Pros and Cons of Common Payment Methods Used to Buy Bitcoins

Buying bitcoins is very frustrating and confusing for beginners. Below is ample information that can make your bitcoin buying process a little easy. To purchase bitcoins, you will need to find a reliable bitcoin exchange.

How to choose a reliable bitcoin exchange?

Consider the following factors -

• Privacy 
• Buying limits
• Speed
• Exchange rate
• Reputation
• Service fees
• Payment method 

After choosing a bitcoin exchange trade local currency like pounds or euros for bitcoins and then store them in a secure bitcoin wallet. 

Common payment methods

Credit/debit card

Many people buy bitcoin online and make payments using debit/credit cards. 

Pros

• Bitcoins delivery is instant as soon as the verification process is concluded.
• Most preferred way.

Cons

• Fees are high.
• No privacy because your ID is necessary to purchase with credit/debit card

Bank transfer or account

Pros

• A good option to purchase a large number of bitcoins.
• Fees will be low, so you get good rates on your purchase.

Cons

• Needs ID verification, so privacy issue.
• Bank transfers are slow. It takes a maximum of 5 business days to complete.

Cash

Pros

• It offers more privacy because no personal detail is needed.
• Bitcoin delivery is nearly instant.

Cons

• Privacy is achieved at a cost. The price of cash exchange is 5% to 15% more than the market rates.
• Easy to get robbed or scammed. [follow exchange rules cautiously]

Bitcoin ATMs

In Bitcoin ATMs just insert cash and have bitcoins transferred to your wallet.

Pros

• More privacy.
• More convenient and fast way of buying BTCs, if there is a Bitcoin ATM in your locality.

Cons

• Privacy is costly. The premiums are 5% to 15% more than the market price.

PayPal

You cannot directly purchase bitcoins from PayPal. As per the T&C of PayPal, merchants cannot sell bitcoins from PayPal.

Pros

• If you have a good balance, then convert the PayPal amount into bitcoins easily and quickly.

Cons

• Fees are more than 12%. It is much profitable to buy with bank transfer or credit card.

Bitcoins can be bought by anyone. Just check the cryptocurrency law in your country. Another question arises is why purchase bitcoins rather than mining.

Purchase vs. mining

In the early days, bitcoin mining was done on home computers. Today, specialized hardware is necessary for the bitcoin mining process. For example, mining gold needs large powerful machines, huge capital and time. Therefore, many people buy gold. Bitcoin is the same. It is simple to buy some rather than invest a lot of capital in mining. Besides Bitcoin supply is fixed to 21 million and until now 17.3 million have been mined. 

Bitcoin exists outside Government regulations, so it is less risky in comparison to dealing with physical currencies like dollars and pounds. Today, buying or selling with Bitcoins is not hard. Remember, bitcoin has extreme volatility, so its rate can wildly fluctuate.

If you plan to trade in bitcoin, it is crucial to know that a sudden dropdown of value can wash your funds. The blockchain technology is still in its infancy and is revealing an unpredictable future because of its tendency to escalate higher and dip down to its lowest…….anything can happen!