Ben Todd | Jun 2, 2017 | 1
Cheapest Ways to Buy Bitcoin – Unstoppable Buying Methods And A List Of Cheap Sellers
Here we offer the cheapest ways to buy bitcoin and we also give you examples of the types of scams you are going to come across. Everybody is searching for the cheapest ways to buy bitcoin, and that is why there are so many scams involving cheap bitcoin. This article gives you a few risky ways to get cheap bitcoin, it then moves on to scams, and ends with a guide to buying cheap bitcoin and a long list of bitcoin sellers.
Lets Start With The Risky Ways To Get Cheap Bitcoin
Mining is not an option unless you are able to purchase cheap mining hardware and are able to use free energy, such as wind or solar energy. There are two risky options that are both similar. There is arbitrage and there is bitcoin trading.
Ar Bit Rage…..Grrrrr
Arbitrage is simply the act of buying bitcoin from a cheap source and selling it in places where it is expensive. It is actually possible to do this on just one website. For example, I gave it a try on LocalBitcoins. I bought myself half a bitcoin from a somebody who was very desperate to sell.
I then advertised the bitcoin for sale on the website, but I demanded no ID, no verification, and I allowed people to pay with PayPal. Most of the other traders on LocalBitcoins are unwilling to allow the use of PayPal for payment without ID and verification, and the ones that do trade with PayPal will often give people a very nasty exchange rate. I gave an okay-but-not-great exchange rate, I asked for no ID, no verification, and I was happy to sell with PayPal.
I took a risk, but I made a profit from people who wanted to use PayPal and from people who didn’t want to hand over ID or go through the verification process. The profit I made acted as a buffer that helped me reinvest and walk away with more bitcoin than I would have done.
How Arbitrage Can Be Used To Get Cheaper Bitcoin
Take the example of BillyBob who buys 0.003 bitcoin for $100. He goes onto another marketplace website, and he sells it for a higher price because he offers friendlier terms than the other traders (like I did in the earlier example), or because he found a marketplace where traders are selling at an over-inflated price through fees or a bad exchange rate. After fees and taxes, he receives $135. He takes his $135 and is now able to buy 0.00405 bitcoin.
Thanks to BillyBobs actions, he was going to get 0.003 bitcoin for his money, but now he has 0.00405 bitcoin. Arbitrage is all about buying and selling at the right time and from the right place. It has become so popular that a there is even a website called Cryptopia where there is an arbitrage tool. Not only does this make the process a little easier and quicker, but you may also see which exchange is offering the cheapest bitcoin right now.
A Bitcoin Trader
You may become a bitcoin trader (seller) on one of the many sites in the list below. Some of the sites are exchange websites where you are buying from a company, and others are marketplaces where you are buying from other people. You can be one of those other people by opening a selling account. It is a little similar to opening an Amazon seller or eBay seller account.
Each marketplace has its own pros and cons. For example, Localbitcoins asks that you have a fair amount of bitcoin before you are able to trade, but this fact alone helps to keep the hobbiest traders away. There are other marketplaces where you may offer static adverts as well as live adverts, and the static adverts are good for if you cannot get to a computer for a while because you don’t have to be online the make the trade.
How Bitcoin Trading Led To Cheaper Bitcoin
Amelia-Rose knew that trading was a numbers game. She had 0.05394 bitcoin, so she signed up for six bitcoin marketplaces that she felt she could trust and she opened up seller accounts. She divided her bitcoin equally between each marketplace, which means she put 0.00899 bitcoin on each marketplace.
Her bitcoin cost her $232.81, which meant that each of the six marketplaces held $38.80 of her money. On four of the marketplaces she didn’t sell anything, and she lost some of the money from deposit and withdrawal fees. On two of the marketplaces, she was able to sell for around 10% more than what she paid for her bitcoin. She came away with around $236.50, which is a small profit, but it only took her two weeks to earn it. Based on those numbers, she kept trading for 4 months.
By the end of the four months, she had $283.21. She used that money to buy more bitcoin. She was able to buy 0.0656172 bitcoin. After starting with just $232.81 and after doing some very small scale trading, she was able to walk away with more bitcoin.
In addition, traders look at the marketplaces more often, and so are more easily able to snipe the best deals from people who are desperate to sell. You may also find that arbitrage happens by accident when you are trading in bitcoin marketplaces.
Buying From What May Be Scam Sites
I am mentioning this because it is a part of the business. I am not endorsing it, and you are taking a silly risk if you try it. There are plenty of different scam websites. There are two that you may come across if you are looking for the cheapest way to buy bitcoin.
The ID Theft Scam
ID Theft is becoming easier and easier because bitcoin traders, exchanges and marketplaces are asking for everything from your date of birth to proof of your address. They want images of your photo ID too. Stealing somebody’s ID has never been easier, and all that information makes it very easy for people to apply for credit cards and bank accounts in your name.
