Acquiring Your First Bitcoins
There are various methods to acquiring bitcoins. Among the most popular are 1) selling merchandise for Bitcoins, 2) Buying bitcoins from a brokerage, and 3) Trading other currencies for bitcoins on a currency exchange.
Anyone can sell merchandise for bitcoins. For many, this can be an easy and low cost method for acquiring bitcoins, although it requires quite a bit of care determining how Bitcoin transaction processing can safely and securely fit into the billing structure. Contact CoinNEO for help with these determinations.
Brokerage vs Exchange
Brokerages, such as Coinbase, are a fast and convenient way to buy and sell bitcoins. Brokerages act as a middleman, buying bitcoins in bulk and selling them to customers. Brokerages charge fees for this service, just as any currency broker would.
Exchanges, such as CampBX, MtGox, and BTC-E, offer direct buying and selling between currencies. Once an account is funded, Exchanges allow for quick buying and selling of currencies within the platform, without the need to first withdraw to cash in order to realize gains and losses in local currency. Trading fees are lower than brokerage fees, but funding and withdrawing from an exchange to local currencies may take considerably more time and may be far more expensive.
Funding A Brokerage
Brokerages offer the smallest barrier to entry into the Bitcoin marketplace. Coinbase, a leading US brokerage, accepts these forms of funding methods:
1. Automated Clearing House (ACH): This is the most common funding system for brokerages. This links a US checking account and routing number, allowing users to buy BTC with their USD.
– Transactions typically take 2-5 business days to complete.
– A small ACH fee may be included with each transaction.
2. Credit Card: Credit cards can be used as an additional verification method, allowing for same day bitcoin purchases while using ACH.
Withdrawing From A Brokerage
To transfer BTC back to USD, the BTC is sold at current market value in USD, and deposited as USD into a US checking account via ACH.
– ACH withdrawal process may take 2-5 business days.
– A small ACH fee may be included with each transaction. Coinbase charges a 1% brokerage fee on the total amount, plus $0.15 fixed fee for the ACH deposit.
Depositing to An Exchange
Exchanges are far more expensive to deposit and withdraw money from, but offer lower trading fees than a brokerage. Exchanges would be more useful for those looking to conduct a large volume of trades (day trading, for instance), and to trade bitcoins between other physical and digital currencies. CampBX, a leading US Exchange, offers the following funding methods for US users:
1. Money Orders: Money orders can be mailed to Exchanges in order to fund an account.
2. Personal Checks: Personal checks can be mailed to Exchanges in order to fund an account.
Withdrawing From An Exchange
Withdrawing from Exchanges are considerably more time consuming and expensive than using a brokerage. CampBX offers the following withdraw methods:
– ACH: While not available for deposits, CampBX make ACH available for withdrawal for a $2 fee.
– Domestic and International Wire Transfer: Wire transfer may be initiated for a fee of $20 domestic, and $35 international.
– USPS Money Order: Money orders may be issued for a $20 fee for up to $1,000 withdrawal.
CoinNEO recommends Coinbase for buying and selling bitcoins for regular, every day use. They allow for a minimum purchase of $0.10 worth of bitcoins (remember, bitcoins can be purchased in fractions). Coinbase is very easy to sign up for and use, and even offer $100 in instant currency for new users. Once verified with a bank account and credit card, Coinbase offers immediate buys, and users can have access to and use their bitcoins right away. The fees are reasonable, and their tools are becoming more and more sophisticated as time goes on.
For selling merchandise, Contact CoinNEO to discuss your organization in greater detail.