This is why I was unable to buy bitcoins when I first read about them on HN in 2010 and similar in 2011 when the price had gone over $1 and actually showed promise.
(I have some emails to colleagues / friends showing my frustration at the time of wanting to get some)
I always wanted just 1 (still do), but back in 2010 I was just going to spend £100 and see what happens. It seems in the US the people who did similar to what I wanted to do in varying forms made good profits (and had an interesting ride).
This is different from 'speculating' (e.g. 'oh I wish I had actually bought some') - I had full intent and wanted to buy them, but just the barrier to entry due to UK regulations were very high. I even tried to arrange peer to peer transactions through reddit or in person but they also seemed difficult. Most people I ever met in person who had any didn't want to sell due to the belief of the ever increasing price.
I had luck buying bitcoins a few times about a year ago through MtGox. Their method of getting money in (UK bank transfer) was shut down about October last year, and since then I've not figured out how to buy more. I have to wonder where the money stoking these recent price rises is coming from.
Of course I managed to be highly ineffective at making the most of the bitcoins I had. I think I probably had about 10 bitcoins in my posession at one point, and I probably realised about £150 of real gain out of them. Hindsight is wonderful!
Edit: I should add that I opened my MtGox account a few years ago, before there was any requirement for ID or verification. I think the whole process has become a lot harder since.
It's coming from China[1]. A LOT OF MONEY from China. Like $millions. That's how all these early adopters in the USA are being able to cash out millions and the price is not crashing.
They seem to like the fact it separates them from the US dollar, as well as allowing Chinese residents more control over their money and a potential store of wealth comparable to gold (although far more volatile).
Of course I still believe this is unsustainable, but in a strange form this is a wealth rebalancing act on a global scale... the rich Chinese giving money to the US citizens.
As long as the rest of the world doesn't go bitcoin mad and let the Chinese cash out again, then if it ever pops there will be a lot of wealth lost in China.
I'm more worried what the effect of the Chinese government potentially outlawing BitCoin would have.
Both China and the US government have given BitCoin a tacit (and not-so-tacit) endorsement, China with a pro-BitCoin documentary on state television, and the US with Senate hearings that appeared to suggest the US is not going to move to outlaw it but rather regulate it. I do not see the US government giving its citizens the impression that using BitCoin would be legitimate and then going back on that suggestion - there would be too many vested interests, with a lot to lose, and they would not be cool with that.
The Chinese government is more powerful than the US government, however. There is a chance that they could see their citizens pour their savings into BitCoin and still move for a regulatory crackdown. I'm still concerned that they will believe BitCoin is getting out of control and their ability to control the funds exiting and entering the country through BitCoin is diminished.
The bottom line: the more countries that start using BitCoin, that more stable it will become, the less a single country's regulatory action will impact the price.
I found BitBargain quite pleasant to use. You buy directly from sellers via bank transfer (if your bank supports Faster Payments, which it almost certainly does).
It's coming from China. BTC China has a much lower hurdle and the volume is going up daily in the most populous country in the world. It is a huge potential market for virtual currencies.
The UK is problematic. What's now Intersango - britcoin - used to be a pretty good way of buying them, and that's how I got mine. Just a bank transfer to get the GBP in, then a moderately active exchange. I presume someone's whacked them round the head with some banking regulations, because they don't accept GBP transfers at all any more.
Me too. I tried several times, but was always stymied by living in the UK away from London and not wanting to give my personal/financial details to a site I didn't trust on the internet.
If there was a way to pay cash and get bitcoins, I'd have done it years ago.
It is not practically impossible to buy bitcoins. It may take a little effort that is all and even then it is minimal effort if you spend any time at a computer.
Localbitcoins.com – You can buy bitcoins from other individuals either in person or using bank transfer. There is an escrow system in place for protection of buyer and seller. Using bank transfer you dont even need to leave your house, you can do it via online banking.
BTC-e.com – This exchange does not require verification to deposit money or trade but you may need to provide verification before you withdraw. I sent pictures of my photo driving licence and a photo of a utility bill and was verified within 48 hours.
