
How to Buy Bitcoin - mmaunder
http://markmaunder.com/2013/11/28/how-to-buy-bitcoin/
======
grey-area
If you're just speculating on the price going up, and don't actually want to
use coins to pay for something, it might be worth having a look at these
charts before you do buy any:

[http://bitcoincharts.com/charts/mtgoxUSD#rg360zigDailyztgSzm...](http://bitcoincharts.com/charts/mtgoxUSD#rg360zigDailyztgSzm1g10zm2g25zp)

[http://bitcoincharts.com/charts/mtgoxUSD#rg730zigDailyztgSzm...](http://bitcoincharts.com/charts/mtgoxUSD#rg730zigDailyztgSzm1g10zm2g25zp)

by the time mainstream publications like the BBC are reporting on spectacular
gains in an asset, it's far too late to invest speculatively in the hope of
finding a greater fool and cashing out before the inevitable crash, even if
you believe in the long-term future of this currency.

~~~
peteretep
Disagree. When I can get a bank account with a UK bank denominated in bitcoin
(at whatever cost), then it's too late to invest speculatively. Until then,
the barriers to entry are exerting downward pressure on the price.

~~~
yaix
The current price hike is made in China. Better to look there for hints as to
when the bubble will burst.

~~~
jackgavigan
+1. In my opinion, the Chinese government has effective control over the price
of bitcoins right now. Obviously they can't dictate the price but, if they
decide to restrict bitcoin trading, the price would plunge.

~~~
kolev
It would plunge temporarily, for sure, but not for long. Plus, why would the
Chinese government do it?!

~~~
jackgavigan
To prevent people from shifting their wealth from CNY into USD.

~~~
kolev
Putting their wealth into Bitcoin isn't putting it into USD - on the contrary.
The Chinese exchanges are all in CNY, dollar isn't mention there at all, which
creates a number of issues like psychological levels being different and
CNY/USD ratio varying on its own.

~~~
jackgavigan
You're missing the point.

China has implemented capital controls to prevent individuals from moving
large amounts of wealth out of China. See
[http://www.globalpost.com/dispatch/news/regions/asia-
pacific...](http://www.globalpost.com/dispatch/news/regions/asia-
pacific/china/120418/money-laundering-bo-xilai-gu-kailai-neil-heywood) for
some background (or just do a Google search for china capital controls).

A Chinese citizen could conceivably bypass those controls by (1) depositing
renminbi (i.e. CNY) into a BitChina account, (2) buying bitcoins, (3)
transfering them to a non-Chinese exchange (e.g. MtGox, BTC-e, BitStamp),
where they (4) sell them for USD.

~~~
kolev
This is true, but both BTCChina and OKCoin have no option, but to start
working with the Chinese government (BTCChina already started) and will
provide control mechanisms, which isn't necessarily a bad news for Bitcoin as
people try to present it. Also, due to major mining operations happening in
China, there's inflow of capital to China, so, I don't think the government
will have a problem with that.

------
philfreo
Coinbase.com is by far the easiest to simply buy or use Bitcoin if you have a
US bank account (and it is a YC company). Unlike MtGox.com (originally the
most popular) the site is fast, stable, well designed, and can connect
directly with your US bank account. They've also got a set of merchant tools
and APIs.

The only downside is that it's not a real time trading platform / you wouldn't
want to do day trading of BTC on it.

This link will give us both $5 in BTC if you buy 1 BTC.

[https://coinbase.com/?r=4fedfb2d6cbd3b0003000845&utm_campaig...](https://coinbase.com/?r=4fedfb2d6cbd3b0003000845&utm_campaign=user-
referral&src=referral-link)

~~~
epaga
In case you are European, I can highly recommend bitcoin.de for hassle-free,
legit buying and selling of Bitcoin. Similar to Coinbase, they're less a day-
trading platform and more a place to buy and sell Bitcoin within a few days.
They have a partnership with a "real" German bank (Fidor) which makes them
highly unlikely to have regulation issues any time soon.

[https://www.bitcoin.de/](https://www.bitcoin.de/)

~~~
antocv
Doesnt work for Sweden.

Too much hassle to be greeted with "your bank doesnt support some
lettercombination"

~~~
melpomene
I wrote a list of Swedish resellers:
[http://blog.kejsarmakten.se/all/personal/2013/09/09/bitcoin-...](http://blog.kejsarmakten.se/all/personal/2013/09/09/bitcoin-
i-sverige.html)

------
kyro
For those who've been involved in this for some time: Do you think it's too
late to get into mining Bitcoin (or other cryptocurrencies) to make any
significant payoff? I've been looking to get into Litecoin and others because
I think I may have missed out on Bitcoin (and buying them at the current value
just isn't feasible), and I'm trying to assess whether this
bubble/trend/fad/craze will extend to other cryptocurrencies and if going in
early now on them will be worth it. I know I'm asking you to look into a
crystal ball, but anyone who's been in this game from early on knows much more
than I do.

~~~
fishtoaster
Mining bitcoin is thoroughly impractical. It would cost you significantly more
in electricity than you would make in bitcoin. The only effective way to do it
is with specialized hardware built specifically for mining bitcoins.

