees as well. Are you trading? Withdrawing? Depositing? Some exchanges may offer discounts on their fees for larger transactions.
Make sure you check out their fees and know what you are going to be paying for before you pick an exchange – no one wants to find out they got changed a high hidden fee all because they did not take the time to read up on an exchanges policies!
Make Sure You Are Aware Of Conversion Rates
While there is no ‘set in stone' conversion rate for bitcoins, there are several online conversion tools out there to see what the average conversion rate is on any given day. This will allow you to know that you are not overpaying for bitcoins when you chose which exchange you want to use.
A good place to start would be CoinDesk as they check the average price per bitcoin by comparing several exchanges, giving you a fairly accurate exchange rate for the day.
Keep in mind that the value of bitcoins is always changing. That being said, you are going to want to check back fairly regularly to make sure you are getting the most for your money.
How Many Bitcoins Are You Planning To Buy?
If you are considering purchasing a substantial sum of bitcoins (more than 25 for example) you are going to want to use bigger exchanges rather than smaller ones. Many exchanges have limits as to how many bitcoins you can buy with your checking account or credit card.
That being said, you are going to want to be aware of the limits before you choose which exchange you plan to use.
On the flipside, if you intend to pay for your bitcoins with cash, most exchanges will not have a limit as to how many you can buy. Individual sellers, however, may have limits that are far lower than those of exchanges.
How Soon Will You Need To Be Able To Access Your Bitcoins?
Take into consideration that your initial bitcoin purchase is going to take a bit more time than your purchases after that initial one. That being said, you will want to consider if you need immediate access to your bitcoins before you chose an exchange and a payment method.
If you need your bitcoins right away, a bitcoin ATM is going to be your best option, if there is one where you live. However, some brokers also offer instant purchases regardless of the method you choose.
Keep in mind that if you are paying with a debit or credit card, you may need to wait for the payment to clear before you have access to your bitcoins. Do a little research to see the wait time for whatever method you plan to use in the exchange you have chosen. You may need to wait a day or two or you may have access to your bitcoins right away.
How Do You Plan To Pay For Your Bitcoins?
How you choose to pay for your bitcoins may prove to be more important than you initially would think. If you are already considering a way to pay for your bitcoins that you would like to use, you are a step ahead of some people! We will go over what payment methods you can choose in the next chapter!
Side Note: Before You Purchase Any Bitcoins, Set Up Your Bitcoin Wallet!
Many exchanges will not allow you to purchase bitcoins without a bitcoin wallet.
You should go ahead and set up a Bitcoin wallet prior to reading any further, if you haven’t set up one already. Whether you chose to use a hot wallet, a hardware wallet, an Android wallet, IOS and IPhone wallet, or Desktop wallet, you will need a bitcoin wallet of your choice before you are able to start buying bitcoins.
Chapter 4 – How You Pay For Bitcoins
While all this information about bitcoins may prove to be overwhelming and confusing, you are on the right track to fully understanding what you need to know about buying bitcoins! Now we will cover how you can pay for your bitcoins and where you can buy them!
Where Can You Buy Bitcoins?
There are several places you can buy bitcoins. You can buy them over the internet with a bank transfer, debit or credit card, or by putting money on a gift card and buying them that way.
You can also buy them through special bitcoin ATMs if you are lucky enough to have one in your current location. You can buy them locally for cash or you can even convert your Paypal balance to bitcoins online!
These are just some of the options you have when buying bitcoins. At the end of the day, the method is all the same though. You will have to convert your country’s currency, say U.S. dollars for example, into bitcoins. Now we will go into more detail about what payment options you have to choose from.
Buying Bitcoins With Your Paypal Balance
This can be tricky. There is no way to directly purchase bitcoins through paypal as it violates their terms and conditions. That being said, if you do get around this and decide to purchase bitcoins with your paypal account, you will find that fees are extremely high. You are better off using one of the methods we will mention later.
While you cannot directly buy bitcoins through paypal, you can buy other digital items and sell them for bitcoins, however this process again, is not one we highly recommend.
The reason to buy bitcoins with paypal? If you have a pre-existing PayPal balance, this might be a good option for you. Do a little research with it and you may find a way that works for you.
Why not use paypal to purchase bitcoins? With fees running higher than 12 percent, you are going to wind up spending a lot more money using this payment method. We strongly discourage using paypal to pay for bitcoins.
