5 Key Things To Look For When Buying Bitcoins Online
So you’re going to be buying bitcoins online – but you need to know where to buy.
There are a lot of choices out there – some good and some…questionable. But which one is the best option for you?
This really depends on you – your goals, preferences, spending limits and payment options. There’s also a safety factor.
I don’t recommend all exchanges on this site for a reason – there are just too may horror stories out there about people not getting their coins, money going missing, hacking etc.
However that’s not to scare you. Most people who use some easy safety precautions and buy from trusted exchanges online never have any problems.
It’s when you’re not educated and take unnecessary risks that problems start to happen.
With that in mind – and to make your buying experience safe and positive – here are 5 key things you need to consider when buying bitcoins online from any exchange:
Some places are better than others. If you’re desperate and think that BTC is going to be much higher in value in the next few years, then you may not care about price as much.
You may value speed over price (ie. you want to buy today, right now).
However if you’re not in a rush, you’ll want to find an exchange with the lowest fees and markups available. Just be aware that most sellers do charge from 2 – 15% in fees on top of the actual coin price.
Another way to save is by considering your payment method. Usually cash payments, bank deposits and wire transfers have lower fees than Visa, MasterCard or Paypal.
This is because of the extra fees and extra risk that these other payments entail for the seller (i.e. Visa charges can be disputed, Paypal takes extra fees per transaction, etc).
This really depends on your goals. Popular payment methods are buying with a bank draft, bank wire, Interac Online, Interac e-transfer, Cash Deposit into a bank account and Visa.
So if you want to pay with credit card, you may have to start out slow with smaller limits and work up with time as you build trust with the seller.
A lot of people want to buy bitcoin with Paypal – which is understandable. However again, due to the fraud issue (Paypal charges can be disputed), a lot of places will not take Paypal. Or if they do, it’s in very small amounts.
Different payment methods will also have different limits. For example, as stated above, you may have smaller buying limits with credit card than with a bank wire.
Different payment methods also take different time to buy. For example if you do a wire transfer, you may have to wait a few days for the transfer to come through (which, if you’re trying to buy a price dip is not the best option).
Interact e-transfers are great for speed as it takes about 1 – 3 hours to come through and sometimes less.
Buying with a credit card is another way to buy fast.
Cash payment sellers like Bitquick are also excellent as you can lock in your price – then go to the bank to make the cash deposit and get your BTC in under 3 hours.
If you’re just buying small amounts of bitcoins (under $250) this may not matter to you. But if you want to buy larger amounts, you want a trusted exchange that also has high limits.
Limits also depend on how you pay as mentioned above.
Keep in mind however that it takes time if you want to buy higher amounts as you will have to go through a verification process in order to take advantage of the higher limits.
That means uploading your ID or even talking to someone on the phone to verify the information you sent.
Then you’ll have to wait to be verified (which if you’re trying to buy NOW can be excruciating). Some exchanges take weeks to verify you. I have a friend who opened a Kraken account 2 months ago and is still waiting to be verified.
This is especially important for people new to buying as they may have questions or start to worry if their coins don’t come through in a timely fashion.
You want to be able to get customer service if there is a problem.
There’s nothing worse than buying, running into a problem – and there’s nobody to help you or nobody replying to the countless emails you’ve sent.
They’re too big and they value their reputation. They aren’t in it to take your $200 and run – they’re in it to run a legitimate business.
That doesn’t mean they still can’t run into trouble. But it’s a lot less likely that you’ll run into a problem buying and getting your BTC out (storing your bitcoin on the exchanges is another matter however and not recommended).
You also want to look at the reputation of the exchange. If you’re hearing more and more about it (in a good way), then that’s a good sign. If you’ve never heard of it before, be cautious.
It’s also recommended that if you’re buying bitcoins online that you take them out of the exchange as soon as you can and get them into your wallet. Leaving your coins on the exchange is never a good idea.
Exchanges can be attractive targets for hackers and thieves – so just to be safe, never leave your coins in the exchange for anything length of time.
So those are 5 key things to consider when buying bitcoins online.
Everyone is different and it really depends on what you’re looking to do (trade, get BTC now, buy with your credit card, invest for the long term, etc).
Keep these things in mind when buying and use the precautions noted and you’re much more likely to get what you want and have a great crypto experience!