Buying bitcoin is becoming easier every day. There are now lots of sites that allow you to buy it with your credit card, or even with PayPal. It's also possible to buy them from friends, at meet-ups, or from an ATM. But no matter how you do it, there will always be a fee. Here are some tips on how to avoid paying high fees when buying bitcoins.
A bitcoin is a form of digital currency that is created and held electronically. They are not printed like dollars, euros or pounds. Bitcoins can be exchanged for other currencies and they can also be used to buy and sell goods and services.
Bitcoin is the world's most famous digital currency and they're not backed by any government or bank.
without getting ripped off
Buying bitcoin can be a confusing process. There are many ways to buy bitcoin, but it's important to be aware of the fees that are involved with each method.
Bitcoin is not free money—at least not yet. You'll have to pay a small fee every time you exchange your local currency for bitcoin. Some exchanges charge more than others, and if you're using an online wallet, they may also charge a fee for every transaction.
When buying bitcoins, you want to make sure that the site or exchange you're using is trustworthy and that they don't charge high fees. Sites like Coinbase and Bitstamp make it easy to buy bitcoins with your PayPal account, but these sites both charge higher fees than most other methods of purchase (which we'll cover later).
But before we get into how and where to buy without getting ripped off (or scammed), let's discuss what gets lost when you use an online wallet.
If you're buying bitcoins from an exchange, they will likely charge a fee. This is a percentage of the total transaction, usually around 1 percent. For example, if you buy $1,000 worth of bitcoin, that would cost you about $10 to cover the exchange rate and other charges.
The fees for buying with a credit card or PayPal are typically much higher because those payment methods carry higher transaction costs. A typical credit card processing fee is around 3%. So if you're buying bitcoin on Coinbase with your credit card and paying a 3% fee on top of their 1% exchange rate fee, it would cost about $30 to buy $1,000 worth of bitcoin.
As you can see, there's no question that using PayPal or your credit card will make the fees higher than if you were using an ATM or exchanging with someone locally.
If you use a service like Coinbase, then you'll have to pay a 1.49% fee on purchases made directly from them. And if you're paying with PayPal, then your fees will be even higher.
If you want to avoid high fees, then it might be best to buy bitcoins from friends. Or, check out the Bitcoin ATM map and see if there are any ATMs near you that allow for cash transactions.
When buying from an ATM, you should always make sure the machine is trustworthy before giving your card information. You don't want to risk getting charged extra or having your identity stolen.
You'll never be able to avoid fees completely. But there are things you can do to minimize them.
Start with the trading site that has the lowest trading fee. They might not offer the best exchange rates, but they're still worth checking out.
Next, buy in bulk. The more bitcoin you buy at once, the more likely it is that you'll get a discount on your fees.
Lastly, don't invest in something unless you understand what it is and how it works. Bitcoin is a great investment opportunity for some people, but not for others.