Bitcoin is gradually growing in popularity as more and more people learn about cryptocurrency. Many people have realized that they can make some money on the side trading cryptocurrencies.
There are, however, some tricks that you need to learn to make trading cryptocurrencies and especially bitcoins lucrative. Key among these tricks is the method you use to pay when buying bitcoins.
There are various payment methods you can use to buy bitcoins. Some are safer than others, some cheaper in terms of transaction costs, and some are a mixture of both. You need to identify a method that is both safe, fast and does not have a lot of transaction costs. Here are some of the secured payment methods you can use to buy bitcoins.
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The Paysafecard option is one of the secure methods you can use to buy bitcoins from various exchanges. This method is a prepaid card available in more than 45 countries with over 600,000 points of sale that you can use to buy coins online. These cards are convenient and anonymous.
Clients simply buy the cards at designated presale locations such as gasoline stations and post offices. You get to choose the credit balance that is within the range in the region you are located.
With this card, your personal information is protected as you are not required to provide any personal details. You can link your card with their e-wallet “My Paysafecard” and use only your username and password to make any transactions possible with this card.
Bitcoin Automatic Vending Machines (ATMs) are not as popular. These machines are available in countries with less stringent restrictions on cryptocurrencies but are gradually taking root in more and more countries. A bitcoin ATM works more or less like a cash ATM only that in this case, instead of using your card, you instead feed the ATM with cash, then it sends bitcoins to your bitcoin address. Most of these ATMs are anonymous, but there are a few that will require you to provide them with an ID.
The downside with ATMs is that they might charge high fees and do not show the actual price of the coin at the time of purchasing. Additionally, if there is an irregularity, it might be difficult to have it solved due to lack of human support. If you want to use a bitcoin ATM, you can use the Bitcoin ATM radar. This is a site that shows you the bitcoin ATMs available in your area.
If you want to make large transactions, bank wire transfer is your safest bet. Once you identify a suitable exchange that supports bank wire transfer, you place an order for the number of coins you need; then wire the required amount to the exchange’s bank account.
This method is safe as there is a trace of where your money goes to, in case the exchange fails to deliver. You may have a chance of getting back your cash in case of irregularities, but it is not a guarantee. Wire transfer is relatively cheap in terms of the transaction fees but provides less anonymity since you have to go through Know Your Customer (KYC) verification.
If you are looking for anonymity, you would be better off with bitcoin ATMs or using cash. The other downside of using wire transfer is the waiting period. Unlike cash and ATMs which take a few hours for you to get your coins, wire transfer may take a few days or even weeks to complete a transaction.
Buying Bitcoins with Cash
There are places where you can buy bitcoins with cash. Localbitcoins site, for instance, allows you to buy bitcoins with cash whereby you can give the seller the cash directly if you agree to meet in person or deposit the same in the seller’s bank account. Meeting in person can be secure if the transacting parties trust each other. But you can always meet in a public area with enough security and carry out the exchange. You simply give the seller your money in cash, and they instantly transfer the required number of coins to your bitcoin wallet. This method is one of the fastest means of buying bitcoins.
This is considered as the easiest of options when you prefer to stay anonymous in a big city. With this method you can avoid visiting banks and verification of documents. Fees is generally higher when you look to pay via banks when compare it to paying over the counter with cash. Paying with cash is a bit annoying at times when you have to visit locations, rather than just able to pay it online, which is less risky. Before carrying out transactions face to face, check whether trades involving bitcoins are legal or not in your region.
Also read, The Bitcoin Hoax
Buying Bitcoins with Credit and Debit Cards
This method is very popular among crypto enthusiasts. Transactions using debit or credit cards are usually very fast. You get to receive your bitcoins in a matter of hours, without having to meet anyone in person.
They are also very easy to use as you simply enter your card details and authorize the exchange you are transacting to deduct the specific amount of money you want to pay for your coins.
On the downside though, you never remain anonymous as you have to provide personal details and you also get to pay a lot in transaction fees. These cards are thus ideal for small and quick transactions due to their high rates of transaction costs.
Buying with PayPal
PayPal is a money transfer company. It facilitates a transfer of money between individuals and companies as well as payments to corporations. In order to use PayPal, you need to register an account with them using your email and a few personal details then verify the account with your debit or MasterCard.
Using PayPal to buy bitcoins is relatively easy and secure but a bit costly. You need to have a credit balance in your account in the currency of your choice that PayPal supports. You then have to identify an exchange or platform that supports PayPal as a payment method.
PayPal payments are instant. Once you send the money to the respective exchanges account, they should only take a few minutes to verify the payment and send you your bitcoins. If they fail to send you your bitcoins, they can initiate a chargeback and have your money returned to your account. PayPal is, however, costly since you have to incur the sending charges.
Apart from the methods mentioned above, you can follow these steps which will help you in carrying out transactions securely.
Step 1: Using a safe WiFi network
If this is your first time or your tenth, you need to switch to a secure WiFi connection be it either public or a private connection. Each connection demands separate rules, and here we provide you for each of these WiFi networks.
Rules to follow when connected on a Public WiFi:
- Never under any situation use an unsecured WiFi connection to purchase bitcoins or to access exchanges and wallets.
- Use Virtual Private Network(VPN), when you are accessing exchanges or wallets on Public WiFi.
- Once you select VPN, you can easily access accounts using the public WiFi.
Using a Private Network
Although you are using a Private connection, you might find it quite safe but there are few things that you need to take into consideration to ensure secure transactions.
Rules to follow when connected on a Private WiFi.
- While creating a password go for a strong and complex one, we recommend you to use a password that by no means is related to you.
- Although a password might be hard to remember, note it down and share it with the ones you need it(family or friends)
- Get a new router as most of the old routers follow the outdated safety protocols.
- For additional security, you can use the VPN of your home network.
Step 2: Choosing an Exchange
The Step 2 is time-consuming but at the same time is beneficial. To get started with the exchange site, you need to create your account first. You need to put a certain amount of effort into researching for the best bitcoin exchange. The exchange site job is pretty simple, select an exchange which easily allows you to purchase bitcoins in exchange for fiat currency.
Step 3: Analyze if Phishing
A crucial point to consider is whether the exchange site serious into the bitcoin business or is there to acquire sensitive information.
- Check if the URL of the exchange site is authentic enough, if authentic enough, mark it as a bookmark and save the URL.
- You will have a clear indication if the site is real if you find ‘https’ before the URL.
Step 4: Using a Password Manager
The account you create on bitcoin exchange will have access to your bank, cards and other digital assets. And this is why building a strong and unique password is a must to carry out exchanges.
Use a password manager, which allows you to generate password easily, and also help in storing them securely. A password manager enables you to have access anytime from anywhere right under your fingertips.
What are the risks involved when buying bitcoins?
While paying with cash to buy a large sum of bitcoins can be difficult, this is why professionals in this business recommend paying via cash only for small purchases. And Bitcoin ATMs come with a set of rules that carry some amount of limitations, once the purchase limit exceeds they ask for verifications.
Does sharing of ID carry risk, when looking to purchase bitcoins online?
In the world of hackers anything which is available on the internet is prone to attacks and bitcoin is not an exception. But it relies on how well you trust the exchanges. And with the increase in attacks on major websites, exchanges these days carry many layers of protection to secure data of traders on their platform.
So these were some of our methods to help you in purchasing bitcoins safely. If you have any questions or suggestions relating to this article, write to us in the comments section below.