I remember that when I first heard about bitcoins, I had no idea what they meant or symbolized. Years later here I am writing about bitcoins. People still have a general unawareness about bitcoins, if you ask a random person about how to purchase bitcoins, it is likely that they will not have a clue. It is this general unawareness, which to a great extent is the reason why bitcoins haven`t been completely embraced. If more people knew just how simple it is to purchase bitcoins, they would start buying bitcoins for everyday transactions (where possible).
However this does not mean that the reluctance of governments to completely embrace bitcoins and other crypto currencies has not played its part. It is also to a very great extent because of the reluctance of many governments that people are unaware about bitcoins.
Nevertheless, if you have come to this page then this means that you are interested in buying bitcoins. So let us get right on to business. How can you buy bitcoins with your credit card? Well the process is quite simple in itself but there are a few things that you must know first.
In order to purchase bitcoins, you must first have a digital wallet. A digital bitcoin wallet is where your bitcoins will be stored, just like you keep your cash and cards in your wallet, your bitcoin wallet will be your digital wallet.
Digital wallets come in many forms, such as:
- Paper wallet
- Hardware wallet
- Online wallet
- Desktop wallet
- Mobile wallet
Which wallet should you choose? It depends upon your personal preference. If you are new to bitcoins then I`d suggest using an online wallet till you get a hang of things. Many websites offer online wallets. You can for example get one on Coinbase.
More experienced and frequent bitcoin holders prefer to maximize the security of their wallets and thus they choose desktop, paper or hardware wallets. Beginners however can use online wallets, they aren`t completely insecure but if you are going to hold a lot of bitcoins, then it is safer to keep them in a more secure wallet.
Once you have got your bitcoin wallet, next up you will need to look up for a trusted bitcoin exchange. This is probably the most tricky bit. Why? Because there is a plethora of bitcoin exchanges on the internet. A bitcoin exchange is an online platform where users can exchange their dollars or respective currency for bitcoins. Thus a bitcoin exchange is similar to a foreign exchange, except that it deals in bitcoins.
Since there are so many bitcoin exchanges, it is natural for someone who is new to the concept of bitcoins to get confused. Which bitcoin exchange should one choose? Ideally, one should carry out a due diligence test first. Compare several bitcoin exchanges to make sure that you choose the best one out of the available options. But be careful to look out for scam exchanges. Anything that appears too good to be true should be ignored.
Compare The Rates
Select a few bitcoin exchanges and then compare the rates that they are offering. Bitcoin doesn`t have standardized rates, so this means that each exchange will offer you a different rate. This isn`t wrong, this is a part of their business model. What you should look for is deviation from the pattern. The rates between different exchanges will very but they will not deviate too much. If an exchange is quoting high rate them it is ripping you off and if an exchange is offering a rate that is too good to believe then it probably is, so leave it for it is probably a scam.
Compare processing times
Another thing to look for is the processing time. Purchasing bitcoins through credit cards is one of the fastest methods of buying bitcoins. Once the payment is authenticated by the bank and the gateway, your bitcoins are transferred into your bitcoin wallet instantly. This is what big names like Coinbase and Coinmama do. If any exchange says that the bitcoins will be transferred with a delay then it is probably a scam.
Check The Data Sharing Policy
Bitcoin exchanges by law are required to share the details of users and their transactions with the relevant regulatory authorities to ensure that the bitcoins are not used in any unauthorized transactions. If the website allows you to work around this regulatory and legal requirement then it is probably a scam and hasn`t been registered. You will be better off staying away from such an exchange. If you want to keep your data private, then you can simply purchase bitcoins on cash through a Bitcoin ATM or through Peer to Peer bitcoin networks.
Set Up Your Account
Once you have chosen the bitcoin exchange of your choice, you will need to get registered. Do not consider this as a Facebook sign up. You will be required to submit your contact details, your personal details and also your identity verification documents such as your passport of drivers` license. Without submitting identity verification, you can set up your account but you will not be able to make any transaction. Once you have submitted your details (including your bank details), it may take up to a week to get verified by the exchange. Once your account has been verified, you can now make transactions.
Purchase Bitcoins With Your Credit Card
Now you will simply have to choose your card as your payment method, enter all the relevant details including the key to your bitcoin wallet and then simply choose the amount of bitcoins that you want to purchase.
As soon as the transaction is authenticated by your bank and the payment gateway, the bitcoins will be transferred into your digital bitcoin wallet and then you can proceed to use your newly purchased bitcoins as you wish.