There are many avenues that you can take to purchase bitcoin. Each option has its own merits and deciding which method of purchasing is completely up to you. The power of bitcoin is that you hold the keys to your financial future and act as your own bank. With this power comes the responsibility of securing your own funds and making sure you only transact over secure connections and with trusted vendors.
Before you can buy bitcoin you must establish a bitcoin wallet. For now, think of a bitcoin wallet as a brokerage account. In the same way that this brokerage account is how you access the stock market to buy, sell, and hold stocks and bonds, your bitcoin wallet is how you buy, sell and hold bitcoin. The two main types of bitcoin wallets are “cold storage”(physical) wallets and “hot” (physical & digital) wallets. The main difference between the two wallet types is that a digital wallet stores your private keys on an internet connected device while a physical wallet does not. It might be a good idea to set up both a cold and hot wallet, one for spending and one for holding larger amounts, but that decision is up to you. Refer to our Bitcoin wallets 101 post for a deep dive into bitcoin wallets.
Now that you’ve selected a bitcoin wallet, it’s time to buy! There are three main options for buying bitcoin. The best option for you will depend on your location and access to the internet, but all are secure and easy to use:
- Direct credit card/debit purchases
- Bitcoin ATM
- Bitcoin exchange
Direct debit card purchases
Buying bitcoin directly via debit card will be the best option for most users. Trading cash for bitcoin is fairly straight forward and there are numerous firms that provide the service, some even without a wallet. Robinhood, Gemini, and Binance are all online services that allow bitcoin payments for various cryptocurrencies including bitcoin. While all these services provide secure transactions and will allow you to buy bitcoin, they do so at a fee (differs between operators) and they do not share the same vision of a bitcoin-only future as we do at OpenNode. If you are in the United States, we strongly recommend buying bitcoin with Cash App by Square. Cash App has an easy on-boarding process and allows dollar to bitcoin purchasing without a fee via your debit card or balance within the app. Square is the first publicly traded bitcoin merchant and has been bitcoin-only since day one. Square and Cash App is US only for now. For our users in other countries we recommend using LocalBitcoins.com. While LocalBitcoins.com charges a small fee, it is available in 248 countries and keeps its prices low by focusing on buying bitcoins from local traders. Like Cash App, LocalBitcoins.com is bitcoin-only which is a business plan that we stand behind.
Additionally, you can also use peer-2-peer exchanges that require no KYC and store no user data unlike the previously mentioned exchanges. Bisq and Hodl Hodl are two decentralized exchanges that are also great options to buy bitcoin with a linked bank account.
Unfortunately for those looking to buy large sums of bitcoin, Direct debit card purchasing firms usually have a daily limit of $10,000 per day. If you’re looking to buy large quantities of bitcoin, skip ahead to the exchanges section.
- Enter the market without owning cryptocurrencies
- Don’t always need a wallet to start
- Potential for high fees
- Needs internet connection
- $10,000 daily maximum
Bitcoin ATMs provide a physical place to buy bitcoin at machines located all over the world. There are two main types of these bitcoin machines: kiosks and ATMs. Both are connected to the internet, allowing for cash or debit card payment in exchange for bitcoin given as a paper receipt or by transferring money to an address that you provide. Kiosks serve as an access point to a bitcoin exchange only. Bitcoin ATMs are more like traditional ATMs and allow transfers or withdrawals between bitcoin and bank accounts while also supporting direct bitcoin purchases via an exchange.
Bitcoin ATMs are a great way to purchase bitcoin for those who do not have access to the internet but should be used with caution. They have been known to charge steep transaction fees, as high as 7% per transaction, and they price bitcoin at higher-than-market rates. Assuming you have access to a smart phone or computer, buying bitcoin through a direct debit card purchase or exchange is preferable to bitcoin ATMs.
- Can buy bitcoin without an internet connection
- Can enter the market without owning cryptocurrencies
- High fees
- Not market rate
Exchanges are institutions that allow users to trade cryptocurrencies in an open market. These markets are not a viable entrance into the cryptocurrency market since they do not accept traditional currency or debit card transfers. That said, if you hold alternative cryptocurrencies exchanges are are an excellent way to buy bitcoin.
Kraken, Gemini, and Binance are reputable exchanges and are also considered to be one of the best places to buy bitcoin if you are looking to purchase with cryptocurrencies.
Unlike direct debit card purchases, exchanges don’t set a limit set on how much bitcoin you can buy. As long as you hold the equivalent value in cryptocurrency your bitcoin purchases will not be capped.
- Lowest fees
- Ability to trade cryptocurrencies
- No limit
- Cannot use cash traditional currencies for payment
- Needs internet connection
Our mission at OpenNode is to create a simple bitcoin payments platform that helps bridge the gap between bitcoin and the rest of the world. You’ve seen the statistics. You’ve seen how fast the lightning network is growing, how bitcoin is evolving, and you want to get involved. Yet, Bitcoin is a new technology and finding a secure and easy location for which to buy bitcoin is not exactly common knowledge. Lucky for you there are numerous secure ways to buy bitcoin to suit your needs.