Buy Bitcoin Securely Online
Where To Buy Bitcoins In 2018?
There are a lot of ways to Buy Bitcoins online and not all are safe. We review many options at Bitcoin Millionaire but our current top 3 methods are below:
Buying Bitcoins At Coinbase
Coinbase has a bold claim: the world’s most popular place to buy and sell Bitcoin, Ethereum and Litecoin. BTC, along with these two alts have always been a major part of the cryptocurrency market share and when you consider the statistics of this five-year old company, it’s difficult to challenge that claim.
Coinbase, as of 2018, has exchanged Billions worth of Bitcoin, serving millions of customers across the globe.
It’s easy to see why crypto newcomers would choose Coinbase. It’s relatively simple to use, it has built up a strong banking relationship with financial institutions and has gained a reputable standing among prominent investment firms. That, and its history of being the first exchange to get US regulatory approval, have made it very appealing to the typical first-timer keen to own their very first Bitcoins.
There are currently three cryptocurrencies available for exchange: BTC, ETH and LTC. You can choose to adjust the fiat currency to almost every currency in the world (even the now demonetised Zimbabwean dollar is still listed!).
The pricing is among the most competitive you’ll find and is usually very close to the market average.
Payment And Fees
Not all countries are allowed to perform exchanges here. Currently, Coinbase only supports users from Australia, US, Canada, Singapore and most of Europe, with limited payment methods as well as sell options unavailable to some in that list. You should refer to the list before deciding to open an account there.
Thanks to Coinbase’s significant relationships with financial institutions, supported users can use a wide range of banking options, in addition to credit/debit cards. PayPal is only available to US customers and only for Sell orders.
Most buy/sell transactions will incur a 1% fee plus a separate fee depending on your payment method. This varies from about 3% – 3.75% for credit card and PayPal, while bank transfers ranges from being free to $25. These fee rates are comparatively low when compared with other exchangers.
Things To Note
Despite (or because of) Coinbase being one of the oldest exchangers around, online forums and social media are rife with dissatisfied customers. Perhaps the hostility stems from Coinbase’s seemingly overt attempts at trying to centralise or regulate Bitcoin – a big no-no in the eyes of many Bitcoin advocates.
These attempts are perceived, among others, from Coinbases dogged attempts to verify its users, zealous freezing of accounts based on suspicion of what it considers to be irregular Bitcoin use. It’s a logical outcome from the company’s strong affiliation with institutionalised finance and it being a member of the Blockchain Alliance (which is actively against illegal/unregulated Bitcoin activity).
The PR fiascos of Coinbase founders Brian Armstrong and Fred Ehrsam – first, involving themselves in the block size debates of 2015 and then aggressively pursuing patents on blockchain technology – further damaged their standing in the eyes of many Bitcoin advocates.
Whether or not you find this warrants the animosity Coinbase gets is really up to you.
Coinbase Review Summary
Crypto politics aside, Coinbase makes a rational choice for the newcomer living in supported countries. If you’re not concerned about privacy and don’t mind supplying the same documentation as you would to a bank, and don’t need to hide what you’re going to do with your Bitcoin, then you’ll like Coinbase’s low fees and quick settlement.
Buying Bitcoins On LocalBitcoins
A directory of local buyers and sellers of Bitcoins. Lists the Bitcoin traders closest to your current location.
Local Bitcoins Overview
Local Bitcoins is the world’s most used peer-to-peer Bitcoin exchange. What it really is is just a marketplace where individuals buy and sell Bitcoins to and from each other with fiat. Sellers and buyers can set their own prices and are mostly free to set their own rules for exchanging, with the Local Bitcoins site merely providing a platform to complete the exchange.
The site claims to have exchangers available from 248 countries and 14,440 cities, which is quite a boast, seeing as that the UN recognizes 195 countries and some 43 dependencies, so it’s possible unrecognized countries are also counted. Hooray for border-less Bitcoin, right?
There is only one crypto commodity to buy or sell here: Bitcoin. Because users expect to be exchanging with people close to them or from their country, naturally, exchanges are completed in the respective fiat currencies of the country they’re in (although larger exchangers often make other fiat options available) – hence the emphasis on local.
Payment and fees
The buy and sell rates for Bitcoin are probably among the best (if not the best) that you can find anywhere online, which is to be expected from a P2P exchange where users set their own rates. Clicking on Buy or Sell will list the options, with the best prices shown at the top. We found that this will typically result in at least 2 – 3 % more value if compared to other non-P2P exchanges.
Local Bitcoins itself does charge a modest 1% fee on all trades, which the seller pays but even that is extremely competitive. It also earns from advertisements that users can create to promote their prices and payment methods.
There are two types of transactions: online trades and local trades. The online trade is the most secure, as Local Bitcoins provides an escrow service, whereby the seller can release the Bitcoins sold only after receiving buyer funds. In event that the seller doesn’t do this, Local Bitcoins can release the escrow to the buyer. This ensures both parties cannot scam each other.
Local trades just means you agree to meet in person and do the exchange!
