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 funds and making sure you only transact over secure connections and with trusted vendors.

Before you can buy bitcoin you may have to set up 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. Refer to our Bitcoin wallets 101 post for a deep dive into bitcoin wallets.

There are three main ways to buy bitcoin. The best option for you will depend on your location and access to the internet, but all are secure and easy to use:

  1. Bitcoin exchange
  2. Peer-to-peer exchange
  3. Bitcoin ATM

Bitcoin Exchange

Buying bitcoin directly via a debit card will be the best option for most users. Trading cash for bitcoin is fairly straight forward and numerous firms provide the service, some even without the need to have a wallet beforehand. Gemini, Kraken, and Binance are all reputable cryptocurrency exchanges that allow you to buy bitcoin with a debit card or bank account. 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 USD to bitcoin purchasing without a fee via your debit card or balance within the app. You can also buy bitcoin with Cash App on a daily, weekly, or monthly basis ($10 minimum). Square, the company that owns Cash App, is the first publicly traded bitcoin merchant and has been bitcoin-only since day one. Square and Cash App is US-only for now.

Unfortunately, purchasing firms usually have a daily limit of $10,000 per day if the form of payment is a debit card or bank account.

Pros:

  • Convenient
  • Don’t always need a wallet to start
  • Possible to buy on a recurring basis
  • Can buy exactly the amount you want

Cons:

  • Potential for high fees
  • Needs internet connection
  • $10,000 daily maximum

Peer-to-peer (P2P) Exchanges

Peer-to-peer (P2P) exchanges are marketplaces where people can trade bitcoin with each other directly and discreetly. Peer-to-peer exchanges match people who want to buy bitcoin with those who are willing to sell their own personal bitcoin.

Since you are buying bitcoin from an individual, sometimes the amount of bitcoin that you want to buy is not being sold on the market. This means that you might have to buy a different amount of bitcoin than you were hoping for or wait until the amount you want to buy becomes available on the market. P2P exchanges also price bitcoin at seller-specified prices, not the market rate. This means that you may pay more - or sometimes less - than the spot bitcoin rate of any given bitcoin exchange.

One of the main benefits to use a P2P exchange is increased privacy. Since the transaction is going between two individual peers, it is possible to buy bitcoin on a P2P exchange without submitting KYC or other personal information. It is even possible to pay with cash or foreign currencies, so long as the bitcoin seller is willing to accept it.

LocalBitcoins.com is a great P2P exchange. Their service is available in 248 countries and they keep their prices low by focusing on facilitating Bitcoin exchanges between local peers. It's even possible to buy bitcoin in person, should buyer and seller want to take the bitcoin transaction offline. LocalBitcoins accepts a wide variety of payment methods, including cash. Like Cash App, LocalBitcoins.com is bitcoin-only which is a business plan that we stand behind.

Note: You will need to have a bitcoin wallet set up before you exchange to use a P2P exchange.

Pros:

  • Multiple payment methods, including cash
  • Increased privacy
  • Low exchange fees

Cons

  • Can't always buy the exact amount you want
  • Non-market rate bitcoin prices
  • Need a bitcoin wallet to start
  • Needs an internet connection

Bitcoin ATMs

Lamassu’s ATM

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 bitcoins 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 smartphone or computer, buying bitcoin through a direct debit card purchase or exchange is preferable to bitcoin ATMs.

Pros

  • Can buy bitcoin without an internet connection
  • Can use cash

Cons:

  • High fees
  • Not market rate

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.

Did this answer your question?