So you want to buy some Bitcoin? Well after more than 8 years since Bitcoin was invented, it’s still very difficult to get your hands on Bitcoin. The most common way in the US is to link your bank account to an account on Coinbase, but that requires you to go through the hassles of uploading your private information so the government can track your every step. If government’s prying eyes are not a problem, it will still take up to 3-5 days for your Bitcoin to arrive because... well using banks to move money in the modern world is very slow. Isn’t that the problem Bitcoin is supposed to solve? Perhaps one day when we’re all using Bitcoin and new digital money waiting 3-5 days will be a thing of the past.
One of the more anonymous and fastest ways to get Bitcoin is using cash. You can meet with someone in your neighborhood or city using LocalBitcoins.com, but unless you live in a major metropolitan it will probably be a long drive. It can be fun meeting new people who are into Bitcoin, but if you feel awkward meeting with strangers or are worried of being jumped there are some other options. There are Bitcoin ATMs you might find, but there are very few around. You can even send cash by mail! However there is an even better way.
Buy Bitcoin with Cash By Depositing at Local Bank Branches
All the methods we discussed so far are adequate, but the quickest, most efficient, most cost-effective way to get bitcoin with cash is to deposit cash at a seller’s bank account at a local branch office. You’ve probably deposited cash and checks to your own accounts before, but you can actually deposit cash to anyone else’s account as well. Banks aren’t concerned whether you own the bank account you are depositing to. You can use any bank branch of the bank the seller uses. Therefore you can send money to anyone in the US using your local branch. You can effectively do the same at a credit union that’s likely part of a co-op of credit unions. Remember one of the disadvantages with buying Bitcoin with cash is that Bitcoin prices are usually higher. There’s a premium for speed and anonymity. So how do we start?
Step 1: Sign Up to LocalBitcoins.com to Buy Bitcoins!
In order to find people selling Bitcoin for cash bank deposits, we can search LocalBitcoins. LocalBitcoins has been around since 2012 and is well known for in-person trades, but more trading volume has shifted to cash deposits over the years. LocalBitcoins is in 249 countries and has $9 million in weekly volume in the US.
When you get to the website, click on the green ‘Sign up free’ button and create a login & password. You will automatically get a Bitcoin wallet to send and receive bitcoins after signing up. Also remember to eventually set up Two Factor Authentication especially if you start to use LocalBitcoins actively.
Step 2: Find the Best Cash Deposit Offers for Bitcoin
Sign up to LocalBitcoins.com, go to Quick Buy on the top menu, select Cash Deposit on the dropdown menu and click on the Search button. Search for the lowest prices, but in general it’s better to find someone who has at least 100+ trades and a good rating especially if you’re new. Sometimes sellers will require ID or verification that can easily be done through the website, but many don’t require it.
Since the highlighted listing has a lower limit of 25 dollars, I’ll choose that. The seller is rated at 99% and has done over 100+ transactions so that should be fine. You can click on the seller username link to find statistics on past trades and make sure each statistic makes you comfortable. This seller also didn’t require any identification. Most of the statistics the website provides are good indicators of someone’s reliability:
Try to avoid users with too many blocks because that indicates that people may have had bad experiences. You can also review all the feedback comments on the bottom half of the page to gain more comfort. Feedback comments will generally look like this:
Ideally you want to deal with someone with thousands of transactions with a ProTrader badge, but prices will be higher if you do. ProTraders are experienced traders who’ve demonstrated reliability in trades and have done enough trade volume to be recognized by the platform. If you are new it’s better to pay higher prices and deal with ProTraders. The badge would show right below the highlighted section like shown below with a star icon:
Step 3: Determine How Much Bitcoin to Buy
As you can see here the lower limit to buy was $25 and the upper limit was $49 for this seller so I entered the lowest amount in the form and at the Seller’s rate I would get .0233 Bitcoin. Remember to read the instructions carefully. Most sellers will require you to write ‘No Refund’ on your receipt and take a photo of it as proof you deposited the cash. Once you confirm to buy the amount, the bitcoin will be held in an escrow for typically 4.5 hours. The final instructions will be displayed that shows the Seller’s name and bank account number. Make sure you double check that you have the correct name and bank account number!
Step 4: Drive to the Bank to Deposit Cash
The next step is to drive to the local bank branch and go to the bank teller to deposit the cash. In this particular case it was a Wells Fargo. I gave the teller a piece of paper with the seller’s name and the bank account number along with $25 in cash. The teller wrote the information down on a deposit slip, deposited the cash and gave me a receipt. That’s it!
Step 5: Take Photo of Receipt of Cash Deposit and Receive Bitcoin
It is standard practice to write ‘No Refunds’ on the receipt and take a photo to send to the seller. The seller should be able to check his bank balance online, but also needs to know it was you who deposited the cash. When you get back to your place, upload the receipt photo by clicking ‘Attach document’ on the instruction screen. Then click the blue ‘Mark payment complete’ button:
You’re done. Congratulations and just wait for the seller to release the escrow on your bitcoin! Once the seller sends your bitcoin you should see them arrive in your wallet. The amount of bitcoin should show up next the bitcoin symbol at the top menu and if you click that tab you should see the transaction history screen like below:
So that was a step-by-step guide on one of the best ways to buy bitcoin with cash. So when you’re looking for better ways to buy bitcoin, definitely try out this method. It’s:
- Convenient because you can normally find a local branch of major banks close by and don’t have to schedule a specific time to meet someone
- Quick because once the seller checks online for a notification of the deposit and can verify you’re the one that did with a photo of a receipt, he/she can send over the Bitcoin.
- Secure because there is an escrow service on LocalBitcoins so you are assured the Bitcoin is waiting for you after your deposit.
- Safe because you don’t have to meet with strangers
Localbitcoins is a great place to start, but there are other websites like Bitquick.co that use the same process. Also if you are trading with a person you trust, this method is a great option to use. You can subscribe to my mailing list for more guides like this by clicking >> HERE <<