Buying Bitcoins With Your Debit Cards And Credit Cards
Seeing how using a debit card or credit card is the easiest and fastest way to make purchases online, it is no surprise that many people choose this method to pay for their bitcoins. There are several pros and cons with using this method however.
The benefits are that paying with a debit card or credit card is something you are probably already familiar with. You know how to enter all your information already and it is a fairly simple way to purchase bitcoins.
Another benefit is that your bitcoins are delivered to your wallet as soon as the purchase is cleared and your payment is received. This is definitely a plus compared to some other payment methods.
But what are the downfalls? Why shouldn't you use a credit card or debit card to pay for your bitcoins? For starters, the fees can be incredibly high. If you do not need your bitcoins immediately, there are cheaper methods you may want to consider using.
Another downfall is that you cannot buy bitcoins anonymously by using a credit card or debit card. You will have to provide your ID in order to use debit cards or credit cards to make your purchase.
If this is the method of payment you wish to use, we have a couple places where you can purchase bitcoins by using your debit cards or credit cards.
In the United States, Europe, Canada, and Singapore, you can use Coinbase to purchase bitcoins online. In Europe you may choose to use BitPanda as the exchange you prefer. For anywhere else in the world, you may want to take a look at CEX.IO or Coinmama as exchanges you may be interested in using.
Buying Bitcoins Using Cash
If you want to stay private and anonymous while purchasing bitcoins, this is the method for you. It will only take a few hours for you to get your bitcoins. Best of all, your identity will remain private. You do not have to wait around for a payment to clear and you do not need to show your ID.
Then why not purchase bitcoins with cash? Well for one, because privacy does not come cheap, you may find that the cash exchange is anywhere from 5 percent to 15 percent higher than market rate.
Another downfall is that it is far simpler to be a victim of a scam when you are purchasing bitcoins with cash. This means you always have to be alert when using cash to buy bitcoins.
If you are looking for good places to purchase bitcoins with cash, we have a few suggestions. LocalBitcoins is great if you are in Germany, while BitQuick is great if you are in the United States. Wall of Coins is great for other countries too.
Exchanging Cash For Bitcoins, Via Bitcoin ATMs
People sometimes think you can easily go to a department store and purchase bitcoins. Sadly that is not the case. However, ATMs that allow you to exchange cash for bitcoins are scattered all across the world! They work similar to regular ATMs, except when you insert your money, the bitcoins are deposited into your wallet. Pretty cool right?
Want to know if there are bitcoin ATMs in your area? Try using Coin ATM Radar and take a look, you never know, one might be in your area right now!
So what makes bitcoin ATMs a good way to purchase bitcoins with cash? For one, they are super private. You are not required to provide any personal information to use them. Another benefit is that if you are lucky enough to have a bitcoin ATM close by, you can quickly and easily buy bitcoins!
However, keep in mind that this privacy is not cheap. You will often pay between 5 percent and 15 percent more to exchange cash for bitcoins.
Buying Bitcoins With A Bank Transfer Or Your Bank Account
In most countries, it is more practical and far safer to purchase bitcoins using a bank transfer. Why is it the most preferred method of payment in the vast majority of countries worldwide?
For starters, using a bank account or a bank transfer is the best way to purchase a large amount of bitcoins. If you are looking for the lowest fees, a bank transfer or using your bank account is definitely the way to go.
However, if you do not wish to disclose your identity, then using your bank account or a bank transfer is not a good choice for you. This goes without saying, because clearly your identity will be linked to your bank account.
Another downfall is that when you use a bank transfer or your bank account to purchase bitcoins, you will be waiting as long as 5 days for your order to be completed. That being said it is definitely not one of the fastest methods.
If buying bitcoins with your bank account or a bank transfer is a method of payment that will work best for you, we have a couple exchanges that will work nicely for you.
If you are in the United States, Canada, Europe or Singapore, Coinbase is a great option for you. Another great option for those who live in Canada or the United States is Gemini. If you reside in Europe, BitPanda is a good choice for you as well!
No matter which payment method you choose, you should definitely do your research prior to settling on an exchange and keep the above suggestions in mind. Whether you choose to pay with cash, paypal, credit or bank transfer, you have to be aware of fees, wait times, scams and reliability of your chosen method.
Chapter 5 – Common Questions And Concerns
While purchasing bitcoins can be exceptionally confusing in the beginning, we are hoping that after going over some of the more common questions and concerns, you will feel more confident in your ability to purchase bitcoins.
