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When Bitcoin (BTC) began back in January of 2009, the only way you could get some was to mine it (use a computer system to perform a mathematical calculation to confirm transactions and add them to the next block in the blockchain).
For years, there was no way to buy crypto.
If you knew someone back then who had some BTC, he might give you a few, or a lot. Bitcoin was worth less than a penny, so giving away 100 didn’t matter much.
As Bitcoin grew in popularity and price, more people began mining it and the other cryptocurrencies that sprang up soon after it.
Eventually, there was enough BTC and other coins floating around that someone came up with the idea of creating a trading platform, along the same lines as a corporate stock trading platform.
Thousands of people could now trade one crypto asset for another (e.g., Bitcoin and Litecoin) at whatever price the buyer and seller could agree on for that crypto pair.
But there was still one problem: how to get hold of some crypto in the first place? How could people purchase cryptocurrency?
There are now several ways you can buy crypto. As with anything else, they range from the convenient and more expensive to the less convenient and cheaper.
In the U.S., independent ATMs are big business. Just about every small store has a standalone machine that dispenses cash. The fee is hefty because the ATM owner has to charge a fee on top of any bank fee. And the store owner has to be paid as well.
The same idea is now available in the crypto world. If there’s a cryptocurrency ATM near you, you can buy some BTC, Ethereum, Litecoin or Bitcoin Cash using cash. With some machines, you can even use your debit card.
The advantage to using an ATM is that it’s anonymous. However, you do need to provide a mobile phone number.
If you use your debit card for the purchase, you’ll no longer be anonymous, since the bank will have a record of the transaction.
To find an ATM near you (there might not be any close to you), do a search for “crypto atm near me” or “cryptocurrency atm near me.” Or use an ATM locator website that will find an ATM for you, like this one.
Before I leave the topic of ATMs, there are two other ideas that might interest you, depending on your circumstances.
You can buy one or more ATMs and install them in various locations nearby. They’re not cheap, so it might not make sense financially unless you have a high-traffic store where you can install one.
Don’t want to buy one? You can host a Cryptobase ATM in your high-traffic business. Learn more about it here.
Yes, crypto went mainstream a few years ago. You can now buy cryptocurrency with a credit card.
It’s definitely not cheap though. Although you’ll see most services advertise that they charge only 3.5% per transaction, or a $10 USD minimum, think about that for a moment.
If you want to buy $1,000 of BTC, you’ll pay $35 for this convenience. The worst part is that they take the fee out of the amount you want to spend, so instead of receiving $1,000 of BTC plus a $35 fee, you’ll receive $965 of Bitcoin.
And unless you’re planning to buy $300 or more per transaction, you’ll be paying the $10 minimum fee, which makes the percentage rate even higher.
I don’t advise using a credit card unless, somehow, you managed to obtain one without having a bank account and it’s your one and only option. Transferring funds from a bank account is a much cheaper way to buy crypto.
The options that a trading platform will offer you depend on the platform, and on which country you live in.
For example, in Canada, options include sending a bank draft, which involves going to your bank and requesting one, a wire transfer, which also involves going to your bank, or an Interac E-transfer.
Bank drafts and wire transfers are not free. Interac transfers may be free, depending on your bank. The bank draft and the wire transfer take up to a day, during which time crypto prices could be wildly different than they were when you started the process. The Interac process, done all online, takes about 30 minutes.
And since they all require a bank account, the Interac option is definitely the way to go. Unless you bank at a credit union that doesn’t support Interac E-transfers.
If you’re a Canadian, you can use your bank’s debit card to fund your purchases on Coinbase.com, a U.S.-based exchange, and one of the largest in the world.
If you live in the U.S., and you’re using a U.S.-based exchange, you have more options. For example, with Coinbase, you can fund your account using PayPal, Apple Pay, Google Pay or a debit card and have the funds almost instantly.
Or you can use a wire transfer, which takes 1-3 business days, or an ACH transfer, which takes 3-5 business days.
Binance.us, which is for U.S. citizens and residents only, provides ACH, wire transfer and debit card options.
On the international version of Binance (everyone except U.S. users), funding options include wire transfers, third-party services (with high fees), and P2P (peer to peer) purchases.
Check your preferred exchange for its funding options, as it may have one or two that are unique, or unique to your country.
With a P2P service, you’re buying from an individual.
On Binance.com, anyone outside the U.S. can buy from an individual registered with Binance. The crypto will be in your account in minutes.
The funding options are typically the same as you’ll have with an exchange in your own country (e.g., Interac E-transfer for Canadians).
If you want to buy Bitcoin, and have no other options, LocalBitcoins.com may be what you need. Since sellers aren’t vetted, as they are on Binance, LocalBitcoin uses escrow to ensure you aren’t scammed.
You deposit your fiat currency (or other crypto) using the options a particular seller will accept. Once the user receives the funds, LocalBitcoins releases the BTC to your wallet address.
If you want to buy a substantial amount of crypto (typically at least $5,000 USD), there are OTC (over the counter) services you can use.
For example, if you want to buy $5,000 or more of the Celsius Network CEL token, you can contact their OTC staff at firstname.lastname@example.org to arrange the purchase.
Since CEL doesn’t trade on many platforms, it’s not easy to get any without running into some serious trading fees.
The OTC method may get you CEL at a reduced cost compared to buying it on an exchange.
You can buy crypto using PayPal, Robinhood, Square and other platforms. However, it’s important to note that you won’t own the crypto. You’ll own a portion of the pool of crypto that the platform holds.
This means that you cannot transfer the crypto to a wallet under your control.
This is a counter-party risk. If PayPal or Robinhood should ever fold or be hacked (admittedly unlikely, yet still possible), you could lose all of the crypto you hold there.
Also, you can’t earn any rewards from the crypto you “purchased” on those platforms.
So I recommend not buying from them unless you’ve run out of other options.
Crypto ATMs. Wire transfers. ACH. Credit card. Debit card. Google Pay and Apple Pay. Peer to peer. Over the counter.
There are enough options available to you that you should have no problem finding one to use to buy crypto.
And if you plan to earn rewards (interest), Celsius Network is a great place to park your assets once you’ve purchased them.
Click on this link to learn more about Celsius, including how to receive a $50 USD bonus, paid in Bitcoin, just for signing up and depositing some of your crypto.