How to Get Bitcoin: A Guide to Buying and Earning Crypto
While Bitcoin was once a tool available to only a tech literate few, widespread adoption over the last few years has made it easier than ever to get started with cryptocurrency. In this guide, we’ll introduce you to some of the easiest ways to get Bitcoin.
Buying crypto from centralized exchanges
Buying crypto—converting some of the dollars or euros in your bank account to Bitcoin or another digital currency—is probably the way most people take their first steps into crypto. And central exchanges are often regarded as the most beginner-friendly way to purchase crypto. Essentially, these exchanges serve as online vendors that allow you to easily buy Bitcoin instantly with debit cards, credit cards, or other convenient payment methods. In a sense, converting your fiat money to crypto on a centralized exchange is somewhat like shopping on Amazon.
These exchanges are run by businesses that facilitate the trades conducted on their platforms. In this sense, these exchanges function as middlemen in a way that is not dissimilar to the traditional platforms that many people use to purchase stocks. By design, centralized exchanges are often extremely user friendly and provide many avenues of support for customers who encounter issues along the way.
Many centralized cryptocurrency exchanges allow you to directly purchase crypto using your country’s local currency, assuming that doing so is allowed within your jurisdiction. In fact, one of the benefits of using centralized crypto exchanges is that they are often regional in nature, meaning they are typically well aware of and abide by the crypto rules of the regions they operate in. For instance, it is extremely easy to buy Bitcoin in the US, Canada, the EU, South Korea, and Japan using the US dollar, Canadian dollar, euro, South Korean won, and Japanese yen. Better still, such exchanges also know the payment methods their customers use most frequently, so each centralized exchange can offer flexible local payment methods. What's great about Invity's comparison tool is that we collect various centralized exchanges from all over the world, meaning you can see all the best crypto exchange rates and payment options available to you all in one place.
Importantly, there are two core types of centralized cryptocurrency exchanges: custodial and non-custodial platforms. Each option can significantly impact your crypto trading experience, so it’s worth learning the differences ahead of time.
Custodial exchanges are simple, but at a steep cost
Currently, custodial services make up the majority of online cryptocurrency exchanges. Put simply, when you purchase cryptocurrencies like Bitcoin on these exchanges, they store your digital assets in a cryptocurrency wallet on your behalf. Most often, they do so by creating an online wallet that you simply log into whenever you need to trade or transfer your funds. Yet to make the login and trading process faster and your account more recoverable should you lose access, these types of exchanges keep the keys to your wallet on their server. This is where the term "custodial" comes from: in this arrangement, the exchange has custody of your keys.
If you’ve read our previous guide to public and private keys, however, you’ll know that your private key is what gives you complete control over your funds. When you let someone else hold your keys for you, they’re completely in control of what happens to your Bitcoin.
The core critique of custodial cryptocurrency exchanges, then, lies in the fact that you have to trust that the business storing your funds has your best interests in mind. Many point out that this is largely antithetical to the purpose of the cryptocurrency movement, which is designed to empower users' control over their own funds rather than force them to rely on intermediaries. This critique is so commonplace among crypto proponents that the phrase "not your keys, not your coins" has become something of a guiding mantra.
While some of the biggest crypto exchanges—like Coinbase and Binance—are examples of custodial exchanges, the prevalence of scams, hacks, and security breaches over the last few years should be enough to make you wary of letting someone else hang on to your digital assets.
Non-custodial exchanges let you securely store your own crypto
Non-custodial exchanges, on the other hand, do not hold your keys or your crypto on your behalf. Instead, when you purchase a digital asset like Bitcoin from one of these exchanges, they process your payment and ensure that the crypto you buy is sent directly to your crypto wallet. The onus then lies on you to store and safeguard your funds appropriately.
As a result, non-custodial exchanges offer increased protection from external threats like an exchange falling victim to hackers. The only real downside with this option is that the experience can require more research on your behalf to find reputable providers with smooth service.
Luckily, all of Invity’s providers are non-custodial, making it easier than ever to purchase Bitcoin while having complete control of your private key and funds. What's more, Invity carefully vets all its providers and thoroughly tests their services, so you don't even need to trouble yourself with tracking down a reputable non-custodial exchange—they're all right here.