Be very careful if a website offers you a very good bitcoin deal. An ID theft website may offer you a very good deal on bitcoin. They take all your ID and such, they take your money, and then they close the website down. They also use your ID to set up accounts around the world, and there is nothing your police service can do about it.
Another trick is to offer you a great deal, take all your ID, and then instead of robbing you, they give you the great deal and add a bunch of hidden charges on at the end so that they make a profit when they sell bitcoin to you. What is more, once you see that you are not going to get a good deal for bitcoin, you stop using the website and forget about it, so it comes as more of a surprise in six months when you start receiving credit card bills that you didn’t apply for or spend on.
The Bitcoin Seller Website
The second type of scam website is built to help dump stolen bitcoin. Let’s say that Muhammad Almakhadie logged on to a bitcoin marketplace and duped a trader out of a large sum of bitcoin by buying lots on a credit card and then demanding that the credit card company gives him his money back. Muhammad Almakhadie now finds himself locked out of (blacklisted) from every marketplace he can find, and the marketplaces don’t fall for his VPN (I’m somebody else) trick, so he cannot unload his thousands of dollars worth of bitcoin.
Muhammad Almakhadie sets up a trading website and starts selling his bitcoin at a discount. He doesn’t care about the discount selling price because he didn’t pay for it. He keeps selling until almost all of his bitcoin is gone. When he receives his last order, the one he cannot fill, he has two options. He can sell the website or he can rip off the last person by taking that person’s money and closing down the website. Since Muhammad wasn’t very good at SEO (Search Engine Optimization), he couldn’t get many visitors and was only offered $40 for his website, so he decides to scam the last few people who order bitcoin.
He receives an order, but sends back a message saying that the payment has been held for security checks and that is usually takes 8 working days to confirm. During the 8 days, he keeps taking payments from other people for bitcoin. On day 8, he confirms that he sent the bitcoin (which he didn’t), he keeps the money, he closes down the website, and then goes to close his bank account.
Muhammad Almakhadie scammed his way into getting bitcoin, he offered a great deal to some lucky buyers, and he ripped some other buyers off. The problem is that single scam artists like this will usually go out of business at this point and find a new con. However, if Muhammad Almakhadie is part of a crime syndicate, then he and/or his friends will use the ID and personal information entered into his site to apply for credit cards and to apply for bitcoin accounts so that this whole cycle may starts again.
What If There Are No Cheapest Ways To Buy Bitcoin?
There is no definitive way of saying what the cheapest ways to buy bitcoin are. There are just too many variables. Here are a few factors that will affect how much your next batch of bitcoin will cost you.
- The current exchange rate shown on Google
- Exchange rates given by brokers
- The exchange rates given by traders
- Exchange rates given by online and offline exchange companies
- Where you live in your country in relation to where your closest offline traders are
- Which country you live in
- The type of payment you wish to pay with
- The demand of the other users on the website you are using
- Fees from the exchange company or trader
- Bitcoin network fees for transfers
- The type of currency you are starting with
- How many times you need to convert currencies to get what you want
- Taxes and other charges issued by your country
- Charges issued by your wallet, storage company or storage device
- Cash advance charges issued by your credit card company
Are those all the elements that will affect how cheap your next batch of bitcoin are going to be? I cannot even be sure, especially when you factor in how other alt coins seem to be affecting the bitcoin markets within different websites, and how there are companies that don’t sell you the bitcoin, but actually sell you cloud computing that enables you to mine bitcoin. That bullet point list above features just a few elements that may affect how cheap your next batch of bitcoin will be, but there are probably more I have missed.
Considering the bullet point list above, it seems silly trying to find the cheapest ways to buy bitcoin. After all, what is the cheapest way today may not be the cheapest way tomorrow. That is why you need to strip it back to basics.
Don’t Get Bogged Down With Details – Strip It Back To Basics
Stripping it back to basics means you shop around until you find the best price, and you keep it as simple as possible. You say, I have X amount of this currency, what is the most I can get from this company/trader/exchange/miner with my X amount of currency.
Getting Back To Basics – A Smooth Example
Let’s say that you have $100 and you want to buy a little bitcoin. You may go to CEX and see that they are able to give you 0.0031 bitcoin for your $100. After seeing the offer, you think that is pretty good, but you keep shopping around anyway.
You go to Coinbase and you see that you can get 0.0045 bitcoin for your $100. That is a pretty good price, but lets keep shopping. You then go to LocalBitcoins.com where somebody in your area is itching to sell and is willing to sell you 0.0056 bitcoin for your $100. You buy your bitcoin and you are pleased with yourself. After all that, you found a seller who was going to give you more for your $100.
