The Bitcoin Wallet
Before buying bitcoins, you must first have a Bitcoin wallet. They’re called wallets in the Bitcoin community, but they’re actually like bank accounts. You can either have a software wallet stored on the hard drive of your computer or have a wallet in an online, web-based service – the most popular being Blockchain.
Blockchain, however, does not exchange bitcoins for any fiat currency, but have mobile solutions for Android and iOS. The latter’s Bitcoin wallets were initially banned by Apple, though this has since been reversed.
On October 29, 2013, the world’s first Bitcoin ATM went online in Vancouver, Canada. The ATM machine scans a user’s palm before he can proceed to buy or sell bitcoins for cash. In the United States, the first ATM machine went online on February 18, 2014 in Albuquerque, New Mexico, though it was removed after a month.
Where to Buy Bitcoins?
Aside from mining, bitcoins can also be acquired through exchanges or directly from other people selling them. Purchase of bitcoins can be paid through cash, credit/debit cards, wire transfers, and even through other cryptocurrencies, depending on who you buy them from.
However, it is still a bit hard to buy bitcoins using credit cards or even PayPal as such transactions can be easily reversed by making a phone call to the credit card company. This has led several Bitcoin exchanges to avoid this method, although the variety of payment selections has seen an improvement recently. Coinbase, for instance, now accepts cards.
Also, buying them on exchanges can be a bit tricky due to severe anti-money laundering regulations in some parts of the world. Nonetheless, the growing market of bitcoins worldwide has allowed users to purchase bitcoins via exchanges with more ease.
After a purchase for bitcoins was made successful, users have the option to withdraw acquired bitcoins by sending them back to an exchanger like Bitstamp in return for cash.