Keep in mind that after your initial purchase, buying bitcoins will be a lot easier and you will feel a lot more confident in your purchases!
Why Does It Take A While To Purchase Bitcoins?
As we mentioned earlier, the amount of time you have to wait to receive your bitcoins varies depending on what payment method you choose to use. Bitcoins are not necessarily the problem here. Between payment methods and payment systems, the wait time can be anywhere from a couple of hours to a few days.
While the bitcoin sale itself may only take around ten minutes to process and confirm, payments made via bank transfers can take as long as five days in the United States to be completed.
That being said, since bitcoin sales only take around ten minutes to be confirmed, the longest wait for the actual bitcoin confirmation is hardly ever longer than an hour.
However, despite the fast rate that bitcoin purchases can be confirmed, the method of which you pay for your bitcoins means that certain exchanges and merchants cannot release your bitcoins to you any earlier than their listed wait time without risking penalties on their side of things.
To simplify, it is similar to when you deposit a check into a bank account. If you do not have the funds in your account, you may have to wait 24 hours for your check to clear and you have access to your money. Bitcoin exchanges made with bank transfers work in a similar manner.
When Is The Best Time To Invest In Bitcoins?
Much like stock, bitcoins are traded every minute of every day, meaning that their price changes every time someone buys or sells a bitcoin. You will want to follow a similar method with buying bitcoins. It is wiser to buy low and sell high.
But how can you ensure that you are getting a good price? Or better yet, how can you ensure you do not lose money over time?
Our advice is to use websites such as Cryptowatch and Bitcoin Wisdom to track the latest prices for bitcoins as well as to see how they have been increasing and decreasing in the most recent exchanges. This will help you to get a better idea of whether or not now is a good time to buy bitcoins.
Since Bitcoins Are Similar To Stocks… Can I Invest In Bitcoin Stock Too?
Until a bitcoin ETF gets approved, there are no actual stocks for bitcoins. Though bitcoins work similarly to traditional stocks, you cannot purchase them with a stock fund. This means you have to buy them yourself, not through a stock system.
Can I Sell Bitcoins Too?
Well if you could not sell bitcoins, no one would be able to purchase them, would they? Most exchanges allow you to sell your bitcoins! However, keep in mind that these exchanges charge a fee for selling your bitcoins just like they do for buying them.
Why Do Some Exchanged Require Me To Upload My Identification Card Before I can Buy or Sell Bitcoins?
Because of the Know Your Customer laws, some exchanges are required to store the identity of its clients for legal reasons.
Before I Buy Bitcoins, Will I Have To Sign Up For An Online Account?
When it comes to bitcoins, there are no accounts. Instead of a traditional account, before you purchase bitcoins, you will want to set up a bitcoin wallet. This is where all of your bitcoins will be stored for you.
Since a bitcoin wallet functions similarly to an account, many get this confused which is totally understandable. The biggest difference here, is that with a bitcoin wallet, it is your responsibility for keeping your bitcoins safe. The bitcoin wallet is not as secure as a bank account would be.
Aside From Buying Bitcoins, Is There Any Other Way I Can Earn Bitcoins?
Considering that bitcoins are just another form of money out there these days, you can earn bitcoins by requesting your employer to pay you in bitcoins instead of your local currency. However, keep in mind that some employers will not go for that idea, especially if they have no idea what bitcoins are.
Do I Have To Pay Taxes On Bitcoins?
Most countries will require you to pay some sort of tax on your bitcoins if you purchase them, then sell them for a profit. This is especially true in the United States, where you must do this for every transaction.
Due to this, it is highly recommended that you contact your country's tax authorities or IRS to ensure that you are not forgetting to pay all of the necessary taxes on your bitcoin sales and purchases.
Can Anyone, Anywhere Purchase Bitcoins?
While bitcoins are legal in most countries, it definitely helps to do a little research before you run off and purchase any. However, you do not need any special permission to buy, sell or use bitcoins as long as they are legal in your country!
But Is It Legal?
As we touched earlier, bitcoins are perfectly legal in almost every country in the world, making it one of the most consistent currencies to date. However, we do suggest that you do a quick online search to confirm that they are in fact legal in your country before you purchase or sell any bitcoins.
However, there is only a small handful of countries that do not allow bitcoin usage. As of 2015, bitcoins were banned in Bangladesh, Bolivia, Iceland, Ecuador, Vietnam, and Kyrgyzstan.