Bitstamp – you need to be be verified before you can deposit money. Follow the rules they lay down re: high quality scan and photo and you will be fine.
MtGox – Same as above, follow the rules and it is fine. Verification did at one time (April bubble) take a few weeks, it is much more reasonable now.
These are 3 of the exchanges but there are others such as Kraken, Coinbase etc.
So I tried Bitstamp 3 times and was denied all the times. I'm not a noob in this respect, I know what a good scan is and I've used this passport scan (front+back) for many other services. They're just not good at verifying docs there.
Not to mention that the requirement sending hi quality scans of your passport and other personal details to small, obscure websites, like Bitstamp and MtGox, is BS in the first place.
Kraken.com: Up to 10.000$ a month _without_ the need to be verified (SEPA transfer). I signed up and had my EURs on the platform after two days of SEPA transfer.
Here are options the author, and people in general, fail to consider:
1. Sell a good/service on craigslist and require payment in bitcoins. You will find a buyer in a big city. If necessary, even buy an item typically in high demand by bitcoin owners (eg. computer gear) specifically for the purpose of reselling it!
This is kinda true but at lease on your first point still not for regular people. My brother wants to buy some and If I told him, "yeah just go get a pile of asics and sell them on craigslist" I'm sure that would be just as difficult for him. Then he needs to keep a wallet, regular backups and a marginal level of network security.
I don't agree. The first time I acquired bitcoins it was through this website: https://localbitcoins.com
I signed up, posted a request for a meeting and two hours later I met a guy at a main station of a European capital where I got my bitcoins.
Few days later I signed up for MtGox. Again, the verification process took around 24 hours and from that point I was able to buy and sell bitcoins using my regular bank account.
Is this really practical for mainstream use though? If I want to buy a single bitcoin, I need to meet a stranger and bring $1,000 in cash? If this is the recommended method of acquiring bitcoins, it deserves to fail.
It's the recommended method for obtaining Bitcoin (semi) anonymously, ever since exchangers started complying with AML regulations. That, or cash-in-mail sent with a fake return address.
I am a Canadian resident, and went through canadianbitcoins.com about 3 months ago. It was relatively easy and didn't take much time to get my bitcoins.
Serious question: What's to prevent me, as a US citizen, to buy bitcoins on Coinbase, then setup an online store where I sell bitcoins at a 10-20% markup, payable by credit card?
1. I realize I'd be taking a risk with chargbacks. Any way to minimize this? Perhaps hold onto the bitcoin for a period of time?
Seems like the demand from ordinary people is so high, they wouldn't mind paying $100 - $200 per bitcoin if they can pay with a credit card.
Even if you weren't bankrupted by chargebacks, which you definitely would be, the credit card companies would shut down your account. They don't want people buying bitcoins; it's a threat to them.
It's simpler and less conspiratorial than that. It's the same reason you can't buy a money order or cashier's check with a credit card. You're not selling a product, you're creating a situation where your customer can get a cash advance on a line of credit that you did not approve.
As modeless said chargebacks. Think about it this way: If you can buy Bitcoins online without verification you are basically opening up a goldmine to people with stolen credit cards. A user may make 100 fraudulent purchases on 100 different cards through 100 different accounts to 100 different Bitcoin addresses from 100 different IPs. You are stuck with 100 chargebacks, and he is stuck with a nice chunk of anonymous money. Now if you can find a way to avoid that, you have hit the jackpot :)
I have been trying to buy Bitcoins for a few years, it's way too hard. When I was in high school learning programming I wanted to buy them because I heard you could trade with Python scripts. They were $0.30 at the time and I tried to put in ~$50 (if only!). Today I still want to put in $50 - $100 but I can't because as a college student I don't have proof of residence. I have a passport and bank account but I still can't get on Mt. Gox. Sure I can get on Coinbase and buy, but why would I buy something I can't register to sell?
Try CoinJar in Australia, very good company for buying and selling Bitcoin.
Remember do not use their wallet service for holding large amounts of Bitcoin, even the owner of the business recommends keeping most of your coin in a cold wallet.