Things to note
The thing you should remember with P2P is that you’re dealing with another person. While this platform gets you the best prices around and can settle a trade quickly (direct local bank deposits are almost instant, for example), if you’re not careful and don’t do your own due diligence, you expose yourself to fraud.
In general, when setting up a trade, look for a trader with good reputation scores, good feedback, large volume of trades. The older the account, the better. The more people Trust the trader, the better. Don’t forget to leave your own trust and feedback after completing each trade.
Some countries, like the US, also require AML/KYC, so US buyers will usually ask for verification from sellers. Most other countries are quite relaxed on this rule, so you can easily exchange Bitcoin for fiat in no time at all with the security of escrow.
The site’s inbuilt verification is simple and automated. You will find that most traders will only deal with verified users so you should do this. The phone verification takes 5 seconds, and the automated ID verification took about a minute.
Local Bitcoins is simple, quick and fuss-free, in our experience. It took us just about 5 minutes to sign up a new account and get it verified and verification. Minus confirmation time (your deposit will need 3 confirmations before it can be sold), the trader we chose took only 30 minutes to pay us fiat, upon which we released the escrow.
Of course, exercise caution – a simple Google will find a lot of people scammed on Local Bitcoins, usually after responding to ads at great prices or not following trader instructions. Customer Support ranges from effective to frustrating, but are normally good at resolving disputes.
So for the best bang for buck and quick transaction times, Local Bitcoins is a winner for us.
Buying Bitcoins At CEX
CEX.IO is one a site that you can buy and sell Bitcoins with mostly using credit cards.
CEX.IO started out in 2013 as the very first cloud mining company, offering contracts to the public that allowed people to “mine” Bitcoin. Their significant share of hashing power (42% at its peak) netted them some fame back in 2014 but CEX.IO would cease its mining operations in 2015.
Since then, it’s been registered with FinCEN and opened its doors to trading cryptocurrency and as of late 2016 offered margin trading in addition to main services as a cryptocurrency exchanger.
Currently, users can hold wallets in four fiat currencies (GBP, RUB, USD and EUR) as well as two cryptos (BTC and ETH). They have had several other currencies in the past, removing the Litecoin wallet most recently, so you can expect this to evolve over time.
You can buy BTC or ETH but at a premium… about 10% higher than standard market rates, at least from what we could tell at time of writing so that’s a big downside.
The margin trading options at CEX.IO allow you to trade in the following 8 pairs: BTC/USD, BTC/EUR, BTC/GBP, BTC/RUB, ETH/BTC, ETH/USD, ETH/EUR and GHS/BTC. You can also use leveraged trading at 1:2 or 1:3.
Our brief experience is that the buy/sell rates are competitive enough, but the trading page seems to freeze occasionally and lags with each click – something you’ll want to consider if you’re not running a high-end machine.
Payment and fees
You can deposit funds via credit card (Visa and Mastercard) for a 3.5% commission and $0.25 fee (5.25% + 15.57 RUB if you use RUB). This is the quickest method, and is often the reason people buy Bitcoin from CEX.IO. You can get the payment verified within an hour, provided your credit card has 3-D Secure or it won’t work.
If you’re willing to wait up to 5 business days, you can opt for a flat fee of USD/EUR 10.00 for bank transfers, although it’s free for RUB deposits.
If you want to sell your crypto, you can do so to your card for a 2.9% commission plus USD/EUR 4.99 or RUB 499 fee. Bank transfers are free of cost.
For trading, the fee schedule link on their own website gives a 404 error, but from what we can tell, there is at least a 0.2% “Takers” fee charged on each trade you enter, which is reduced as you accumulate a 30-day trading volume.
Things to note
Be forewarned, however! Verification processes is very rigid at CEX.IO due to their Know Your Client (KYC) and Anti Money Laundering (AML) commitments. While this is perfectly acceptable, we feel that customers should be forced to complete these processes BEFORE being allowed to make any deposits. As it is, you’ll only be asked for verification AFTER your payment is successful.
There’s a detailed guide on how to get yourself verified but in short, you’ll need to send them a high-resolution photograph of yourself holding your credit card, with your face and card details clearly visible. Then you’ll also need to provide them a picture of your passport or national ID.
Not many people will be comfortable with sharing this information, particularly as CEX.IO does not reveal exactly with whom they are sharing your information. That’s the price of being able to use your credit card!
Also, you won’t be able to withdraw your BTC until your account is over 48 hours. At time of writing, a lot of users are also complaining, providing proof that that they are not able to withdraw their fiat balances and are asked instead to buy BTC and withdraw that. Others are asked to wait for 20 business days for bank withdrawals, without any proof of transaction. We call that unethical.
With cross-platform trading via its website, mobile app. WebSocket and REST API on the top currency pairs in the market, CEX.IO continues to present itself as one of the heavyweights in the exchange and trading business.
The issues with their security measures, such as the difficulty to set-up 2FA.
But if recent feedback from disgruntled new and old customers are to be considered, you may have to be prepared for very long waits or unethical practices.