Jun 3, 2024 2 min read FAQ

How to Buy Bitcoin

There are only so many ways to obtain bitcoins.

You can buy bitcoins from someone else, you can mine bitcoins, you can earn bitcoins, or you can steal bitcoins (highly discouraged).

This will talk about how to buy them.

There are several options to buy (and hopefully not sell) Bitcoin.

1) The most trivial and best for privacy would be an "in-person" exchange.

This would be another person willing to accept cash, gold, a cow, or some other asset in exchange for sending bitcoins to an address you control.

Just make sure if you found someone on Craiglist to not get wrenched at the meetup.

2) Purchase bitcoins online via peer-to-peer.

This would be similar to option 1, except it is facilitated through online software that does not need to know who the participants are (no need to send in a picture of ID)

Examples of peer-to-peer Bitcoin exchanges include Bisq, Hodl Hodl, and RoboSats.

3) Purchase bitcoins from a Bitcoin ATM.

This is a mix of option 1 and option 2. An ATM facilitates this trade, although at a hefty fee.

If you go this route, you will likely pay a minimum 15% transaction fee.

Options 1-3 are all non-KYC (know-your-customer), meaning there is no record of your identity associated with the bitcoin transaction.

Non-KYC bitcoins have the best privacy (never mix non-KYC coins with KYC coins as this reveals the owner of all the coins).

4) Purchase bitcoins through an exchange.

This is the most common option and in most cases the easiest.

This is when a 3rd party (the exchange) matches a buyer (you) with a seller (someone else), and executes a trade on the back end and updates balances.

There are a few important factors to consider in this method.

Most exchanges require KYC.

Meaning they need to know the customer they are serving.

Any bitcoins obtained through this method can be traced back to you.

You are not in control of your coins on an exchange

When you use an exchange, the service they provide you is liquidity, i.e., the ability to move coins around easily.

This convenience comes at a cost. You do not hold the keys to custody of the coins; the exchange does. So, if they go bust (FTX), you could lose any coins you had with the exchange.

The solution is not to keep an amount you are uncomfortable potentially losing on an exchange.

Want to know an easy way to tell if you are in custody of your coins?

If you have the 12-24 seed words. An exchange will not give you those.

At Simple Mining, we recommend using our trusted partner, River. Don't use Coinbase unless you want to be bombarded with casino coins.

Boom.

Now you know where to buy Bitcoins: