Starter guide: with the cryptocurrency boom well and truly under way, more and more people are looking to join the craze. Read on for the safest and easiest ways to buy Bitcoin and other cryptocurrencies as a UK citizen.
Through Your Bank
While many banks see cryptocurrencies as a threat, others see them as an opportunity. Revolut, a recently-launched digital-only bank, has become the first in the UK to offer customers the ability to buy selected cryptocurrencies, including Bitcoin, directly from their smartphone app.
It’s free to open a Revolut account, but the cryptocurrency offering comes with a major restriction: you can only buy or sell the coins, not transfer them, making it suitable only for those using cryptocurrency as an investment vehicle.
Through User-Targeted Exchanges
For those wishing to use cryptocurrencies as currencies, a number of user-friendly exchanges operate in the UK. Coinbase is one of the most popular, offering instant purchase of Bitcoin and other cryptocurrencies on a debit card from most UK banks. These coins can then be kept in Coinbase’s own web-accessible wallets or transferred off the service for transactions or storage.
For larger purchases, Coinbase accepts SEPA bank transfers to a Euro-denominated account which can then be used to purchase cryptocurrencies; sales of cryptocurrencies can be made the same way, and the resulting funds transferred via SEPA to your traditional bank.
Through Professional Trading Exchanges
Anyone wishing for more traditional trading features can give Coinbase’s GDAX exchange a try. Designed for professional currency traders, GDAX is designed as a fully-featured trading platform complete with stop-loss and limit order functionality. Funds must be deposited via a SEPA transfer, with no debit card option – though if you have any funds in a Coinbase wallet these can be instantly transferred to GDAX free of charge.
Through Peer-to-Peer Transactions
Buying cryptocurrencies doesn’t always mean trusting a large financial institution. Services like LocalBitcoins put individual sellers in touch with individual buyers, serving as an escrow service to minimise the risk of fraud. Enter the amount you’re looking to buy and the platform will find a seller willing to trade; make a Faster Payments transfer to their account and you will receive your Bitcoin once the transaction is confirmed.
Another peer-to-peer offering is Bisq, an open-source platform for small and anonymous cryptocurrency trades. Peer-to-peer transactions bring with them unavoidable risks for sellers, however: where a Bitcoin transfer can never be reversed once confirmed on the blockchain, bank transfers can be reversed in the event of fraud – leaving the seller out of both Bitcoin and fiat cash.
If you have old DVDs, CDs, games, or consumer electronics cluttering up your house, you can trade them for Bitcoin at CEX, either on the web or in a high-street branch. If selling via the website simply choose your items, confirm the prices, box them up, and send them via the site’s postage-paid labels. After the goods are checked – a process which can take a week or two – you’ll receive a Bitcoin payment to the address of your choice, priced at the exchange rate of when you first clicked the ‘Sell’ button.
While there are no additional fees associated with being paid in Bitcoin rather than cash, be aware that CEX’s buy prices on goods are typically significantly below the prices on auction sites like eBay.