What Would Make Bitcoins A Worthwhile Investment In The First Place?
There are several reasons why lately, people have been interested in purchasing bitcoins and owning some of their own.
For many people, the use of bitcoins is the easiest way to send money to family members who are in other countries. Bitcoins are probably the most cost efficient ways to transfer money between countries.
Another reason is many people like the thought of investing in bitcoins and setting them aside, hoping that over time, bitcoins will only grow in value, making them worth far greater down the line. This makes bitcoins a really good investment for people who want to leave their families something when they pass away, for example.
You can also use bitcoins to purchase things online. Many big name companies such as Overstock, Newegg, Dell and Microsoft all take bitcoins as a form of payment.
Another reason why there is so much interest in bitcoins is that for people who enjoy the stock market, buying and selling bitcoins is an enjoyable pass time for them.
Considering the stock market is only open during the week, from 9 in the morning to 5 in the evening, many people exchange their bitcoins in between, thanks to the fact that bitcoins are constantly being traded at all hours of the day. The bitcoin market is very fast pace and for some, it is one of their favorite hobbies.
Is There Any Benefit To Purchasing Physical Bitcoins?
While it is possible to purchase physical bitcoins, which exist as metal coins with a secret private bitcoin key embedded inside them, purchasing physical bitcoins is highly discouraged. That is, unless you are a coin collector.
While the idea of owning the physical bitcoin may sound appealing, it requires you to put total faith in the person who creates them. Why is that? Well simply put, if you purchase a physical bitcoin, you are risking being scammed out of your actual bitcoin. It is possible that the creator has made two copies of the private bitcoin key.
This means that unless you open and withdraw the digital bitcoins as soon as you purchase the bitcoin, the creator could very well scam you out of your bitcoins by cashing in the key code before you have a chance to transfer your funds.
As sad as it is, there are a lot of people who would happily scam you out of your money these days. Always be careful. As we said, purchasing physical bitcoins is an extremely risky and discouraged practice.
Can I Purchase Parts Of A Bitcoin Or Am I Required To Buy A Whole Bitcoin?
You can certainly purchase a partial bitcoin! Every bitcoin can be divided up. Believe it or not, they can be divided up to the 8th decimal place. This means that you can purchase as little as 0.00000001 of a bitcoin. That small amount is commonly known as a satoshi.
To put it simply, most of the exchanged out there will allow you to buy as little as $5 worth of a bitcoin at a time.
This makes it far easier for people to obtain even a small amount of a bitcoin, rather than paying thousands for a whole one.
What Occurs When We Purchase Bitcoins?
Essentially, bitcoins are simply digital codes that are kept secret. When you purchase a bitcoin, the person you buy it from is using their wallet to give ownership of that bitcoin (or bitcoins) to you. When the exchange is finished, you are now the owner of the bitcoin, the person you bought it from no longer owns it.
This is similar to buying digital artwork online. Once the sale is complete, you own it. Simple as that.
Is My Identity Kept Anonymous In The Process Of Purchasing Bitcoins?
While your real identity may not be disclosed when you purchase bitcoins, it is not so much that you are kept anonymous, as it is that it is pseudonymous. Every bitcoin sale is public, but your true identity is not usually disclosed. However, as we mentioned earlier, this does depend on the method of payment you choose to use.
Why Is It Better To Buy Bitcoins, Rather Than Mine Them Myself?
When bitcoins were first discovered, anyone could mine them on their home computers. Now, years later, only powerful computers that are specialized with hardware made specially for bitcoin mining can handle the job.
Much like gold, it makes more sense to purchase bitcoins if you wish to have some, rather than mine them. When someone mines gold, they need powerful equipment in order to get the job done. Along with that, it costs a lot more to get that equipment than the gold may be worth. That is why most people just buy their gold.
Bitcoins are exactly like that. Unless you have a lot of money to spend and really want to get into the bitcoin mining business, buying bitcoins is just far more practical.
Is It Possible To Use More Than One Exchange?
Absolutely! If the exchange you are currently using has limits that are too low for your liking, you can easily sign up for an account on another exchange. This will allow you to purchase more bitcoins if you so choose. As long as the exchange is available in your country, you can sign up for as many exchanges as your heart desires!
Why Are People In China Purchasing So Many Bitcoins All Of A Sudden?
