The Bitcoin cryptocurrency emerged in 2009 after being created by a software developer known as Satoshi Nakamoto. It is different from regular currency as it is not controlled by banks or any other authorities and it is completely digital.
Some people view it as the currency of the future and there are an increasing number of businesses that now accept Bitcoin as a form of payment, including Microsoft, Expedia, Subway and Dell. There are even pubs and cafes around the UK that are joining in, such as The White Lion in Norwich who were one of the first pubs to accept the currency back in 2013.
Going back a few years, the process of buying Bitcoin was tedious, with many hoops to jump through before being able to make a purchase. Many people, myself included, feared that Bitcoin was unstable or a craze that would soon die out.
It has come a long way since then and at the time of writing, 1 Bitcoin is worth £1986.43 which makes it more than double the price of an Ounce of Gold. Over the last two years, the value of Bitcoin has rocketed by over 1000% and it is still soaring.
If only I had bought £10 worth of Bitcoin seven years ago, it would be worth over £37 million today!
Unfortunately, I have missed that boat but there is still time for me to jump onboard and start investing.
How to Buy Your First Bitcoin
When I began my research on how to buy my first Bitcoin, I came across several exchanges that allow people to buy and sell various cryptocurrencies.
I decided to go with Coinbase because it is the world’s largest Bitcoin exchange with over 8 million customers and it is a regulated company, which offers me some peace of mind.
I can also invest in Ethereum using Coinbase, so it will make it easier for me to keep track of both investments in the same place.
Bitcoins are stored in wallets that are usually protected by an encrypted password or other means to make them secure. There are various wallet options, such as Online Wallets that are managed by a provider or desktop wallets that you can install on to your computer.
They all have their pros and cons, but for the time being I will be using the built-in wallet provided by Coinbase as it seems to be the most secure option.
How to Buy Bitcoin With Coinbase
Registering with Coinbase was simple. After entering a few basic details, I was prompted to confirm my email address. Next, I had to enter my mobile number as this is used for the two-step security code feature that is required for all Bitcoin accounts.
Before being able to go ahead with buying currency on Coinbase, you are required to upload your identification. I uploaded a photograph of my passport document and this was enough to get my account verified. The whole process was straight-forward and took no more than five minutes.
When it came to purchasing some Bitcoin I found that both methods of payment, either debit/credit card or bank transfer, have fees attached. I worked out that debit card would work out best for me but all banks are different so it is worth checking this beforehand.
Unfortunately, there are lower deposit limits on Coinbase for card deposits so for now I can only make total deposits of £325 per week, but I have been informed that this limit will be raised after 40 days.
I started out by buying £250 worth of Bitcoin and after the deduction of fees this gave me a balance of 0.12043496 BTC.
I will also be investing a further £250 on the Ethereum currency and I have already made a start with this, buying in chunks each day as my weekly limit is refreshed.
Now all I have I got to do is wait and hope that the prices keep going up!
More Places to Buy Bitcoin
Although I decided on using Coinbase to buy my Bitcoin, there are other options to choose from.
LocalBitcoins allows people to sell Bitcoin by placing an advert on the website which states the exchange rate and the payment methods that they will accept.
To buy from a trader, you can either meet in person and buy the Bitcoins using cash or you can use online banking. The site offers an escrow service designed to protect buyers throughout the transaction.
Coinfloor is a UK Bitcoin exchange based in London that allows investors and consumers to trade with vetted brokers. It offers the best liquidity for GBP/BTC trading and there are no fees to pay when using the exchange, however there are still charges for deposits and withdrawals.
Currently Bitcoin is the only cryptocurrency available to trade on Coinfloor, but they have stated that they may consider adding more in the future.