Yup, I've been experimenting with CoinJar too. While I haven't actually clicked "Buy" just yet (today's Bitcoin prices seem tulip-bulb ridiculous to me), I've been impressed with everything from the website, support, deposit process, bank account verification, usability. The money showed in my CoinJar within 24 hours after depositing at the bank, ready to click buy.
They're requiring identification for sell orders from December 1 though, which could complicate things.
I and four friends have grabbed BTC through Coinjar. One went the ID route, the rest took cash to a NAB branch and deposited which is the quicker path.
Three of us have since transferred some BTC to BTC-E to grab a few LTC. That was a pretty quick process.
When the primary way of trading bitcoin is through unregulated exchanges based in Slovenia and Bulgaria the bigger concern should be your ability to get your money out in the future.
For those in Vancouver, we (Coinwaves) just opened a physical Bitcoin exchange in Gastown to address this problem. It seems online exchanges are still dealing with how to balance fraud-protection and customer convenience. We thought that, for now, an in-person approach made a lot of sense.
We're focusing not only about helping people purchase Bitcoins easily, but also educating them on the technology and methods of safely storing and using Bitcoin. We're also keen to impart the notion that Bitcoin is more than a mere speculative instrument, but a potentially world-changing technology.
Any Bitcoin enthusiasts in town, whether or not you're looking to buy, give us a shout!
It was too much of hassle to buy back when I first heard about it. They were $3 at the time. I didn't really believe it would take off but if it were easy to buy I would have definitely bought $50 worth "just in case".
Hello. I'm happy to sell bitcoins to anyone who is within the UK. If you're near Brighton we can trade face-to-face for cash. Otherwise just email we and we can do a bank transfer. My email is Shanee753@gmail.com . I have a large number of reviews which I can provide. Personally I normally buy my own from an IRC channel on Freenode called bitcoin-otc-uk. Feel free to ask me any questions. It's not too tricky to trade but can be a bit difficult to get into.
This is mostly because people confuse a trading-floor with an exchange. When you travel to, say, Thailand for a holiday, you don't walk into Wallstreet to trade some Dollars for Baht. Instead, you exchange some at an airport of office around the corner. MtGox (and the likes) are like that wall-street. Whereas there are a lot of smaller places to actually buy some BTC, alike that office at the airport.
Yes. When you exchange Dollars for Baht, you will pay a lot more then the average rate that goes on Wallstreet at that moment. And yes, you cannot trade millions of Dollars for Bazillion of Baht. In .nl, for example, there are places where you can buy with a Dutch bank account. Works fine if you want to trade a few tens of Euros.
Stop pointing people to full-blown trading-platforms when all they want is a few BTC. Instead, point them to alternatives, including your personal wallet on your android :).
I, usually, explain people that they can have a few millibit, but not for Euro: the'yll have to sell me something: a bottle of wine, crate of beer, stuff that I would buy anyway. So that I can say that I bought beer with Bitcoin, and to show others that there is actually stuff you can buy for it, rather then purely some get-rich-quick-stockmarket.
I can walk into a currency exchange store and get any currency I want within minutes, Rubles or Kroner or whatever. I can go to a bank and get money in several currencies.
I cannot do this with Bitcoin. It is a lot harder.
It'll always be harder. I can walk into an exchange place with cash, walk out with cash. I do not need identification, I do not need a computer, an account, anything other than cash in hand.
Unless you can convert Bitcoin into a physical item, it will always be harder.
Did you read the article at all? How is mining BTC an option for regular people? Have you attempted to purchase a foreign currency? It's usually a two-click operation at most.
No where did I suggest that mining bitcoin was for the general public. What I was pointing out was that the generalization of the article ("it's hard for me, so it must be hard for everybody") was incorrect and if the author had framed the article better then it would have made a much more valid point.
I totally agree that exchanging cash for bitcoin should be no different to exchanging cash for another currency, but given bitcoins decentralized nature and the fact that none of the major currency exchange companies haven't had the balls to do this means unless you change the regulation so that new companies can move into the space then not much is going to change.
Keep in mind that there are no legally compliant Bitcoin exchanges that support deposits or withdrawals in the United States. This means that their (and your) assets could be frozen by regulators at any point in time with no prior notice.
Paypal shut-down payments to Bitcoin-related accounts as quickly as they find them.
Per our current Acceptable Use Policy for Money Service Businesses, PayPal may not be used to operate a currency exchange, bureau de change or check cashing business including the sale of bitcoins, bitcoin mining units, and other related bitcoin products.
I've just tried VirWox and unfortunately I was not able to buy bitcoins there since there is a minimum of bitcoins that I need to buy (this was not informed in their FAQ). So I'm requesting that they refund my paypal payment. Let's see what will happen..
EDIT: Fortunately VirWox was nice to refund the Paypal payment that I made since the amount that I deposited there was not enough to buy Bitcoins with it.
Although I agree with many things that the author says, I wouldn't say practically impossible.
I, myself, have bought bitcoins and set up wallets for two friends and a family member, regular people as the author would say. After seriously warning them, and letting them know that chances are that they will lose all their investment, they transferred me the money and I gave them the instructions for the wallet.
However, I believe that the more the bitcoin economy grows the easier will be for people to acquire them. I also hope that people will start spending them, instead of just keeping them as an investment.
I never had any of these problems, nor does anyone I know have them. My and everyone's applications at Mt.Gox and Bitstamp and elsewhere have always been accepted, as far as I know. And there are of course alternatives like Localbitcoins or in the Netherlands you can pay using iDeal (e.g. at bitonic.nl) which is extremely easy. A 5 minute deal the first time around. I also never encountered any trouble buying Bitcoin simply for being European. So far I actually thought the people in the US would be having a harder time with the MtGox trouble.
Same experience here. I wanted to grab some Litecoin last week as people started speculating with them as well but I won't totally give up my privacy to shady websites for some gambling.
For exactly this reason we have founded https://bit4coin.net in Amsterdam - an easy-to-use bitcoin gift voucher service. Customers can buy vouchers online (later also in retail shops), and we ship them to their doors. They can then redeem them for bitcoins.
We felt we had to make bitcoin more tangible for new users and put it in a form they are already familiar with and attribute value to: gift cards.
Considering how the price is doing even though it is really hard to buy the things, I shudder to think what would happen if you could buy them at your local bank branch.
Could I setup a small kiosk at a heavily populated area and sell bitcoins for cash and/or money orders? Any regulations in SF against something like this?
At some point, Barclays Pingit (a UK mobile payment service) provided a service to buy Bitcoin by sending cash to services that supported it (you can send cash to a telephone number if it maps up to a bank account). However it was always down when I looked. The only alternative seemed to be wire transfers and escrow which I wasn't interested in dealing with.
The very first sentence shows that the author does not know what he's talking about. Tulips manic is not an accurate comparison because the number of Bitcoins can't be increased except through mining which is a predetermined rate. Tulips can easily be increased by planting more.
I didn't have any trouble at all. Signed up on bitstamp.com, took two days to verify my account. Money which I sent to them (via bank transfer) was credited to my account the next day. All in all a pretty painless experience.
Edit: I live in Switzerland, Bitstamp based in UK or Slovenia.
I'm yet to hear of anyone denying verification. I've had accounts at BTC-E, CampBX, Bitstamp, and Coinbase to name a few. Haven't had a single issue getting verified anywhere and most took less than a week.
I was to buy my first bitcoin. Then the bank tell me is absolute forbidden to make bank transfer to any thing that look alike a forex stuff. Or get money for them. Criminal, you are...
Easiest way I've found in the UK is buying Magic: the Gathering Online tickets via PayPal and trading them for Bitcoin. I dunno if this is the way the future was supposed to be, but it works for me.
this guy is not doing something right, or the fact he lives in 10 different places around the world is a factor. I had no trouble at all, beyond waiting a few days for MtGox to verify me (when they were swamped at the time), and Bitstamp was a day's wait after I fixed the PNG they wanted (not enough dpi for their automated document scanner). That was just a week or two ago.
so to me, all his reasons are specious ones. Maybe I'm just old enough to know how to deal with all the paperwork the Man / the Matrix wants.
I'm a Dutch citizen with a Dutch bank account (with online banking) who can do European transfers with ease. It doesn't matter where I live, as far as this concerned I'm the same as any Dutch/European citizen.
Its even worse outside the US. Most places require a (US) bank transfer. That just isn't feasible for me...I need at least a SWIFT code and would still get hit with heavy fees.
Should be retitled "It's practically impossible for people in my country to buy Bitcoin" as the generalization defeats the point of the article as at least for 300 million people (some of whom are "regular"), the process of buying bitcoin is no more difficult than the process of signing up for a PayPal account.
If you are not one of these countries then contacting your representative/member of parliament and asking them to campaign the legislation changed is generally a much better way of getting the situation resolved than writing whiny articles on the internet.
It's not true that it's hard. For Europeans, buying from Bitstamp.net is not harder than your typical online store experience. However, there seems to be some kind of problem with verifications currently, which is a separate problem. (I guess they are rate-limiting for some reason)
OP seems to fail to grasp the fact that bitcoin is not issued by some bank, but rather individuals in the network.
So to avoid the pitfall of "going to the bank to buy foreign currency" would be buying bitcoin from the individuals. There's #OTC and LocalBitcoins.com and the like that put individuals together to figure out best means of transfer. It carries risks, or course, but what doesn't?
Even these comments here are full of obstacles. Its like techies are so into btc they cant comprehend an article stating a real problem witb bitcoin. Its supposed to be easy but it isnt, all these btc exchanges/markers/sites are worse than normal banking/trade sites.
No I havent handed my photo to my bank and I wont do so for all the shady btc sites mentioned here. I dont hand my ID or "get verified" to amazon when buying stuff or other currencies either.
Bitcoin is the worlds biggest scam.
EDIT: Aside from the verification many of the exchanges actually dont deliver BTC to your own wallet but provide the kind "service" of keeping "your" wallet at their servers.
I was with you until the final sentence, which makes you sound emotionally involved rather than putting forward a logical argument.
That aside, let me retort;
> Its supposed to be easy but it isnt
I agree, and I'll be hugely surprised if some enterprising individual doesn't solve the friction soon.
> No I havent handed my photo to my bank and I wont do so for all the shady btc sites mentioned here. I dont hand my ID or "get verified" to amazon when buying stuff or other currencies either.
I agree. I used bitbargain which was essentially as easy - and documentation free - as using my internet banking to transfer some funds to some bloke's bank account, who then released coin to me. It made me nervous doing it (what other system asks you to log in to your internet banking and xfer funds to some guy's account, simply trusting that they will deliver?) but it's about as easy as it gets currently.
It's a new frontier, it's bound to be rough around the edges. And make no mistake, buying BTC is the edge. Once you've passed that hurdle, the simplicity is beautiful.
>I agree, and I'll be hugely surprised if some enterprising individual doesn't solve the friction soon.
Well, unfortunately, it's not a lack of innovation. It's government regulations. Hundreds of people are capable of setting up and marketing quick and easy ways to buy/sell Bitcoins, but they can't do it without risking jail time for breaking money transmission laws.
Entrepreneurs are eager to take risks, but not the kind of risk that can land you in prison.
What scams have you ever heard of that made it hard to get your money into them?
The reason it's a pain to get into Bitcoin is because of all the regulations that the "shady" exchanges are complying with (and again, how many "shady" operations do you know that comply with government regulations?).
By the way, I do agree that it can be inconvenient to get everything set up initially in an exchange like Coinbase or Bitstamp, but no more challenging than establishing a checking account at a local bank. Both are equally inconvenient to set up now due to onerous government regulation.
> What scams have you ever heard of that made it hard to get your money into them?
The first thing a scammer will say is that he doesn't want your money. Depending on the scam and circumstances, he will even refuse it.
> how many "shady" operations do you know that comply with government regulations?
All such operations must avoid showing up in any government's radar. For that they have to hide some parts of their activity, and look pristine, lawful and compliant in the rest.
Well, I think you're being disingenuous. Please cite a scam that worked by making it hard to get money into the system.
Besides, mind blown! Bitcoin is a phenomenon that has been featured on the front pages of the Wall Street Journal and New York Times, regularly covered on NPR and CNBC, all with coverage that was generally critical but fair, and no one accusing it of being a "scam". And yet you're still hanging on to this baseless, slanderous accusation?
I mean, accuse r/Bitcoin of being mindless cheerleaders of Bitcoin, fair criticism. Accuse the economy of being traditionally filled with libertarians, programmers, and crooks. Fair criticism.
But scam? Come on. It's you who is being disingenuous here.
Its a scam because the first 20 000 blocks and the early adaptors controlling quite a majority of the bitcoins. Now it may be fair to some extent that early adaptors should have some advantage. But for an outsider bitcoin is controlled by a 1% clique who are anonymous. The rest have to identify themselves with passport photos. Its a scam in the sense that it isnt better than what it claims to replace, its worse.
Most scams are hard to get money into because the finance system is specifically organized to make it hard to be scammed or run a scam.
You know, the thing all those regulations are about.
Which is why every scam starts off having to convince you to do something you don't quite understand, with a financial process that will always be a little odd.
My attraction to bitcoin came from it being a bit anarchist.
Now I dont see the point if its just going to be another currency. Where all transactions are under the eye of the state and all holders identified to it but not to each other.
Pardon my ignorance, but I thought bitcoin was supposed to be an anonymous cryptocurrency.
I've read recently that there was a large bitcoin transfer (which had to happen in public due to the nature of the currency), and now all the sites are requiring highly sensitive IDs to function (eg passport scans).
I'm honestly confused. This all seems more restrictive and less anonymous and groundbreaking than cash would be if it were introduced today.
Don't confuse exchanges with bitcoin. If you were to buy a loaf of bread from me with btc, I give it to you after you transfer a small amount to me.
Converting one currency to another is entirely different. Exchanges are only nodes where currencies meet. Leave btc aside for a moment. Lots and lots of fraud goes on in these nodes among regular money. Say you run a drug cartel and you need to transfer money to your Swiss accounts. One way to launder it would be to trade it through a series of other currencies via currency exchanges. Muddies the trail and "cleans" the money.
So what we have right now are exchanges being setup for bitcoin. Mostly they've been done by none-banking people. A few years have gone by, and in efforts to be legitimate the professional ones are conforming to existing banking laws to facilitate the ease of converting between currencies and bitcoin.
The true success of btc will be seen when it is used entirely to facilitate economic transactions, rather than as a financial speculative instrument.
A few months ago, I decided to buy some bitcoin. I did a little research, ended up on coinbase, and linked my bank account and my phone number, and a few days later, I owned a few bitcoin. It was a pretty straightforward process, and as far as I know, they're the only straightforward way to buy bitcoin.
I predict that in a few years, Coinbase will be a billion dollar concern as long as they keep doing a good job and their system isn't compromised. Keep it up!
I would like to point everyone's attention to the fact that the difficulty of buying bitcoins has to do with the current banking system and regulations, not with Bitcoin itself. If you could buy bitcoins by swiping your card, its price would currently be more like $100k, not $1k. Accepting Bitcoin and trading in Bitcoin are the easiest things in the world.
Accepting Bitcoin isn't quite that easy, if your customers are expecting instant real-time online fulfillment. Bitcoin 'merchant accounts' are showing up to make things easier than they were years ago, but there's still some code integration required on a website's backend to make it all happen.
I always wanted just 1 (still do), but back in 2010 I was just going to spend £100 and see what happens. It seems in the US the people who did similar to what I wanted to do in varying forms made good profits (and had an interesting ride).
This is different from 'speculating' (e.g. 'oh I wish I had actually bought some') - I had full intent and wanted to buy them, but just the barrier to entry due to UK regulations were very high. I even tried to arrange peer to peer transactions through reddit or in person but they also seemed difficult. Most people I ever met in person who had any didn't want to sell due to the belief of the ever increasing price.