Bitcoins have been around for over a decade now but still they have not been accepted as a mainstream currency by governments across the globe for various reasons. This in particular is one reason why people in general are still unaware about the best and the fastest way to purchase bitcoins. In this article we will try to look at some of the most efficient ways of purchasing bitcoins.
There are numerous ways to transact in bitcoins such as
- Credit/Debit Cards
- Bitcoin ATM
- P2P Exchange
- Cash Transaction
- Bank Transfer
The list presented above is roughly in the order of decreasing speed or efficiency, that is to say that buying bitcoins through credit cards is the fastest method and buying bitcoins through bank transfer is perhaps one of the slowest methods of purchasing bitcoins. Let us now look at these methods in detail to see what they have to offer and where they fall short.
No doubt the fastest way to purchase bitcoins is with credit or debit card. Most people already use their cards for everyday purchase and thus purchasing bitcoins through their cards is not very different. You will simply need to log on to a bitcoin exchange and enter your card details in order to purchase your bitcoins. Cards mostly carry caps and floors in terms of quantities that can be purchased daily or weekly. These limits vary with each exchange so you will need to carry out your due diligence. In addition to these limits, purchasing bitcoins through cards also has a high processing fee. Processing fees can be as high as 6% of the total value of your transaction. So this is clearly one drawback of using cards but if you are looking for speed then no doubt using cards is the best way to purchase bitcoins. The bitcoins will be transferred into your bitcoin wallet almost instantly.
If however you are worried about your identity then credit cards may not be the most suitable option for you. Credit cards are connected with your bank account and thus whenever you make a transaction to purchase of sell bitcoins then your bank and respective regulatory authorities will know that you have made a transactions. Now if you have nothing to hide then this should not be a problem but most people choose bitcoins because of the identity protections. Not everyone who uses bitcoins has something to hide, people simply do not want the government to keep a tab on their transactions and for this reason using cards may not be suitable for those who are looking identity protection.
Bitcoin ATMs also rank high in the order of speed of transaction. You simply have to go to your nearest bitcoin ATM, insert cash and then you can have bitcoins deposited directly into your bitcoin wallet. The issue here, is that bitcoin ATMs are only available in a few locations. You can go to Coin ATM Radar to search for your nearest bitcoin ATM. If you are lucky enough to have a bitcoin ATM near you then you can purchase bitcoins instantly through cash without compromising your identity and data. Since bitcoin ATMs take cash, they keep the identity of the purchaser safe and thus data is not shared with the regulatory authorities.
Bitcoin peer to peer exchanges also rank high when it comes to speed of transaction. But the rates that you may get from the peers may vary from seller to seller. Also depending upon the requirements f the site, your identity data maybe shared with the regulatory authorities. So this is one thing to be careful for. The reputation of the site is also important, a general rule of thumb is to see how long the site has been operating for. The older the exchange the better and more secure it will be.
Purchasing bitcoins through cash is probably one of the most confusing methods but one which people prefer as it keeps their identity anonymous in most cases. Sites like Coinbase do not support cash transactions, so you will need to turn to sites like LocalBitcoins and others to purchase bitcoins with cash. Now every site has got a different protocol so the site you will choose will depend on your preference. Local bitcoins for example relies on local sellers close to your and thus it acts as a platform to connect local sellers to local buyers who can then carry out the transaction in person. This is relatively fast but also carries a higher fees, other sites like BitQuick have got a deposit system where you can deposit money on their designated locations and then receive your bitcoins. The processing time varies from 15 minutes to a few hours.
However the biggest draw back of purchasing bitcoins through cash is the processing fees. It can vary from 2% to 10% in some cases. Another issue with cash transactions is of the risk of a scam. If the website is not trusted then you can end up losing your money. Another issue is of accessibility, compared to credit cards, cash transactions aren`t accessible for everyone, you will need to be close to a seller or near a deposit point in order to have access to this mode of purchase.
Although bank transactions rank lowest in terms of speed of transfer but they rank high in terms of the cost of transaction. If you can wait a few days and are not worried about sharing your data with the regulatory authorities then bank transfer verily is the safest and most cost effective way to purchase bitcoins. The transfer however, is cumbersome and may take anywhere from 5-7 working days depending on your geographical location. ACH transfers in America take roughly five days whereas SEPA transfers in Europe take roughly two to three working days. Banks charge a flat rate of around 1.3% on each transaction and this is very low compared to other modes of payment.
Therefore if you are looking for a fast and efficient way to purchase bitcoins then nothing beats the speed of purchasing bitcoins through cards. You may have to pay a higher fee but it is worth it if you are looking for speed and ease of transaction. Usual caveats apply, you must check beforehand if you are allowed to purchase bitcoins as some countries do not allow such transactions due to regulatory issues. You must also follow the local laws and disclose your identity if you are using a banking channel, making anonymous purchases through cards is prohibited under law in many countries.