Where and How to Buy Bitcoins Best Ways to Buy, CHAPTER 4-6

CHAPTER 4
Frequently Asked Questions

When is the Right Time to Buy?
As with any market, nothing is for sure. Bitcoin is traded 24/7 and its price changes every second.

Bitcoin's price in US dollars during 2015 and 2016. It's impossible to say when to buy.

Use tools like Bitcoin Wisdom or Cryptowatch to analyze charts from other Bitcoin trading sites. These charts will help you understand Bitcoin’s price history across the many global Bitcoin exchanges.

Why Does Buying Bitcoin Take So Long?
Long wait times are usually a problem with existing payment systems, not with Bitcoin itself.

Bitcoin transactions only take about 10 minutes to confirm. Bank transfers in the U.S., for example, can take up to five days to complete.

Bitcoin transactions can be confirmed as quickly as 10 minutes; it’s rare to experience a delay longer than one hour.

This means that a merchant can’t release bitcoins to a customer until five days have passed unless they're willing to take on risk.

Can You Sell Bitcoins?
Yes, of course! Most exchanges that let you buy bitcoins also let you sell (for a fee of course).

Why Do I Need to Upload my ID for Some Exchanges?
This is due to Know Your Customer (KYC) laws which require exchanges to record the real world identity of their clients.

Can Anyone Buy Bitcoin?
Bitcoin requires no permission to use or buy.

You will have to check the legality of Bitcoin in your country. In most countries Bitcoin is legal!

Should I Buy Physical Bitcoins?

A physical bitcoin for sale. Source

Physical bitcoins are physical, metal coins with a Bitcoin private key embedded inside.

We recommend that you stay away from physical bitcoins unless you’re a numismatist.

While physical coins sound like a good idea, they force you to trust the honesty of the creator of the coin. The creator could create two copies of the private key.

Unless you immediately open and withdraw the digital bitcoins from your physical bitcoin, the creator could at any time steal the funds it contains.

Can I Buy Partial Bitcoins?
Yes, of course!

Each bitcoin is divisible to the 8th decimal place, meaning each bitcoin can be split into 100,000,000 pieces. Each unit of bitcoin, or 0.00000001 bitcoin, is called a satoshi.

Most exchanges let you buy as little as $5 worth of bitcoins at a time.

Why Should I Buy Bitcoin Instead of Mining?
A long time ago anyone could mine bitcoins on their computer at home. Today, only specialized computer hardware is powerful enough to do this.

Think about it like this:

Should you buy gold or mine gold? Well, to mine gold you need big powerful machines, a lot of time, and money to buy the machinery. This is why most people just purchase gold online or from a broker.

So Bitcoin is no different.

You should just buy some if you want coins without trying to mine.

Do I need a Bitcoin Account Before Buying?
With Bitcoin, there are not really accounts.

Instead, you should have a Bitcoin wallet. If you want to store bitcoins, then a wallet is where you keep them.

In Bitcoin these wallets are not called an account but a wallet functions almost the same way. The only difference is you are responsible for the security if your wallet rather than placing the security in the hands of a bank or trust.

Why Would Someone Even Want to Buy Bitcoins?
There are many reasons people want to own bitcoins.

Many people like to purchase some and put them to the side in the hopes that they will be worth more in the future.

Many people are using bitcoins to remit money to their families from out of the country. Right now, Bitcoin is one of the cheapest ways to do this.

People also use Bitcoin to buy stuff online. Big companies like Microsoft, Dell, Newegg and Overstock all accept bitcoins.

Bitcoin is also very unique compared to other markets in that it trades 24 hours a day and never stops. Most stock markets only open on weekdays from 9 AM to 5 PM. So many traders buy and sell bitcoins because it is a fun and fast market to trade.

Can I Buy Bitcoin Stock?
Bitcoin itself is not a stock despite it functioning somewhat like one. You can’t buy bitcoins through a traditional stock fund and instead have to buy bitcoins yourself. This may change in the future if a Bitcoin ETF ever gets approved.

What Happens When you Purchase Bitcoins?
Bitcoins are actually just secret digital codes. When you buy bitcoins, the seller is using a wallet to transfer the ownership of the coins to you. Once your purchase is complete, the codes are now owned by you and not the seller.

Why Are the Chinese Buying So Much BTC?
It seems the Chinese really like Bitcoin’s properties such as its sound monetary policy and that it can be used anywhere in the world. Bitcoin's volatility also makes it interesting for speculative traders.