It's not too late to buy bitcoins, though: you don't need to buy a whole one.
For example, if you think bitcoin will double in price over the next month,
you can easily buy 0.1 bitcoins for about $100 and sell it next month for
$200.

One of the benefits of bitcoin is that it's highly divisible- the idea of "1"
bitcoin doesn't really matter for most purposes. If Bitcoin becomes commonly
used as an actual currency, people will almost never deal in whole bitcoins
(any more than they would deal with $10k bills if they existed). You'd buy a
loaf of bread with 0.0001 bitcoins, for example.

So, if you think the trend/fad/craze will continue, you might as well buy
fractions of a bitcoin. I can't speak to the alternate crypto currencies,
though.

~~~
piokoch
The fact that bitcoin is so divisible might be its true weakness in terms of
adoption (given huge value of a single Bitcoin).

Imagine prices in shop given as 0.000132 BTC, 0.000123 BTC, 0.0000132 BTC or
even worst 0.0009999, 0.000999, 0.009999 - looks similar and it is easy to be
mislead and pay for something much more then expected. People would need to
get use to count zeros after decimal point. This hardly matters with any real
currency.

~~~
grey-area
That's really not a big deal. If it was truly popular and highly priced
relative to everyday purchases, we'd just invent names for fractions thereof,
and use those for pricing, as we do in reverse for currencies like dollars or
pounds. They already have satoshis etc.

Far more important limitations:

Built in deflation - that it is seen as a one-way bet with ever-increasing
value and an ever more limited supply would cause problems if used as a
currency (though not obviously as a store of value). The problem for it as a
store of value is that the value is entirely predicated on it being _a
successful currency_.

Volatility - if prices change rapidly, that would make use in retail almost
impossible, and as a store of value dangerous. Many of the places which say
they take Bitcoin right now simply move the money immediately to another
currency to avoid this issue - that's not going to work if it is actually used
as a currency and to store value long-term. Imagine it replacing the USD for
example and remaining volatile...

Time to process transactions - takings minutes to verify a transaction is not
going to work -it'd need to be on the order of seconds, and for a digital
currency it really should be as fast as the network.

Lack of regulation - again retailers/consumers should be nervous if their
financial institutions have no regulations or guarantees that the money they
say they hold actually exists at all. Some exchanges have reported a massive
theft and walked away with no liability, others impose arbitrary limits on
withdrawals etc - this really is wild-west finance and in a crash or bubble
you can expect extreme fraud to go on undetected because there are no
independent auditors, regulations or laws which govern these activities.

Lack of ties to identity - without verified accounts it's far too easy to
commit fraud or theft - very like paper money which everyone is moving away
from.

Lack of reversibility - it doesn't let you roll back transactions, though one
could work around this by keeping a ledger and rolling the ledger positions
back by transferring coins back and forth. If you're going to do that though
and trust the bank/exchange to regulate transactions, why bother with the
cryptocurrency bit at all?

Lack of transparency in the management process - who decides on the rules of
the game here? If the official clients suddenly change rules in concert -
existing bitcoin holders would have to just go along with this if the majority
voted with it - when large amounts of money are involved, this sort of thing
becomes very important. e.g. we hit the existing 21m limit, and those
controlling the software decide to up the limit to 30m - suddenly lots of
assumptions about value would be questioned. I'd be very nervous about the
lack of regulated control.

Lack of backing by a government, corporation or trading bloc - when the market
attacks government currencies, governments are able to expend extreme
resources to mitigate outright panic and collapse. When the market sharks get
interested in Bitcoin and attack it in the same way as they attack say the
Euro, there will be no such backup, just a freely floating rate which is open
to manipulation and depends entirely on public confidence.

I do think it has some interesting properties and is a useful experiment, but
have extreme reservations about this being the actual digital currency which
makes it into use as a global exchange mechanism.

~~~
celticninja
i wont respond to every point but transactions can take between 10 and 60
inutes to verify, however you can accept a 0 confirmation transaction
relatively safely if you were selling a coffee. The resources required to
double spend against a sale of $5 is just not worth it. When it comes to
larger items such as buying a car or a house then waiting 1 hour is not a
problem as the whole process takes longer than an hour anyway so waitng for 6
confirmations is not too much of a burden.

"Lack of transparency in the management process" the official client is open
source, any changes would have to be agreed by the development team but they
would only come into effect if all miners (or at least 51%) agreed to the
change.

It seems your points show you dont really understand what bitcoin is.
Requiring it to be backed by a corportation or a government is exactly the
oppositte of what bitcoin set out to be.

You should read more on it before making suggestions such as these.

~~~
grey-area
_however you can accept a 0 confirmation transaction relatively safely if you
were selling a coffee._

What does relatively safely mean? I'd prefer transactions to be guaranteed and
accounts to have a verifiable amount of funds in them - the currencies/banks
we have now do this in seconds for small transactions.

