Best Ways to Buy Bitcoin in 2020 Explained

WikiCoin
Thu, 07/23/2020 - 11:27
Vladislav Sopov
Massive adoption of Bitcoin is gaining steam, so the moment has come today to figure out which Bitcoin (BTC) purchasing method suits you best
Best Ways to Buy Bitcoin in 2020 Explained
Cover image via U.Today

Disclaimer: The opinion expressed here is not investment advice – it is provided for informational purposes only. It does not necessarily reflect the opinion of U.Today. Every investment and all trading involves risk, so you should always perform your own research prior to making decisions. We do not recommend investing money you cannot afford to lose.

Contents

The year 2020 is a crucial one for Bitcoin (BTC) and cryptocurrencies. Thus, owning a piece of the flagship crypto could be an inspiring and profitable experience.

Best Ways to Buy Bitcoin (BTC)

There are numerous ways to transfer fiat money. Almost all of these instruments can be used to buy ETH reaches yearly high, as Ethereum options volume and open interest reach a new record high Bitcoins (BTC) in 2020.

Here are the best ways to buy Bitcoin (BTC) in 2020:

  1. Buy Bitcoin (BTC) on exchange

Buy Bitcoin (BTC) with debit card

Directly buying Bitcoin (BTC) with a debit card remains one of the most intuitive ways to buy.

Typically, this operation is completed through a crypto-to-fiat paygate--a website that allows you to exchange fiat money from a debit card for Bitcoin (BTC).

Buy Bitcoin (BTC) with credit card

The process of buying Bitcoin (BTC) with a credit card is similar to doing so with a debit card, but it may have some restrictions. Some services work with debit cards only.

The user needs to sign up for the service, input card data, input the address of his/her Bitcoin (BTC) wallet and specify the details of the transaction.

Buy Bitcoin (BTC) with PayPal

PayPal is one of the most popular money transfer instruments worldwide. Some services allow users to buy Bitcoin (BTC) with a PayPal account.

Such purchases are conducted through peer-to-peer services like Paxful or LocalBitcoins. You authorize your PayPal account, choose the peer from whom you want to buy Bitcoin (BTC) and the service sends PayPal money to your counterparty.

Buy Bitcoin (BTC) offline

Today you can even buy Bitcoins (BTC) offline. In some countries, you may contact sellers and exchange your cash for Bitcoins (BTC).

In the most developed states of the EU and some U.S. and Australian cities, residents are allowed to buy Bitcoin (BTC) from ATMs.

Buy Bitcoin on Exchange

When buying Bitcoin (BTC) on an exchange, you take crypto coins from the unspecified counterparty who trades on the same exchange. You need to place a “Buy” order, which will be filled by the trader who is selling Bitcoins (BTC).

This method of buying Bitcoin (BTC) is easy due to high liquidity: exchanges are attractive for traders, so there are many orders in their orderbook.

Buy Bitcoin (BTC) directly using cryptocurrency wallet

This method looks similar to the previous one, but the wallet itself acts as the counterparty. The exchange specifies the price of Bitcoin (BTC) itself. Thus, it may be less profitable than the BTC market price.

Direct buying of Bitcoin (BTC) in a wallet takes no more than one step, so it is the simplest way for newbies to start buying crypto.

Best Ways to Buy Bitcoin

Main Advantages

Main Disadvantages

Limits

Debit Card

Intuitive process, high level of accessibility

Non-anonymous transactions, no opportunity to open a credit line, high commissions

$25,000/Day

Credit Card

Intuitive process, high level of accessibility

Non-anonymous transactions,  high commissions

$25,000/Day

PayPal

No need to open bank account, high-speed transactions

Difficult verification, mediocre availability outside the U.S. and Europe

$10,000/Day

Offline 

Anonymity, the simplest trading  process, significantly lower opportunities to track transactions

High risk of fraud 

None

Exchange

Competitive prices, high liquidity

Process of placing the order may be too sophisticated for newbies

Only withdrawal limits

Direct buy in wallet

The simplest way to buy Bitcoin (BTC), takes one click only

Unprofitable pricing, low limits

<$10,000

In which countries can I buy Bitcoin (BTC)?

Bitcoin (BTC) is a global decentralized network. There is no state powerful enough to ban Bitcoin (BTC) purchases.

Some countries still treat cryptocurrencies as an instrument of money laundering. That said, you should always double-check the legal status of Bitcoin (BTC) in your country before purchasing.

What can I buy with Bitcoin (BTC)?

The segment of direct purchases via crypto is expanding every day. Previously, Bitcoins (BTC) were accepted only in darknet illegal marketplaces for illicit trades.

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Today, cars, realty and even travel programs can be bought with Bitcoins (BTC) and other cryptocurrencies. You can even pay with Bitcoin (BTC) for any kind of good on Amazon.

How can I buy Bitcoin (BTC) anonymously?

The user should understand clearly that the Bitcoin (BTC) network is anonymous by default. The blockchain identifies users by their public keys, not by their names.

However, some services may ask you for proof of identity and/or phone number. You can use a VPN or TOR to advance the level of your anonymity.

Best Ways to Buy Bitcoin: How to buy Bitcoin on Lumi Wallet

Launched in 2017, Lumi Wallet has already established itself in the crypto community as a reliable service for purchasing cryptocurrency--Bitcoin (BTC) in particular.

Lumi Wallet is a multi-currency wallet. This means that Lumi supports other cryptocurrencies besides Bitcoin (BTC), i.e. Ethereum (ETH) and Celsius (CEL) and USDT, DAI and PAX stablecoins.

