Most people have heard about Bitcoin by now via the news, social media, blogs or TV. If you are someone who is just beginning to understand what Bitcoin is, how it works and all of the benefits associated with the technology it’s built on, one of your first thoughts was undoubtedly: “how do I buy some?” Luckily there are a number of options available today that let you purchase BTC quickly and easily.
One of the best ways to acquire Bitcoin is by exchanging USD or another fiat currency for BTC. The most common place where people buy BTC with fiat currencies are Bitcoin exchanges. Today there are a wide range of Bitcoin exchanges to choose from and each one is slightly different from the next. Browse the most popular Bitcoin exchanges below and read our in-depth reviews to learn more about your options.
A Bitcoin exchange is a digital platform where people can buy, sell and transfer Bitcoin or other cryptocurrencies. At the core of it all, Bitcoin exchanges are merely websites that facilitate the secure transfer of fiat or digital currency to BTC and vice-versa. Exchanges can operate using a number of different business models which includes peer-2-peer order-matching or the direct buying and selling of Bitcoin via traditional payment methods such as credit/debit cards.
There are several different types of Bitcoin exchanges, and each one offers unique services. The exchange you end up choosing to use will depend on which currencies you want to exchange and how you want to go about exchanging them.
In the Bitcoin world, there are really two different types of exchanges out there. On one hand, you have regular exchanges such as Coinbase that allow you to buy, sell and trade Bitcoin at any time using traditional fiat payment options. In return for providing you with a secure platform where you can not only exchange Bitcoin, but also store it, Coinbase charges small fees on most transactions. In a lot of ways, sites like Coinbase mimic PayPal in how they function.
Peer-to-peer (P2P) exchanges do not require a middleman like Coinbase. Instead, these sites are nothing more than computer software platforms that are developed to match buyers and sellers of Bitcoin. If you wanted to buy Bitcoin this way, you would go to a P2P exchange site, such as BitStamp, and select the amount you wish to buy and the price you are willing to pay for it.
Once your terms of purchase are matched with another user’s terms of sale, an exchange can be executed. For serious cryptocurrency enthusiasts, peer-to-peer exchanges can often be the most cost-effective trading route, especially if you plan on executing multiple trades. If you think of regular Bitcoin exchanges like PayPal, P2P exchanges function more like a mix between Craigslist and eBay.
Regardless of which type of exchange you are speaking of, they function much like stock exchanges do. The perpetually moving price of Bitcoin is tracked and sales are executed in real time based on the live market price. On a site like Coinbase, by simply typing in the amount of Bitcoin you would like to purchase and choosing a method of payment, you can quickly and easily boost your Bitcoin wallet.
The same holds true for sites like BitStamp. At this point in time, there are always going to be other people out there looking to either buy or sell BTC. Though this was not always the case, there is not a time of day nor day of the year when you cannot quickly, easily and safely transfer Bitcoin.
If you are wondering why someone might choose to use a peer-to-peer Bitcoin exchange over a regular exchange, the most obvious answer would be the absence of high fees on most P2P exchanges. P2P exchanges tend to charges fees based on the volume of Bitcoins being transacted, while other traditional exchanges will charge you a flat rate regardless of whether you are dealing with tens of dollars or tens of thousands of dollars.
Another reason serious BTC traders often choose P2P exchanges is due to the inherent security offered by them. Once again, we will have to go back to the comparison of traditional Bitcoin exchanges being a lot like PayPal and other e-wallets. When you sign up, you are required to disclose a large amount of personal information.
Being that Coinbase, like any other site on the internet, is susceptible to being hacked, your personal information is also susceptible. P2P exchanges often require you to divulge a net total of 0 personal information, meaning that no hacker, government agency, or anyone else will ever be able to know you were the person behind a given exchange. This is not always true, but holds true more often than not.
An advantage of a traditional Bitcoin exchange that is not offered by most P2P exchanges is the existence of a customer support staff, and folks who can help familiarize you with the oft-confusing world of Bitcoin. In addition to helping you link deposit methods to an account, you have all sorts of educational resources that will advance your rudimentary knowledge of this revolutionary cryptocurrency.
We have indexed all major Bitcoin Exchanges so that our readers can browse through our list to find information on each company. On our list below we have listed a brief overview on each of the most popular cryptocurrency exchanges.
Bitstamp was founded back in 2011 when Bitcoin was just beginning to gain traction, and has been running ever since. The site charges fees based on the volume of Bitcoin being exchanged, and requires users to hand over little personal information. Thanks to its relative longevity, Bitstamp has risen through the ranks to become one of the most popular exchanges on the market today.
Coinbase was founded in 2012 and is also up there amongst the most popular and widely used Bitcoin exchanges out there. In many ways, it is a lot like Bitstamp in how it functions. With that being said, Coinbase goes a little above and beyond what Bitstamp does in that it offers a host of other services apart from the exchange alone. As such, its fees are a bit higher than what you might find elsewhere. For some people, however, the higher fees are worth the added peace of mind Coinbase’s reputation provides.
BTC Markets is rising through the ranks of Bitcoin exchanges, and is known for offering a top-class service. In order to verify an account, users of BTC Markets must provide bits of personal information that are also often required in order to open a new bank account. While this is a turn-off to some, to others it means that they know, for a fact, that they are only dealing with other legitimate people and organizations. The one drawback to this site is that it currently only facilitates fiat transactions in the AUD (Australian Dollar).
There are loads of other Bitcoin exchanges out there, and each of them are unique in their own way. We highly recommend that you pour through our listing of the most popular Bitcoin exchanges in order to find the site that most aptly suits your wants and needs.