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Payment methods for buying Bitcoin

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Bitcoin is the latest fad in investment, and those who are not already in possession of coins are frantically seeking for ways to do so. Its acquisition is no longer restricted to the laborious mining process, but trading options have made an appearance in droves.

Buying Bitcoins is fairly easy as you are only required to have fiat money and make an exchange as you would in a normal forex exchange. The difference comes in that Bitcoins are not physical, and therefore their storage and transactional nature is also not physical.

A digital platform, known as a wallet, is created to accommodate and facilitate the buying, receiving and sending of Bitcoins. Payment methods are available in abundance, and one has to weigh the pros and cons of each before selecting one particular method.

Common purchase methods

We shall explore some of the most commonly used methods. These can be used by both individuals and companies or institutions to perform a purchase function. They are:-

Bank Account

Purchasing Bitcoins through a bank account requires one to connect to the online Coinbase Exchange.

  1. Complete the laid down verification processes.
  2. Proceed to ‘buy/sell’ page.
  • Enter the amount of Bitcoins you want to purchase and select your wallet.
  1. Click on the ‘bank account’ payment method.
  2. Click on ‘buy Bitcoins instantly,’ and your Bitcoins will be transferred to your wallet instantly.
  • Transfer to a hardware wallet if you possess one.

Cash

Just like in over-the-counter purchases, Bitcoins can also be bought with liquid cash. You will first have to register with either Coinbase or LocalBitcoins which are some of the operating platforms available for this.

  1. Click on ‘Buy Bitcoins.’
  2. State the amount of cash you want to spend to make the purchase.
  • State your currency and country
  1. Using the drop-down box that appears, search for ‘In-Person – Cash’ and click on it.
  2. Available sellers within your stated location will appear on the screen. Select one whose meeting options are convenient to you.
  3. Write up a short request of your intention to buy Bitcoins from them in person and for cash.
  • On the seller’s acceptance of your request, mutually arrange a meeting.
  • Click on ‘Mark payment as complete’ which will be seconded by the seller’s confirmation once he receives the payment.
  1. The basics are complete. All that remains is for the physical exchange of your money to the seller.

Bitcoin ATM

This is also referred to as buying “on the go.” Bitcoin ATM’s have more than doubled over the last few years as Bitcoin became mainstream. To buy through an ATM is quite easy. Here are a few quick steps:-

  1. From the Bitcoin’s ATM touchscreen, select the option to buy Bitcoins.
  2. Provide your Bitcoin address by inserting your paper wallet or QR code on your smartphone.
  • Insert your fiat money into the slot provided.
  1. Confirm the transaction by pressing the confirm button on the touchscreen.
  2. Your Bitcoins have been sent to your wallet by the ATM.

Credit card/Debit card

Buying Bitcoins through electronic cash has never been easier with the introduction of exchange platforms like Coinbase and Kraken. Like in all other cases, having a digital wallet is a pre-requisite. To purchase with a credit/debit card:-

  1. Decide on the platform to use and create an account on it. Let us assume you have opted for Coinbase.
  2. Fill in the personal details as required. Some identification might have to be uploaded just for verification purposes like your passport or driving license.
  • Navigate to find ‘Add payment method.’
  1. Link your credit/debit card.
  2. State the amount you want to spend.
  3. Bitcoins will be transferred to your Coinbase wallet.
  • Credit cards attract a fee while debit cards are completely free to use.
  • The transaction is complete.

PayPal

This is not the easiest of the payment options but nonetheless possible by going around it. The chief reason why it is difficult is that PayPal transactions are reversible while Bitcoin transactions are not. Since you cannot purchase Bitcoins directly through PayPal, you will have to use a Second Life Linden (SLL) to be able to make your buy. There is selection to choose from the likes of Paxful, Wirex, LocalBitcoins, and Virwox. We shall use Virwox for illustration. Follow these steps to effect a PayPal/Virwox purchase:-

  1. Open an account with Virwox
  2. Fill in the query boxes with the appropriate information.
  • Using the email address, confirm your account.
  1. Deposit your designated amount for the transaction through PayPal to your Virwox account.
  2. An option to exchange the balance is presented. Select it.
  3. Another option to convert the balance to Bitcoins will appear. Select it.
  • A 10% fee will be deducted that is due to PayPal.
  • The transaction is complete.
  1. Transfer the new Bitcoins to your wallet. This transfer is effected within a day or two.

Buy Bitcoins instantly

An interesting service found only in the United States is LibertyX which allows users actually to purchase Bitcoins almost instantly. Users are required to sign up for a LibertyX account on their website or through a mobile application. The account allows for a purchase of up to $1000 worth of Bitcoins daily, and users can pay cash to the cashier, and the transaction takes just a few minutes to conclude.

Another instant service is peer-to-peer. This is a platform whereby buyers are connected to sellers without including the middlemen. Purchase methods include cash, PayPal, and PaySafe Card among others.

The above list is not exhaustive, and there are many other ways that Bitcoins can be purchased.

In conclusion, the invasion of Bitcoins has impounded upon us all causing people to make various considerations of acquiring some. The motivation could be out of plain curiosity or simply for fear of being left out. Whatever the reason, Bitcoin seems to be here with us to stay. The good news is that there is no shortage of payment methods in order to make a purchase. With a few considerations as to the fees chargeable, the ease of use of a payment method and the speed at which transactions are processed, the user is spoilt for choice.

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