Trading Bitcoin on a decentralized exchanges (DEX)
Decentralized exchanges, referred to also by the initialism “DEX”, are platforms that allow you to purchase cryptocurrencies without a central party being involved. Unlike a centralized exchange, in which the company itself carries out the transactions, decentralized exchanges connect users to other users, who then trade crypto with one another directly.
In other words, DEX systems have no middleman, meaning your coins go only between yourself and the other party. Decentralized exchanges typically make use of open source programmed agreements, known as smart contracts, to let users conduct peer-to-peer trades amongst themselves.
Like non-custodial cryptocurrency exchanges, using a decentralized exchange will give you complete control over your Bitcoin and other digital assets. As a result, you’ll need to store your crypto in either a soft or hardware wallet. Typically, hardware cold storage wallets are considered the gold standard when it comes to keeping your crypto secure. Check out our guide to crypto wallets to learn more.
The downside when it comes to decentralized exchanges lies in the fact that they can be quite alienating for many users: often, you’ll need at least some level of technological proficiency in order to use a DEX without running into any issues. For users who overcome this learning curve, however, decentralized exchanges offer heightened privacy and often lower fees.
Using Bitcoin ATMs to buy crypto on the spot
Across the world, we’re seeing companies establish ATMs that allow people to directly buy Bitcoin and other popular cryptocurrencies. Unlike a traditional ATM, you do not need any kind of account to access these services.
Instead, Bitcoin ATMs simply serve as a way to trade crypto at a physical location. They allow you to purchase or sell Bitcoin at kiosks which, like traditional ATMs, are conveniently located in grocery stores, shopping malls, and countless other locations in cities and countries around the world. Unlike traditional money machines, however, Bitcoin ATMs take in your fiat cash rather than dispense it, instead converting your banknotes on the spot to Bitcoin or another crypto. This sense of familiarity and friendliness toward those with physical cash often makes Bitcoin ATMs a good way for the unbanked or those without internet access to get started with Bitcoin.
The best way to find a nearby Bitcoin ATM is to use Coinmap’s free interactive map of ATMs and crypto-friendly merchants. Since users across the world are constantly adding their own locations to this map, it’s a great way to find a place to buy crypto near you.
Earning crypto through credit card rewards
One lesser known method of getting cryptocurrencies is through rewards programs. Thanks to the increasing popularity of crypto credit cards, users are able to earn cashback in the form of Bitcoin and other prominent digital assets.
According to a report by Bankrate, the Upgrade Bitcoin Rewards Card became the first widely available card in the US that focuses on crypto rewards. It pays 1.5% back—in the form of Bitcoin—on all purchases. Bankrate further explains that major players like BlockFi and Gemini are launching similar offerings, giving people a way to get Bitcoin passively.
Getting paid in Bitcoin
Several forward-thinking companies across the world are becoming comfortable paying their employees and freelancers directly with cryptocurrencies like Bitcoin. Since Bitcoin transaction fees are the same regardless of the amount being sent, payroll can be more cost-effective to carry out with crypto than other popular alternatives, especially for large amounts or when workers are scattered across the globe.
Our very own SatoshiLabs Group in particular is more than happy to pay employees and freelancers with crypto. But they're not the only ones open to the idea: from fellow crypto companies to sports players (and entire franchises) to Twitter influencers, there is a growing list of organizations that pay out in Bitcoin or other crypto. So it's worth asking your own boss if they’d be open to the idea too. If they’re a little confused about how it works, feel free to point them towards any of our introductory guides.
How not to get Bitcoin
While it's easier than ever to buy Bitcoin instantly using a debit card or to even get paid in Bitcoin, it's important to remember that Bitcoin is money. And as such, there are very few ways to get Bitcoin for nothing. In fact, given that crypto is a relatively new and still evolving space for investments, the crypto space has something of a reputation for scams. So it's of vital importance to take your cybersecurity very seriously. Whether it's a supposed Bitcoin giveaway on Twitter, a personalized direct message, or a well-disguised but ultimately fake app, it's always important to give every crypto interaction a double-take and in general proceed with a healthy air of skepticism. And as in the offline world, if it sounds too good to be true, it probably is.
Regardless of the method you choose to use when it comes to getting Bitcoin, one thing is certain: doing so is easier than ever. In fact, it’s also easier than ever to learn about how Bitcoin and other cryptocurrencies work. Check out Invity’s blog, which features guides, explainers, and more so you feel ready to safely navigate the exciting world of crypto.