Last updated July 27th, 2016
In this post, part of our series about the burgeoning currency Bitcoin, USAbetting.com focuses on how to buy Bitcoin at an exchange.
BTC is gaining major traction in the USA’s offshore betting industry and, fortunately, getting your hands on your first Bitcoin is a simple process. Here is the step-by-step procedure of swapping USD, or any currency, into the brave new crypto currency:
Join A Bitcoin Exchange
Whatever currency you have then you need to buy your Bitcoin at a trustworthy exchange. The best known and trusted of these are arguably Kraken and Coinbase. Those two exchanges are good options for the US and Europe while OKcoin is the biggest for China.
All good exchanges will have Know Your Customer (KYC) requirements, so be aware of this. You will have limited use of their facilities until these are completed. They generally want you to upload a passport or driver’s licence and a utility bill.
There are numerous Bitcoin exchanges, these are some of the better known ones:
- US & Europe: Kraken, Coinbase, Gemini.
- China: Okcoin, Huobi, Btcchina.
- UK: Coinfloor.
- Others: There is also an ‘exchange’ called Localbitcoins, but this is dealing direct with individuals and so does have more potential pitfalls than the others. However it does offer more options, such as getting funds in and out of Bitcoin via Paypal, Neteller and Skrill as well as literally swapping anything for or instead of Bitcoin.
We do not recommend any of these exchanges specifically, but if you are looking for one good solid option and you are from the US or Europe then Kraken might be the one. Their system is easy to get the grips with and they are big, regulated and trustworthy.
Send Currency To Bitcoin Exchange
You simply open an account at one of these and send them your traditional (also known as ‘fiat’) currency. You can do that by bank transfer, wire or from a credit or debit card. Your funds will then show up within your account in that currency.
Exchange Currency: USD to Bitcoin
To swap all or some of your currency, whether it be USD, GBP or maybe EUR, to Bitcoin you use the exchange system that these firms have. They have both a simple or more advanced method. Before you go ahead and make the swap it would be best to take a look at the exchange rate for your currency, say USD to Bitcoin.
With Kraken, a trustworthy and regulated firm, the “chart” can be linked to from the bottom of their website. Keep this chart open in a separate tab or window and also keep your account overview area open in another tab.
Here is a screenshot of the Coinbase equivalent exchange system (it is found by clicking “GDAX” at the bottom of their page). Do not be intimidated by it at first glance, because it is simpler than it looks:
Make sure you are looking at the correct chart for the currency you deposited. In the image above you can see it is the BTC/USD chart. The area to concentrate on is the ‘Order Book’, which we highlight below:
All we are looking for at this stage is a fair price for our exchange of USD into Bitcoin. The orange list are the orders being sold (sell orders) and the green list those orders lined up and ready to buy (buy orders). Where the two meet is the current market price and you can see the gap or “spread” between them.
You can see, in green, an order at $638.31 for 4.66383 Bitcoin. That order is waiting to buy at that price, while the orange one above it is the lowest price ($638.77) available to be bought ie: that is the cheapest being sold.
The ‘market size’ is how many Bitcoin are available to buy or sell at the price.
If you are new to this then don’t panic. All we need to learn here is the actual price. So if we use their much simpler system of buying or selling within your account then you will be aware of the current exchange rate rather than going in blind. We aren’t doing anything more complicated than getting a rough idea of where the current buy point is.
You can buy and sell using that chart screen at Coinbase (the screenshot above), but if this is your first time then maybe just use the simpler order system within your account. This is how it looks with Kraken:
Your order obviously still goes to the exchange (via the ‘chart’ link on Kraken) but this facility is designed to be easier to use. In fact with Kraken this is the only area you can use to buy or sell. You can see we are on the simplest screen of three and that there is also an ‘intermediate’ and ‘advanced’ option available (as seen above).
We recommend that your first buy order is very small in case you make any mistakes, but it should be fairly hard to go wrong using the basic interface. The exchange will always fill your order either at the price you set, which will sit there and wait to be filled if it is lower than the market price or at the best price available (if your price is higher than required to fill it).
Have a small go first and maybe see your order show up on the charts, just for your information. You can do the whole amount after that, when you feel more confident.
All exchanges work like this, although their software varies a bit. They all have a simple way to trade and they all have the charts which show the current price. Once you have traded or exchanged your funds a couple of times it will all seem so simple. It really is a case of needing to try it out to see how easy and logical it is. Reading about it here at USA Betting probably just makes it sound more complicated than it is in practice.
Send To Your Bitcoin Wallet
Once you have swapped your currency for Bitcoin you can then withdraw those funds to the Bitcoin wallet on your PC, if you have one. You can of course just leave the Bitcoin in your exchange account (exchange wallet), but it would be safer to set something up your end.
Kraken should be a very safe place, but there is always the risk of someone hacking your account or worse. There was an exchange where all funds were lost, Mt Gox, so it may be best to sort out an alternative.
Also, we advise that if you are sending to and receiving funds from USA Bitcoin sportsbooks, casinos or other betting companies that you do it from your own PC wallet, and something like Electrum is ideal for that.
This method keeps most of your transactions private in a way that using the exchange wallet to send them does not. Kraken and Coinbase are regulated and trustworthy and because of that they may ask questions if they suspect transactions involve US-facing betting companies. So really, just use them for the exchange process and little else.
- We hope this USAbetting.com post on how to buy Bitcoin has helped you as an introduction to this booming currency. We also have an article on how to sell bitcoin. Please do leave your experiences and comments below.