Guide to Bitcoin: Buying Your First Bitcoins
There are several ways of acquiring Bitcoin and some are more difficult than others. I’m going to split this article up in to the various methods of obtaining Bitcoin, ascending through the levels of complexity which I associate with getting your grubby mitts on the all-important digital dollar.
Take a read through and decide for yourself which funding method is best for you. If you've arrived here without a decent grip on your Bitcoin brain check out my overview of Bitcoin for mobile casinos and taking a Bitcoin history lesson!
1. Purchase Bitcoins From a Friend or Family Member
Perhaps the easiest, safest and most stress-free method of obtaining your first Bitcoin is to simply pay a friend or family member some fiat currency of your choice in exchange for some bitcoins (or millibits). Agree a fee with your chosen transaction partner based on the value of the Bitcoin price index at the time of your trading, as this will ensure that the deal is fair.
Bitcoin Price Index as of 18/11/2014
Once you’ve agreed on the financial details, make sure that your wallet is properly protected and your passwords and other secure information are backed up- perhaps as a physical copy somewhere safe, because if you lose these you lose your Bitcoins! All your friend and family member then needs to do is send the bitcoins to your wallet using your specific wallet address. Your address is an identifier of 26-34 alphanumeric characters, beginning with the number 1 or 3!
2. UK-Based Bank Transfer Services
Whilst buying Bitcoins from a friend or family member can be relatively hassle-free, we aren’t all ideally placed to do so. I’m pretty sure my parents remember when the ha’penny and shilling were in circulation. So, if your friends and family are as technophobic as mine your next best bet for acquiring Bitcoins is a UK-based bank transfer service.
You might find yourself wondering why you can’t simply put your card details into a website and receive some Bitcoins in return. It’s still not easy to buy bitcoins with your credit card or PayPal because such transactions can easily be reversed with a phone call to the card company (ie: ‘chargebacks’).
Although these services have steadily become more common in the US. Since it’s hard to prove any goods changed hands in a transfer of bitcoins exchanges have tended to avoid this payment method like the plague…
The next best option for UK Bitcoin users is a bank transfer service such as. These type of sites bring together buyers and sellers of bitcoin in a safe and stable environment. In order to purchase bitcoins simply enter the amount of bitcoins you wish to purchase and choose a seller from the list provided. The seller has a limited amount of time to accept the deal, and once accepted the buyer also has a limited amount of time to make the bank transfer using a specific reference generated by the website. Once the bank transfer has been completed the buyer must return to the page and confirm payment. After this the bitcoins will be released into your account and you’re ready to go gambling!
Register With an Exchange
The next potentially arduous method for purchasing Bitcoin comes in the form of cryptocurrency exchanges. You must be registered with an exchange in order to trade on one- buying or selling. To get registered you’ll need to prove your identity in several different ways, for example, Kraken use a tier system which permits different services as you progress through the various identity checks. These checks, at a basic level, involve information about your date of birth and home address, to providing bank account details, utility bills and photo identification.
You'll THEN need to get the details for either an S.E.P.A or international wire transfer. After doing this, you have to copy into the corresponding form in your online banking account.
Kraken and Bitstamp both support SEPA payments and international wire transfers and are available to UK bank account holders; however, such transfers are expensive and will command a fee of £10 or more. Additionally, UK banks are not in the habit of giving out accounts with the SEPA transfer facility for the purpose of trading bitcoin. HSBC are rumoured to have a policy of flat refusal on giving accounts for trading bitcoin.
To cover the process of Bitcoin mining would take at least another article or two. Bear in mind that mining is not for the everyday Bitcoin user and certainly not for the beginner starting out. It requires a fiendish amount of computing power in order to run the hashing algorithm; you’d need to be very, very wealthy to mine Bitcoins on your own or else join a mining pool which involves teaming up with others to mine together and share profit.
What becomes clear about acquiring Bitcoins is that this currency is difficult to get a hold of- but it’s worth putting in the effort to reap the rewards later in mobile gambling. Amazingly, over 50% of bitcoin transactions are currently gambling related. This suggests that cryptocurrencies have something very unique to bring to the poker table, and you shouldn’t be the last one to play your hand. Start out small, and capitalise on any friends or family already entrenched in the digital world of Bitcoin. Otherwise, do your research and use a bank transfer service like Bitbargain that is reputable; the more information available the better. Happy Bitcoining!