How to obtain your first Bitcoin!

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Your first Bitcoin

When it comes to Bitcoin the largest barrier to entry is actually getting your first Bitcoins. There are basically 3 ways to obtaining them: Bitcoin mining, accepting them as payment or purchasing them with dollars through a website or in person. In this post I’ll be talking about the latter.

So you want to purchase some Bitcoins, but where can you get them from? I myself have struggled with this problem and have found a few ways to get your hands on some. In this post I’ll take you through the various ways I’ve tried to get Bitcoins and what my experience was like with each service.

Coined

So obviously this one is only available for people with a New Zealand bank account but I’m sure there are other sites out there like it for other countries. Basically the idea behind this site is that you give them a Bitcoin address, type in the amount of Bitcoin you want to purchase and make a payment into their NZ bank account. Once the payment is confirmed they transfer the amount of Bitcoins you paid for to the Bitcoin address you supplied them with.

Pros

  • Easy – very easy to use, no need to setup an account just supply your Bitcoin address and transfer the payment the the supplied bank account number.

  • All done online – no need to go out of your way to arrange a meet up with someone.

  • No proof of id needed – other than having to have an NZ bank account no id is needed to purchase Bitcoins.

Cons

  • Cost – as far as I can tell the cost of each Bitcoin seems to be calculated from mtgox.com (the highest priced exchange) and then has a fee added on top of that.

  • Slow – due to the nature of online bank transfers the process can sometimes take a day or 2 before you see your Bitcoins.

Btc Quick

This site is based in canada but anyone can use it to purchase Bitcoins as they allow the use of a credit card as payment. The name is a little deceptive as the process of buying Bitcoins may indeed be quick but signing up for an account is not. These guys make you jump through a few hoops before you can start trading with them. First you will have to set up an account and verify it via receiving a text message on your phone. Then you have to send them an image for your government issued id (e.g. drivers licence or password) and your credit card with all the numbers covered except the last 4 to prove you are actually the owner of the card. Once a staff member has looked over the image and is satisfied that it is legitimate you can start buying Bitcoin.

Pros

  • Use a credit card – this is a nice option and a major pro, it pretty much means that anyone can buy from them as long as you have one. Also from a security standpoint you always have the option of issuing a chargeback if you don’t receive your Bitcoins.

  • Very fast trades – after making the credit card payment I received my Bitcoins in under a minute.

Cons

  • Fees – because you are using a credit card you have to pay abit more for the Bitcoins you purchase. Btc Quick adds a 7% + $0.30 to the price of your Bitcoin order as well as using mtgox.com to price the Bitcoins.

  • Account verification – I don’t like the fact that I had to send them an image of my id and credit card just to be able to buy Bitcoins from them, no one should have to do that in my opinion.

  • Limited buy amount – at first you get limited to $250USD worth of Bitcoin per day. With the current price of Bitcoin that wouldn’t even get you 1 (more like 0.5 at current prices), so if you want more you’ll have to make the payments over multiple days.

Local Bitcoins

Basically Local Bitcoins is a website that connects buys of Bitcoin with the sellers in their area. Once you have made your account you are pretty much ready to start buying Bitcoin. Local Bitcoin will automatically determine your location and present you with a list of sellers closest to you and of course you can change the location if you wish.

Once you find a price and method of payment that suits you just click the buy button, fill out how much Bitcoin you want and click the send request button. If you then follow the payment instructions you should receive your Bitcoins fairly quickly.

Pros

  • Quick – Local Bitcoins is pretty quick to get you going and buying Bitcoin, setting up an account only takes a few minutes.

  • Multiple payment methods – though there is no option to pay via credit card the many sellers tend to have a variety of payment options like, over the counter deposit, online bank transfers, meet directly etc.

  • Choice – one of the great things about Local Bitcoins is that you are free to pick the price you are willing to pay for your Bitcoins, you can pay a little more for the convenience of a different payment option or just pick the lost cost per Bitcoin.

Cons

  • Not all online – most of the merchants seem to prefer bank deposits over an online transfer, not a major con but it can be a little inconvenient to have to make a trip down to the bank and make a deposit.

These of course are not the only places you can obtain you first Bitcoins from, there is always the option of making an account on an exchange like mtgox.com or bitstamp.net as well as other websites that offer similar services to the ones I have mentioned here, but I have not had much experience with them so I wont go on to speculate how good they are.

Of the options listed above I’m going to say your best bet is probably Local Bitcoins, the different options of payment coupled with a fast setup time and ease of use makes it the win in my opinion. The other 2 are decent options but their cons have pushed me towards Local Bitcoins for my next Bitcoin purchase.

Want to learn more about Bitcoin?

If you are new to Bitcoin, you might want to check out our beginner’s guide to Bitcoin.

Now that you know how to obtain your first Bitcoin, you might be interested in reading Why should I accept Bitcoin as payment method?

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Comments

  1. Jevon

    Don’t forget BitNZ – you have to submit identity verification and it will take 1-2 days before you can purchase your first Bitcoin, but it’s the NZ exchange with the highest volume and not much more expensive than other major exchanges.

    Reply
    1. Mike Post author

      Yep you’re right, BitNZ looks to be a good option for anyone wanting to buy Bitcoin in New Zealand. I have been meaning to give it a go, but for this post I didn’t want to include too many New Zealand specific options as a lot of our readers come from other countries 🙂

      Reply

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