Lumi Wallet does not store the keys of its users: you have custody over your assets during the whole trading period. Lumi Wallet can be also used as a recovery tool: it can open wallets created by other instruments with private keys and mnemonic phrases.

Thus, for starters, Lumi Wallet offers two basic options: to create a new wallet or to restore an existing wallet. Creating a new wallet on Lumi takes a few seconds.

Once your wallet is created, you can buy your Bitcoins (BTC). Mastercard and Visa support is integrated natively into its interface.

How to Buy Bitcoin with Lumi wallet
Image by Lumi Wallet

The user is asked to specify the currency he/she will use to trade, the preferable crypto token and the amount of trade. Mastercard and Visa are the most natural payment options for Lumi Wallet users.

Best Ways to Buy Bitcoin: How to buy using MyBTC.ca

MyBTC.ca, a Canada-based service for buying Bitcoin (BTC), was released in 2014. It therefore pioneered the Bitcoin (BTC)-buying segment in Canada. MyBTC.ca is focused on offering an extensive range of payment methods. This approach makes the process of buying Bitcoin (BTC) in MyBTC.ca really ingenious.

How to Buy Bitcoin using MyBTC
Image by MyBTC.ca

INTERAC payment systems offer e-transfers that allow you to buy Bitcoin (BTC) in 30 minutes. With bank wires, investors can purchase large amounts of crypto or up to $100,000 in equivalent daily. Cash and debit cards allow for comfortable purchasing of small amounts of tokens, i.e. below $2,500 in equivalent. Finally, with Flexepin vouchers, users can buy Bitcoin (BTC) even at post offices or corner stores that bring Bitcoin (BTC) adoption to an unmatched level.

Also, KYC checks (e.g., ID verification) can be conducted in post offices. MyBTC.ca is one of only a few services that offer seamless purchasing of Bitcoin (BTC) with the Canadian Dollar (CAD). MyBTC.ca is particularly proud of its top-level customer support service, available 24/7. The MyBTC.ca system architecture allows its payments to be processed as quickly as it possible on the Bitcoin (BTC) network.

Best ways to buy Bitcoin: How to buy Bitcoin on Coinbase

Coinbase is a leading American multi-currency exchange. Launched in October 2012 by Brian Armstrong, it is well known for the unmatched simplicity of its user interface.

It allows the user to exchange different cryptocurrencies amongst each other in a secure and instant manner. Moreover, it is one of the simplest instruments for buying Bitcoin (BTC).

Buying Bitcoin (BTC) on Coinbase takes no more than a few ingenious steps. First of all, you need to create a Coinbase account.

How to Buy Bitcoin on Coinbase
Image by Coinbase

Then, you need to add a debit or credit card to your account. Bank (wire) transfers also work, but with some geographical restrictions.

To buy Bitcoin (BTC) on Coinbase, the user should initiate a trade on the main screen and specify the details of the purchase: the amount to be purchased, the cryptocurrency and the card or bank account for payment. After the trade is confirmed, Bitcoins (BTC) will be transferred to the user's wallet in a matter of minutes.

To purchase more than $25,000 daily, wire payment from a bank account is the only option. In addition, Coinbase may require the verification of some user personal data points: phone number, email address, etc.

Best Ways to Buy Bitcoin: How to buy Bitcoin on Localbitcoins

Buying Bitcoin (BTC) on Localbitcoins is quite a different story. It is a peer-to-peer trading platform, i.e., you buy Bitcoin (BTC) not from a platform, but from some peer you interact with through LocalBitcoins.

First of all, you need to set up your account. LocalBitcoins has a strict KYC/AML policy: to expand your yearly trading limit beyond $1,000, you need to verify your ID (scanned copy) with an actual photo.

Once your account is verified, you need to customize the conditions of your trade. Users should specify the amount they are purchasing, the currency of the trade, the region of the offer and-- most interestingly!--the method of transfer.

Buy Bitcoin on LocalBitcoins
Image by LocalBitcoins

LocalBitcoins offers the widest range of payment instruments with which to buy Bitcoin (BTC). These instruments include credit cards, SEPA bank accounts, and digital payment systems (PayPal, Zela, Qiwi, etc.); everyone can find a suitable and reasonable option.

When all conditions are specified, the user needs to choose his/her counterparty and initiate the trade. Then, the user sends his/her money to escrow, waits for the Bitcoin (BTC) to transfer to his/her wallet and then unlocks the fiat money for the counterparty once Bitcoins (BTC) are received.

Conclusion

First of all: Never invest in Bitcoin money you cannot afford to lose!

To summarize, here are the basic rules for buying Bitcoin (BTC) in 2020:

  1. Choose the appropriate time and place to buy Bitcoin (BTC). Don’t buy Bitcoin (BTC) amidst market euphoria. Check the legal status of Bitcoin (BTC) in the country in which you are buying it.

  2. Choose the right instrument to buy Bitcoin (BTC). Wire transfers are charged low fees but are not anonymous and can take a few days. Buying with credit cards is instant, but it suits only limited purchases. In-person buying with cash can be anonymous, but risky.

Choose the most comfortable and safe instrument for purchasing. Centralized platforms (like Coinbase) offer rapid settlements, but they obtain control over your keys. Peer-to-peer platforms (like LocalBitcoins) do not provide the appropriate level of liquidity, so the price spreads can be high. It may be reasonable to choose a decentralized platform with a multi-method all-in-one environment.

About the author

Blockchain Analyst & Writer with scientific background. 5+ years in IT-analytics, 2+ years in blockchain.

Worked in independent analysis as well as in start-ups (Swap.online, Monoreto, Attic Lab etc.)