How to Buy Bitcoin
Depending upon where you live (domestic or international) and your preferences, you use your regular fiat money to buy bitcoin. Assuming you already have a crypto wallet, you can then use your credit card, debit card, bank transfer (ACH), or other means of E-Transfer to buy Bitcoin on any given BTC exchange.
DISCLAIMER: This is for strictly educational purposes and by no means should be taken, considered, or otherwise used for financial and/or investment advice
Understanding Data Privacy
The first factor you should consider when choosing whether to invest in Bitcoin is how much of your information you want out there. Regardless of the platform you use, most exchanges are required to adopt Know Your Customer (KYC) rules to verify the identity of its users.
However, there are different levels of KYC, which may require you to disclose more (or less) private information:
If a platform has “No KYC,” this means that the platform or the seller of Bitcoins do not know who you are. For your purposes, you aren’t required to show any form of identification document. You simply can pay with a private means of payment, such as Western-Union or Moneygram.
Some jurisdictions allow you to buy bitcoin without KYC, with P2P marketplaces like LocalBitcoins, ATMs, or Gift Cards. However, this is more expensive than other alternatives.
This level of KYC identifies you by your payment channel and/or your phone number(s). If you choose to pay with your bank account (ACH), PayPal, credit card, or other common payment method, the payment providers will almost always know your identity.
While this option is available on some exchanges, it is a limited option and hard to find.
This is the strongest level of KYC, which requires you not only to verify your identity with your phone number and bank account, but to also provide the actual identity documents to prove your identity.
These documents can include a passport, ID card, driver’s license, utility bill, or a combination of these options. Some platforms take the extra step in having those documents notarized before a notary or a trusted-third party, like your bank or financial institution.
As you will discover, the more you want to invest larger amounts of your money or trading in large numbers on these exchanges, you will almost always be required to comply with Full KYC.
Methods of Buying Bitcoin
There are five distinct ways an individual can purchase bitcoin--ATM, Gift Cards, Exchanges, P2P-Markets, and/or Exchange Platforms.
Arguably, the easiest and most private method to acquire Bitcoins is through a Bitcoin ATM. In 2013, the world saw the debut of the first-ever Bitcoin ATM, when Robocoin placed such a machine in a Vancouver coffee shop, allowing customers to trade cash for Bitcoin, and vice-versa. On its first day, the ATM saw $10,000 in BTC transacted on its first day.
As of November 9, 2020, there are an estimated 11,665 crypto ATMs around the world. Last year, there were an estimated 6,372 ATM machines, showing an 80% increase from the end of 2019 to today.
The United States recorded the fastest spread of crypto ATMs, with the number of crypto ATMs in the US increasing from 4,213 ATMs in 2019 to 9,242 ATMs in 2020--a 50% increase. The U.S. currently accounts for approximately 79.2% of the total number of crypto ATMs in the world.
Canada comes in second, with 880 ATMs as of November 9, 2020, followed by the UK at 268 machines, Hong Kong with 62 machines, and Colombia with 59 machines.