 _the official client is open source, any changes would have to be agreed by
the development team but they would only come into effect if all miners (or at
least 51%) agreed to the change._

There's definitely space for conflict there. If the official client and/or
lots of the miners decide something, it's going to be hard to get momentum in
another direction, and as a small holder you will have no say at all. Given
the huge vested interest of developers and miners, that seems ripe for abuse.

 _It seems your points show you dont really understand what bitcoin is._

If that's the case, it should be easy to rebut them. That you have replied
with non-rebuttal rebuttals on two points and snide remarks for the rest
doesn't give me much confidence.

~~~
dllthomas
Relatively safely means probably less likely than someone handing you a
counterfeit $5 bill. It's just not worth the expense to try and print it.

~~~
grey-area
What verification would be performed?

~~~
dllthomas
I guess if it's actually zero, it's like a accepting a check with a proof that
the account ever had the requisite funds.

------
pearjuice
Regarding BTC-e and it being a shady site: no matter what they say it is the
only exchange able to really properly trade into other currencies. Quick. I
made a few thousand minute-trading between btc-ltc-ftc-nc et cetera. Got to
love the bubble.

~~~
droidist2
What about Kraken for trading? They support a number of altcoins and a few
fiat currencies (I believe USD, EUR, and KRW). They seem to be a whole lot
less shady than BTC-E.

~~~
rms
Kraken has quite low volume

------
jalev
What about trying to buy Bitcoins from a country that isn't the US? I
shouldn't have to send you the left arm of my first-borne to verify I'm a
human being and then be limited to performing any transaction in dollars.

~~~
jafaku
You can use Virwox, but it's a bit expensive unless you live in Argentina. If
you happen to live in Argentina, you can get the cheapest BTC on the world by
buying with your credit card in Virwox.

~~~
martindale
Why is this?

~~~
umami
There is a ~24% gap between the price you pay in ARS for credit card purchases
in USD and what the USD sells for in the black market. This opens up all sorts
of arbitrage opportunities that the government struggles to plug.

If you have USD in cash, you can sell them for close to 10 ARS and then buy
BTC at about 7.34 exchange rate.

------
scotty79
If you are from Europe you can buy some here:
[https://eur.bitcurex.com/](https://eur.bitcurex.com/)

Polish version of this market was rock solid for last few years (still is):
[https://pln.bitcurex.com/](https://pln.bitcurex.com/)

------
rickyc091
Yep, I find coinbase really easy for buying / selling. Before coinbase,
selling bitcoins was such a hassle...

For buying, I use to just buy through blockchain.info, once you created a
wallet, you could just put an amount you wanted to add in and run down to the
nearest moneygram / western union. The process was fairly painless, took me 20
minutes. You type in the number of bitcoins you want, print out a piece of
paper with instructions. Head down to moneygram or western union, follow the
instructions of hand it to the person there, they do everything for you, you
pay in cash. Refresh your bitcoin wallet and you should see your coins there
shortly.

------
matponta
How is nobody come live with an effortless solution yet? I mean, credit card
and go... ??

~~~
dangero
I think the way you could probably do this is that you could let people buy
using credit cards, but then not actually give them the bitcoins until the
credit card chargeback timeline expired. The risk is obviously that as the
exchange operator you become a bitcoin speculator because you're holding
bitcoins that may not end up being paid for by a customer, so not a good idea
with the volatility we are seeing, but I think that's the only way credit
cards would work.

~~~
RussianCow
Isn't that period something like 60 days for some credit card companies? That
doesn't sound feasible at all.

~~~
dangero
I think it depends on why people are buying the coins. If they are buying them
to hold them, then it does not really matter. I think there are a lot of
people out there who just want to quickly grab some Bitcoins and hold them for
the long term. Often times for those people their biggest concern is getting
in before it goes up any more, so this would be a solution for them.

~~~
RussianCow
But if you're going to be holding onto them for years, an extra couple minutes
to link your bank account to Coinbase shouldn't be a big deal. The difference
in price over the initial two day validation period is going to be negligible
over the course of 5 years.

~~~
kissickas
Coinbase seems to be incompatible with my bank account (a credit union).

------
koenbok
Sometimes it's easy to buy Bitcoins with local payment methods. Here in the
Netherlands you can buy them with ideal and receive them immediately:
[https://bitonic.nl/](https://bitonic.nl/)

------
salient
Any way to buy Bitcoins through a bank in Mexico? I can't find any. I'm
surprised that even though Mexico is so close to US, there's still no
practical way to buy Bitcoins yet (other than person to person).

------
abjr
Any decent guides on how to mine some of the altcoins like ppc, xpm, or qrk?

------
kirchhoff
Your blog breaks the back button with a redirect.

~~~
mmaunder
Thanks. I tried to reproduce this in Chrome and Firefox but it works for me.
I'm not using anything sneaky or that modifies browser history so not sure why
you're seeing this. Which browser are you using?

~~~
kirchhoff
Firefox on Windows with Adblock plus. Works on in Chrome. A below commenter
mentioned ABP so it might be that.

------
derengel
so I have free electricity, can a machine built from commodity hardware for
under $1000 USD be able to make one bitcoin a month?

~~~
3pt14159
Of course not.