People in China seem to really like that bitcoins have a sound monetary policy and can be sold, bought, and used anywhere in the world. People who are looking to trade bitcoins are also enjoying the fact that bitcoins have an ever growing value with every passing month. This means there is a lot of money to be made by buying and selling bitcoins.
How Can I Avoid Scams?
Always do your research and pay attention to things that sound “too good to be true”. We will cover avoiding scams in more detail in the next chapter!
Chapter 6 – How Can I Avoid Being Scammed And Avoid Losing A Lot Of Money?
If you follow the advice we are about to give you, you will be able to easily avoid scams and keep your bitcoins secure. While there are countless scams out there that revolve around bitcoins, most of those who are looking to scam bitcoin users are targeting those who are new to the bitcoin world and those who are not very technically advanced.
If you take our tips into consideration, you should be able to quickly spot a scammer and be able to prevent yourself from falling victim to bitcoin scams.
Avoid Bitcoin Investments And Anyone Who Claims To Pay Interest On Bitcoins
If you are looking into a service that claims that they either pay interest on bitcoins or can increase your bitcoin amount, odds are they are a scam. Unlike banks, bitcoins do not really earn interest.
Keep in mind that if it seems too good to be true, odds are it is. Using a service that claims to pay interest or that will otherwise earn you more bitcoins is not only a very risky practice, but in most cases, it is a scam and should be avoided at all costs.
Do Not Fall Victim To The “If You Send Them, Then I Will Pay You” Scam
This is a scam that many people fall victim to. It normally plays out like this:
“If you send the bitcoins to me, when they are in my wallet I will pay you through paypal. But you have to send me the bitcoins first.”
Under no circumstances should you ever conduct a trade in this fashion. Since bitcoin payments cannot be reversed, if you end up sending your bitcoins to a person who is scamming you, not only will that person be able to keep your bitcoins, but they will not have to pay you in return.
Since bitcoins are pseudonymous in nature, paypal cannot force that person to pay you either. Keep in mind that bitcoin puchashases do not always require someone to disclose their identity. This means that neither the buyer or the sellers information is stored, which means it is impossible to recover your bitcoins once you transfer them.
This is a scam that is used over and over again, and we strongly discourage you from ever sending bitcoins in this fashion.
Always Do Your Research!
Before you ever buy or sell bitcoins on any exchange, it is strongly encouraged that you do your homework. Make sure that the exchange you are planning on using is not only trustworthy, but that it has good reviews.
Forums such as Reddit are a great place to look for reviews from other people who have used the exchange you are looking at. If it seems sketchy, odds are it is. Trust your instincts.
You can also do a quick google search to see what other people are saying about the exchange you are interested in using. Many sources offer lists of exchanges that have good reviews and have been proven to be honest and scam free.
Always remember, that if you feel like an exchange is offering an almost unrealistic value or you just have a feeling it is a scam, it is better to avoid it than fall victim to the many bitcoin related scams out there these days.
Be Cautious When It Comes To Altcoins
Altcoins are another cryptocurrency similar to bitcoins. These altcoins are exchanged all over the world in hundreds, if not thousands of exchanges worldwide. Altcoins are currently experiencing a huge spike in their volume and price, meaning that right now it may seem appealing to invest in some.
However, it is wiser to steer clear of these other crytocurrencies, as many are crashing quickly, which ultimately means that people are losing large amounts of money due to buying them at what once seems liked a good price, only for their value to fall quickly.
Always Check A Persons Ratings!
Similar to when you purchase something off eBay, if you are using a peer to peer exchange, you should always check the users ratings before doing business with them. If they have good ratings and positive feedback, chances are you can trade with them without any problems.
However, if they have low ratings and bad reviews, you may want to avoid them at all costs, since they could very easily be a scammer. You are always going to want to choose a reliable seller when purchasing bitcoins. The same goes with selling them. Always try to check a persons ratings before doing any kind of business with them.
Overall, Using These Tips Will Help You Avoid Being Scammed
It is a shame that we live in a world where people will continuously try to scam people out of their hard earned money. But people will and that is why we have composed this list of tips, to help you avoid these scams before you have to learn the hard way like so many before you have.
Be vigilant. Be cautious. Do your research and remember, if it seems too good to be true, it probably is.
Chapter 7 – Keep Your Bitcoins Safe And Secure
You should never keep your bitcoins stored on an exchange site! This is one of the biggest mistakes that bitcoin users make and due to hacks and scams, this is how more than 504,000 bitcoins (about 1 billion USD) have been lost over time!