Keep it simple. Forget about comparing rates and getting bogged down in details. Getting bogged down in details comes later after you have found a series of bitcoin quotes and have a shortlist of the cheapest ways to buy bitcoin.
Consider the amount you have to spend, and then get a quote or work out a quote from each of the websites you visit. The exchange website or trader that offers you the most bitcoin for your money is the one you choose. Just make sure that the website or trader is legitimate and that your quote is not too good to be true.
Picking Where To Buy Your Bitcoin
Keeping it simple, as like with the example above, is a great way to start, but there are some factors that you are going to have to consider. Now you have your cheap quotes and offers, it is time to find out if you can make the trade.
You need to know if the website will trade with you in your country, how long it will take for your transaction to complete, and if the trader is a fraudster. These are things you have to consider prior to actually making your purchase from the cheapest bitcoin provider you can find.
- Is the transaction safe?
- How much do you know about the trader or exchange company?
- Have you landed on the correct website?
- How long will your trade take?
- Do you need to verify your account first?
- How long does it take to verify your account?
- Are you comfortable with giving away your ID and personal information?
- Is there any sort of escrow system to protect buyers and traders?
- Does the website offer a dispute resolution solution?
- What are the minimum and maximum trade limits?
- How are you able to pay for your bitcoin?
- Are there different fees for different payment methods?
- Which payment methods are not allowed?
- Will the rate have changed by the time you make your order?
- Does the trader or exchange website allow trades to people in your country
- Is it possible to get an account from your country?
- Do you need a bank account in a certain country to get a trading or exchange account?
- Are there any local traders where you may
- Is the trader or exchange company going to play fair?
- Are you dealing with a copycat website?
- Is the trader or exchange company a fraudster?
- What type of payment does the exchange or trader accept?
- How much are the fees charged by the trader or exchange company?
- Will they accept your current type of currency?
- How many times will you have to convert your currency before you get bitcoin?
- Will your credit card company consider this a cash advance?
- What payment systems does the trader or exchange company use?
Are those all the questions you need to ask? Probably not, you will probably have a few more. Nevertheless, these are the sorts of things that are going to come up when you are buying bitcoin. Now you may be able to see why there is no definitive way of finding the cheapest ways to buy bitcoin.
Don’t Forget The Fees — Especially The Hidden Ones
One of the nastiest tricks that exchange companies and traders pull is to make you sign up, to make you verify, and make you wait days while everything is all set up, and then tell you about the fees. What is worse is that some of them wait for you to do all of that and wait for you to start putting your order through, and at the very end they tell you how much of your money is going towards fees. They usually claim that they are not hidden fees because they are tucked away in the small print somewhere.
The worst part about this is that it messes up your efforts to find the cheapest quotes because you end up thinking you have the cheapest quote–only to discover that it is just a mediocre as the rest and that you have just wasted a lot of time signing up and getting verified on a website you are probably not going to use.
Don’t Forget That Some Traders And Bitcoin Exchanges Are Fraudsters
There are quite a few bitcoin scams, from things such as fake websites that look like real exchanges, to having people reverse charges after receiving bitcoin. The only way to stay protected is to keep up to date with the most recent scams.
It is not as bad as it sounds. Many of the scams are newsworthy and make for interesting reading. For example, the Chinese government discovered that some of their biggest bitcoin exchange companies had been investing with customer’s money. They had taken bitcoin that had been stood for up to six months and they started investing with it. The end goal was to use other people’s money to earn interest that the company kept itself.
You don’t even need to make a routine effort in order to learn about current scams and fraudsters. For example, I have set a Google alert that emails me whenever something about bitcoin scams or frauds is published. I read it whenever I have my phone and I have a few minutes to myself.
Don’t Forget How Long Your First Trades May Take
Your first trades within a bitcoin marketplace or a bitcoin exchange are going to take the longest. They usually involve some type of verification check before you are able to start trading. Plus, there are some that will hold your payments for a while until you are verified and trusted.
Once you have been verified, or once the marketplace, trader or exchange company trusts you, then your transactions may occur a lot quicker. However, at first, it tends to be a while before you are able to start trading and seeing your money turn into bitcoin.
Cheapest Ways to Buy Bitcoin
Now we have considered stripping it back to basics to get a quote, and you know what to do. And, now you have considered the many questions that each trade generates, and you have thought about hidden fees, and scams, and trading times, it is time to start the process. In the section below, you are going to find a long list of possible places where you may buy bitcoin online (and a little bit offline too).
You Need To Shop Around
Allow us to help you shop around with our big list of bitcoin traders, bitcoin exchanges, and bitcoin marketplaces. There is even a bitcoin mining company in there, and we quickly remind you that there may be local offline bitcoin traders near you and that there may be a bitcoin ATM near you too. For the record, most of the items on the list below are clickable and they will take you to the named website.
Offline exchanges in your area