We often get asked where it is best to buy Bitcoin. How exactly does this work and is it safe? Can I also resell them? In the next blog post I will explain what the options are and what you should / should not do.
Before you buy Bitcoin, it is important to know where you want to store the Bitcoin. You cannot just transfer Bitcoin to your normal bank account. For small amounts you can store Bitcoin in a Bitcoin wallet on your smartphone, for larger amounts it is wise to store it on a hardware wallet. In the article “How can I store the best Bitcoins?” you can read how that works.
The cheapest and safest is to buy Bitcoin on a well-known Bitcoin exchange.
You do this by first creating a free account on such an exchange. This takes some time (up to a few days) because they are obliged to check everything properly due to strict banking rules. When creating the account, they ask for a copy of your ID or passport and proof of accommodation (such as a gas/water/electricity statement).
Once you have an account, it is very easy to purchase Bitcoin. You do this by making a so-called “Deposit” of euros/dollars on the exchange. Most large exchanges, including those outside the European Union, for example, often have a European bank account. This allows you to simply transfer money from your own bank account to the IBAN number of the exchange. Because it is a European transaction, there are no costs involved. When transferring the money to the exchange, you must put a unique code in the description. This tells the exchange where the money comes from and to which account it should be transferred. You will see that unique code if you choose “Deposit” at the exchange. The money is often on the exchange within 1-2 working days.
As soon as you have money on the exchange you can buy Bitcoin with it. Choose the right market (EUR/BTC) or (USD/BTC) and place a limited order to buy your Bitcoin. The advantage of a limited order is that you never run the risk of suddenly having to pay a lot more if the price goes up. By the way, you don’t have to buy a whole Bitcoin. The minimum transaction amount at an exchange is often around €25 / $25.
Tip: Take some screenshots of the Bitcoin you purchase. Make sure that the amount of BTC is clearly visible and that it has been purchased in your own exchange account. You may need these screenshots later if you ever want to exchange them for Euros again. Some exchanges will ask where the Bitcoins come from for larger amounts.
Once you have purchased Bitcoin on the exchange, it is wise to take the Bitcoin from the exchange via a BTC withdrawal and have it transferred to your own Bitcoin wallet.
Here is a list of a few well-known Bitcoin Exchanges
Once you have a Bitcoin exchange account, you can also sell your own Bitcoin there for, for example, in Euros or Dollars. It is important that you can show where that Bitcoin comes from because you can get questions about this due to strict money laundering rules that these exchanges must adhere to. If you have previously purchased Bitcoin via an exchange, that is no problem and you can easily demonstrate this by means of, for example, some screenshots.
Once you have sold Bitcoin on an exchange, you can withdraw the euros/dollars from the exchange via a so-called “bank withdrawal”.
Tip: If you have sold Bitcoin for dollars and you want to transfer it to a European bank account, it is wise to first convert the dollars into Euros on the exchange itself. This saves withdrawal costs.
It is also possible to quickly purchase Bitcoin with iDeal or with Bankcontact at Bitonic. Bitonic is a Dutch company with a good reputation. This works faster and is easier than purchasing Bitcoin from an exchange. However, the disadvantage is that you pay a little more, about 1%, than on an exchange.
There are now many useful apps / online services that claim that you can purchase Bitcoin quickly and easily. However, it often turns out that you have not purchased any Bitcoin at all and that you cannot transfer it to your own wallet. It is unclear what you have purchased.
Our advice: Don’t.