How to buy your first Bitcoins in the UK
The price of Bitcoin has been soaring over the past couple of years, and even though Bitcoin is known for its volatility, the overall trend is up. If you bought some Bitcoin 5 years ago as an investment, you would have probably become a very wealthy person now.
“The best time to buy bitcoin was 5 years ago. The second best time is today.”An ancient Chinese Proverb
Whilst it used to be difficult to buy Bitcoin and other Cryptocurrencies, Many Bitcoins services have popped up across the UK, making it very easy for the masses to start adopting Bitcoin as a legitimate payment tool.
Read this before buying your first Bitcoin
Before you invest any of your hard-earned cash in Bitcoin, you need to understand how Bitcoin works. We recommend that you read up and learn more about Bitcoin before buying.
Unlike traditional currency, Bitcoin prices are unpredictable. Prices go up or down tremendously within a short time span because the economy is still at its infancy. Like any other form of investments, only put in what you can afford to lose.
Bitcoin transactions are also not reversible. Unlike payment services like credit cards and Paypal, transactions cannot be cancelled or recalled once it has gone through. Always pay attention to the amount of BTC you are sending, so that you do not send any Bitcoin by mistake.
Once you understand these important points, you need to choose a wallet to store your Bitcoin. A wallet is essentially a piece of software program that can store your Bitcoins, much like how a real wallet stores your cash. Protect and secure your wallet so that your Bitcoin does not get lost or stolen.
How to pay for my Bitcoins
Today, many methods of payment are widely accepted for buying Bitcoin. You can make a UK bank transfer, use a UK debit card or even use cash money. However, certain digital payment platforms such as Paypal are still not accepted by most Bitcoin sellers.
Buying from Bitcoin ATMs
Bitcoin ATMs have popped up across the UK over the recent years. There are currently 92 Bitcoin ATMs in the United Kingdom at this time. You only need to walk up to the ATM and buy your Bitcoin using your cash.
Buying from Bitcoin exchanges
Exchanges work similarly to your standard currency exchanges. They buy and sell Bitcoin (and other types of cryptocurrency).
In order to start buying Bitcoin from exchanges, you need to open an account and submit documentation (such as your photo ID or passport) as part of their KYC (know-your-customer) process. Once your account is approved, you need to send money into your account, which is usually via a bank transfer.
Here are some of the Bitcoin Exchanges that are supported in the UK:
- Bitstamp (accepts SEPA bank transfers in the EU)
- Coinbase (a popular exchange that accepts 3D secure-enabled credit and debit cards from UK customers)
One thing to note is different exchanges have different fee structures when accepting deposits or transfers. Fees are adjusted regularly so be sure to go through them thoroughly before sending any money to the exchange.
Buying from peer-to-peer (P2P) marketplaces
Bitcoin P2P marketplaces are simply platforms that buyers and sellers can post their buy or sell requests. They help to match buyers to sellers of Bitcoin without any middleman.
This means there are no transaction fees involved. Also, unlike exchanges P2P marketplaces do not hold on to any Bitcoin, nor do they carry out any trading.
Hence most of these marketplaces allow a variety of payment methods as there is no third party involved in the transactions – including Cash, which is deal if you don’t want to go through any KYC processes.
The most popular and trusted P2P market place in the UK is LocalBitcoins. I have personally used this to buy Bitcoin both via FasterPayments (CHAPS) Bank transfers and via cash
Other unconventional methods of buying Bitcoin
You can seek out like-minded people in the UK interested in buying or selling Bitcoin. For example use Meetup to find Bitcoin interest groups near you, then attend a group outing and buy your Bitcoin from its members. It is a good way to make friends and have fun discussions about cryptocurrencies.
Other online communities include Reddit or the BitcoinTalk forum
How to find the best rates for Bitcoin in the UK
A useful tool to compare prices is Bittybot. It compares the prices from different sellers and updates every five minutes with the latest pricing. Bittybot also provides user rating and reviews on the sellers, and the accepted payment methods
It’s not 2011 anymore, bitcoin isn’t hard to buy, and many merchants are also starting to accept Bitcoin as a payment method.
Even if you don’t wish to spend your Bitcoin, it is a good form of investment as the price will likely go higher in the future. So go forth and buy some Bitcoin today, and have fun!