You may have heard that getting bitcoin is difficult because a PC must mine them first. Such statements are no longer true.
In 2017 it is now possible to purchase bitcoin directly. From credit cards to bank transfers, from cash to PayPal – there is no shortage of payment methods for buying. Each method will have its associated inconveniences and strengths.
Speed to deposit, commissions, ease-of-use, degree of anonymity, fungibility, proximity, and security – are all important factors when choosing a deposit method.
Here is a summary table of the advantages/disadvantages for each payment method:
|Credit Card||High||Bad||Very fast||Easy|
|Bank Transfer||Very low||Bad||Slow||Easy/Medium|
|Work for it||No fees||Good||Slow||Hard|
You can also find out which of these top bitcoin exchanges facilitate deposits with your preferred payment method. In the next section I’ll examine each type of payment method. You should get a good idea which one will suit best for your purchase.
Bank Transfer vs Credit Card
For buying large amounts of bitcoin, you should choose to buy with a bank transfer on a reputable exchange. Fees are always lowest when you choose to transfer funds directly via SEPA (Europe) or Wire (US). Alternatively credit card purchases will provide you with bitcoins in a much faster time span. This is because deposits are verified instantly so the exchange can immediately release the cryptocurrency to you. The downside is that credit card transactions entail larger fees, which make it inconvenient for getting many bitcoins.
PayPal vs Credit Card
What makes people want to transfer PayPal to bitcoin and vice versa? The simple fact that PayPal is instant, ubiquitous, and quite convenient (Many people use it as their favorite payment processor). Using PayPal is great for small amounts, but it’s far cheaper to use other payment methods (credit card, bank transfer) for larger transactions. Credit card purchases are the simplest way. Fees are high, but generally not as high as when buying with PayPal. Be aware that not many PayPal to bitcoin exchanges exist and therefore some places may take advantage of this. Be sure to read the differences between a good and a bad crypto trading site before commiting your funds.
Use the following diagram to compare PayPal vs Credit Card for buying BTC:
Cash (in-person) vs Buying Online
There are two accepted ways to buy bitcoin with cash:
- Using a Bitcoin ATM – you put cash in, it sends bitcoins to your specified address
- Meeting a person and swapping your cash for their bitcoins
Generally speaking, buying bitcoins with cash will guarantee the highest levels of anonymity. Fees are higher than buying by bank transfer, but at least you will keep your ID secret and no one has to know who you are. Some people choose cash because they want to buy bitcoin with no ID, but for large transactions this become quite inconvenient, risky, and even physically dangerous. Another downside is that you usually have to go to physical location to meet someone, rather than just being able to do it all online. Please note that not all bitcoin ATMs are anonymous. Some do require ID submission.
Working for Bitcoin vs Buying it
Did you know that it is actually possible to work for bitcoin? It’s really starting to kick-off within the freelancing community. If you’re a graphic designer, web developer, artist, producer, or anything else that can be done remotely – then I highly recommend looking into working for bitcoin. There are no exchange fees, since your employer simply sends you his bitcoins directly to your address. Granted, this is not the fastest method, but you sure would be riding the first wave of trend-setting digital freelancers. I like to look for freelancing gigs on the xbtfreelancer site or the /r/Jobs4Bitcoins sub-Reddit.