Is Bitcoin Legal?
Bitcoin is legal in nearly every country. Only a few countries have actually banned the use of bitcoins. Before you buy, make sure you double-check the legal status of Bitcoin in your country.

Am I Anonymous when I Buy?
Bitcoin is not anonymous but rather pseudonymous. All Bitcoin transactions are public but it is not always known the real identity behind any give Bitcoin address.

Can I use Multiple Exchanges?
If the limits on one exchange are to low you can simply open an account with another exchange to give yourself the ability to buy more.

You can signup, join, and use as many Bitcoin exchanges as you want that are available in your country.

Do I need to Pay Taxes on Bitcoin?
In most countries you will need to pay some kind of tax if you buy bitcoins, sell them, and make a gain. In the US you must do this on every transaction.

Be sure to check with your country’s tax authorities to make sure you are paying all the required taxes on your bitcoin use.

What Other Ways can I Get Bitcoins Besides Buying?
Just like any other form of money, you can get bitcoins by requesting from your employer to be paid in bitcoins.

CHAPTER 5
Avoiding Bitcoin Scams: Don't Lose Money!

There are many scams related to Bitcoin. Scammers target new Bitcoiners and less tech-savvy users. Follow these basic rules in order to avoid Bitcoin scams:

Research
Study your intended exchange and make sure it’s trustworthy. Search forums like Reddit for the experiences of other users.

You can also use our Bitcoin exchange reviews to get in depth information about certain exchanges. If you don’t find your intended exchange listed on this site, extra caution and research is advised as it may be a scam!

Check Ratings
If you’re using a peer-to-peer exchange like LocalBitcoins or Wall of Coins, check the seller’s feedback. If most of their feedback is positive, your trade is more likely to go through without issues. If a seller has lots of negative feedback, it’s best to simply stay away and find a more reliable seller.

Use Escrow
Many scammers will try an approach like this:

“Send me bitcoins, and once I get the bitcoins I’ll pay you on PayPal!”

Don’t ever agree to a trade like this. Bitcoin payments are irreversible, so if you send first the scammer can simply not pay you and keep their bitcoins.

PayPal can't force the scammer to pay either, due to the pseudonymous nature of Bitcoin which doesn’t record the identity of a payment’s sender or recipient. This would leave you with no way to get your bitcoins back.

Stay Away from Bitcoin investments
Any service that claims to pay interest on bitcoins or increase your bitcoins is likely extremely risky or an outright scam. If it sounds too good to be true, stay away.

Be Careful with Altcoins
What are altcoins? Altcoins are cryptocurrencies other than Bitcoin.

Altcoins are traded globally on hundreds of exchanges. Avoid throwing money into coins which are experiencing a sudden and dramatic spike in price and volume. Such moves, especially in insignificant coins with otherwise thin volume and flat price action, are likely to crash fast.

CHAPTER 6
Secure your Coins

Your bitcoins are only safe if you store them in a wallet that is controlled by YOU!

Here are two examples where users got screwed by leaving bitcoins with a third party:

Bitfinex hack where users lost $70 million
Mt Gox where users lost $450 million or more
So, do yourself a favor:

Get yourself a Bitcoin wallet and control your own coins. For large amounts of bitcoins, we recommend hardware wallets. Hardware wallets are small, offline devices that store your bitcoins offline and out of reach from hackers and malware.

Why? It's pretty simple:
Hardware wallets are the easiest way to securely store bitcoins and easy to backup
Less margin for error; setup is easy even for less technical users

Check out the hardware wallet comparison chart below:

BONUS CHAPTER
Bitcoin Exchanges by Country

Here we've posted a bitcoin exchange list for some of the most popular countries.

You can always use our find exchange tool at the top to find exchanges in any country.

Bitcoin Exchange UK
For buying bitcoins in the UK we recommend BitBargain. It works like LocalBitcoins, but unlike LocalBitcoins it's not an international Bitcoin exchange. It just offers service in the UK.

Buy Bitcoins in Saudi Arabia
BitOasis recently expanded to customers in Saudi Arabia and is probably the country's most reliable Bitcoin exchange.

Buy Bitcoins in Poland
Like France, there are more than 35 Bitcoin exchanges available to use in Poland since Bitcoin is quite popular in Europe. You can use our tool at the top to find one that works for you.

Buy Bitcoins in Nepal
LocalBitcoins is probably the best and easiest way to purchase bitcoins in Nepal.