The only way you can ensure the maximum safety and security for your bitcoins is when you place them in a bitcoin wallet that you have total control over! This is extremely important to remember.
When you leave your bitcoins with a middleman on an exchange, you are risking losing an incredible amount of money. And remember, once your bitcoins are gone, they are gone for good. There is no way to get them back, regardless of what happened.
So right now, before you even go a step farther, get a bitcoin wallet to make sure you have total control over your bitcoins. If your bitcoin balance is high, a hardware wallet is safest for you. Why is that? Hardware wallets are flash drive sized, devices that are offline, storing your bitcoins far away from the prying hands of malware, hackers and scammers.
This is the safest place for large amounts of bitcoins. Because come on, who wants to lose thousands, if not millions of dollars worth of bitcoins? Hardware wallets provide the simplest way to keep your bitcoins safe and easily backed up.
Plus with hardware wallets, there is less room for you to mess up. Even if you do not know much about technology, there is very little you can do to mess up with a hardware bitcoin wallet.
Chapter 8 – Our Top Picks For Exchanges Based On Your Country
We have composed the following list of our top picks for exchanges based on what country you reside in. Remember, you are always encouraged to do your own research before settling on any exchange, but this list is a good place to start.
If you live in Nepal and wish to exchange bitcoins, LocalBitcoins is one of the simplest and most efficient ways to purchase bitcoins.
If you live in Nigeria and wish to purchase bitcoins, Luno is one of the best ways to purchase bitcoins while using a bank transfer. Luno offers high limits, is backed by United States investors and has some of the lowest transaction fees.
Similar to Nigeria, if you live in Malaysia and wish to purchase bitcoins using a bank transfer, Luno is probably your best option.
The United Kingdom
If you live in the United Kingdom and wish to purchase bitcoins, we recommend using BitBargain. While BitBargain works similarly to LocalBitcoins, it is not a global exchange. BitBargain only offers their services within the United Kingdom.
France Or Poland
If you live in either France or Poland and wish to purchase bitcoins, you are in luck. Both countries have over 35 exchanges that are available in their countries, due to the popularity of bitcoins in Europe right now. There are many tools online that can help you find, research and rate these exchanges.
If you live in Saudi Arabia and wish to purchase bitcoins, your most reliable bitcoin exchange would be BitOasis. BitOasis has recently extended their services to Saudi Arabia and they have very good ratings and reviews.
If you live in India and wish to purchase bitcoins, your best option would be Unocoin. It is considered India's best bitcoin exchange and they have a huge volume as well.
Unocoin is very unique too, as they do not only offer online bitcoin exchanges, but they also offer a financial services to their Indian customers in a way that no other exchange currently does.
The United States
If you live in the United States and wish to purchase bitcoins, a good place to start is Coinbase. They are available in more than 30 countries and have high limits and instant buy options if you pay with your credit or debit cards.
At The End Of The Day
While purchasing bitcoins may seem confusing at first, we sincerely hope that our guide has made it all a little easier for you. From buying bitcoins, to choosing an exchange, to common questions and concerns and avoiding scams, we hope that you have been able to understand bitcoins a bit better.
There are a lot of options out there when it comes to purchasing, selling and using bitcoins. In the years to come, it is expected that bitcoins will become more widely used and available. Now is the time to buy.
Remember these key points and you will be well on your way to being a pro when it comes to bitcoins!
- Always keep your bitcoins secure in a wallet, never rely on exchanges or other third party services to keep your bitcoins safe
- Anyone can purchase bitcoins and you do not need to purchase a whole bitcoin, most exchanges allow you to purchase as little as $5 worth of a bitcoin at a time
- Research your exchange before you settle on it!
- Bitcoins can be used online for purchases with many big name companies
- Always research the fees before you buy or sell bitcoins
- Avoid physical bitcoins – they can be a scam!
- There are exchanges available all over the world, making bitcoins one of the easiest ways to transfer money internationally
- Your privacy depends on your chosen payment method. Paying with cash will allow you to remain almost completely anonymous
- Be Safe – Bitcoins are just like real money, you want to keep it safe at all times. There are a lot of scams out there. Always proceed with caution. If it seems too good to be true, odds are it is.
After your initial bitcoin purchase, everything will come together and be so much easier. Just take your time. You've got this.