Bitcoin Bible: How to buy Bitcoin

Here’s my regularly updated compendium on how to buy Bitcoin, and well as a look at the Bitcoin investment opportunities that are on the horizon.

Buying Bitcoin (BTC) isn’t easy, but that’s part of what makes it appealing. If the value of the digital currency is rising despite the hurdles, imagine how well Bitcoin will do once the barriers to entry are lowered. Here’s my regularly updated compendium on how to buy Bitcoin, and well as a look at the Bitcoin investment opportunities that are on the horizon:

1) Visit Localbitcoins.com and find a face-to-face or online seller. I live in Dayton, Ohio, and at the time of this writing, there are five face-to-face sellers who are offering Bitcoin within 30 minutes of my home. Here’s their cheapest offering at the moment:

2) See if there’s a Bitcoin ATM in your area. As of this writing, Bitcoiniacs has an ATM installed in Vancouver. The company has plans to open a second ATM in Toronto.

3) Trade Bitcoin on an open exchange like Bitstamp.com. Bitstamp is based in the EU, and you’ll have to wire funds to the exchange before you can start trading. I haven’t personally used Bitstamp. Major competitors include MtGox.com (a Japan-based company that’s been experiencing some delays handling withdraws since July), and BTC China, which apparently took over as the world’s largest Bitcoin exchange earlier this month. That said, BTC China doesn’t look all that user-friendly for Westerners.

In the past, I’ve used BitInstant.com, but their site is down for an “upgrade” at the moment. When I did buy Bitcoin through Bitinstant, I had to schedule a purchase through their website, then print out a voucher to send them a MoneyGram payment at my local CVS. Hopefully, that process will become easier in the months to come.

4) Add Bitcoin to your IRA through SecondMarket. This requires some real cash, though, with a minimum investment of $25,000 at the moment. The trust is managed by Alternative Currency Asset Management LLC, and I have to give SecondMarket props for coming to market with an IRA solution so quickly. Quite impressive.

5) Buy physical Bitcoins by Casascius.com. Casascius is the leading manufacturer of “physical” Bitcoin. Of course, you can’t really have physical Bitcoin, but Casascius gives you the next best thing: a tamper-proof code that can be deposited into your digital wallet. Casascius makes the process even cooler by integrating their codes on gold and silver coins (as well as cheaper metals). Note that you will pay a premium, both for the work involved in the creation of the coins, and the underlying precious metal if you’re buying gold or silver. You can occasionally find good deals on Casascius coins on eBay.

6) Link your bank account to a digital wallet using a service like Coinbase.com. I haven’t tried them yet, but I’m planning to soon.

If you know of any other ways to buy Bitcoin, please list them in the comment section below.

UPDATE on 11/9: I just signed up for Coinbase.com, and I wrote a detailed unbiased review of Coinbase with photos here. In a word, it’s the simplest and most straightforward process I’ve found for buying Bitcoin.

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