Many people ask the question: How do you buy bitcoins? There are many methods, but they all come down to one fundamental requirement – an account with a digital wallet that holds the bitcoins. Without this account, it’s impossible to spend your money. If you want to know how do you buy bitcoins, keep reading. You need to be familiar with what a digital wallet is and how it works, otherwise you’ll be lost along the way.
First, let’s start with a brief review of how buying bitcoins works. Every day, new virtual currencies come into being and are created through a process called "bitcoin mining". A single computer at an internet cafe or other location around the world continually "mines" new bitcoins by adding new transactions to an existing pool of previous ones.
The new coins then enter into circulation, and any number of computers with access to the internet can add them to their pools. This is how do you buy bitcoins. Anybody with a digital wallet can add their own transaction to the pool, and when they do, they are given the authority to spend their new currency. Transactions are held in escrow until they’re confirmed, and new bitcoins are issued every 10 minutes in a standard economic difficulty setting.
Now that you know how do you buy bitcoins, the next step is how do you get one of these digital currencies. To start, you can use a broker or an investment firm. Most brokerages offer at least a platform for trading, though some also act as an intermediary between buyers and sellers for smaller accounts. Popular internet wallets like PayPal, MoneyBookers and WorldPay have shopping carts designed for securely buying and selling digital currency. The advantage of using an online wallet like this is that all your trades are kept strictly within your account. And if you wish to sell your account to a new user, you don’t even need to move your money!
You can also buy digital currency directly from websites. There are many websites available for buying and selling this highly speculative type of currency. You should read the terms and conditions associated with each exchange and make sure that your broker is not going to charge you commission for their services. Some exchanges like Gemini will charge you a fee when you buy and sell via their services, but most other exchanges are free.
One of the most popular ways to buy bitcoins is through purchasing them with a credit card. You don’t need to have a lot of money in order to transfer your balance from your regular credit card to your bitcoins. Simply contact your credit card company and request that they provide you with an option to pay for your purchases with your bitcoins instead of your credit card. Usually, all your existing balance will be reduced by the amount of money you want to transfer, up to 0.35 percent.
Another way to buy bitcoins is by applying for a new card. Many banks offer special accounts just for people who want to buy or sell bitcoins. If your bank offers such a service, you may be able to apply online. It is important that you keep in mind, however, that not all cards are available in all states. Check to see which accounts are available in your area before applying. Usually, if you have had your account for a long time, the bank will be happy to work with you on getting you a new card based on your current information.
One of the newest methods to buy bitcoins involves the use of online "exchange traded funds". These are essentially investment funds, which trade like a stock on an exchange. They are made by investors around the world and they are meant to help you diversify your investments, but they can also be used to quickly buy or sell large amounts of virtual currency. Unlike some exchanges, however, you don’t have to open an account with the exchange in order to be eligible for these funds. Instead, you need to open a brokerage account with a company that offers the services to allow you to invest in these funds.