You keep hearing about it, but what exactly is bitcoin and how do you buy it? Read on for finder.com.au’s definitive guide.
There are two main ways to buy bitcoin in Australia.
Use a bitcoin broker. This is probably the easiest way to buy bitcoin. If you just want to get it done quickly and easily, and have no plans to become a cryptocurrency trader, then this might be the way to go. The downside is that convenience comes at a cost, and you pay a bit more for the brokerage services.
Buy from an exchange. Cryptocurrencies like bitcoin are traded on exchanges. If you want to buy bitcoin as cost-effectively as possible, or plan on doing more trading in future, then choosing a reliable exchange might be what you want to do.
Want to do it as fast as possible? You might be able to go from zero to bitcoin in less than an hour.
Get a wallet. This can be done as easily as downloading it to your computer or phone.
Use a no-verification-required bitcoin service, such as LocalBitcoins.
You need to make sure it’s a reliable and trustworthy though. Even if you’re in a rush, it’s worth taking the time to pick out a reputable seller.
How to begin and what to do first
Before getting started you need a place to put your bitcoin. That means either getting a wallet, or looking for a broker/exchange that offers you a wallet as part of its service.
Cryptocurrency wallets in Australia: How to choose
If you’re a cryptocurrency beginner, there are probably three basic types of wallets you might consider.
Desktop - Simple, secure, easy to use and popular, this wallet is in the form of a program you download to your computer. It’s quick and easy, but you want to be sure that your computer is free of viruses or malware.
Smartphone - The same as above, but it’s an app for your phone instead.
Hardware - An option for holding your currency securely offline in a more physical form. These wallets are like USBs or hard drives that hold your cryptocurrency.
You can compare hardware wallets here. They are usually a good combination of security and familiarity for anyone who’s not entirely confident with new technology, and they can also be a good physical backup to have on hand.
Where and how to buy bitcoin
Decide whether you’re happy to pay premium prices for a reliable bitcoin seller, or if you’re happy to go on the exchanges and hunt for a bargain instead.
To pick one you should look at:
Whether they are exchanges or buying/selling services. At an exchange you’ll be trading with other users, while a buying/selling service, or broker, can simply sell you bitcoin.
Accepted payment methods. POLi lets you make quick and free bank transfers, and is one of the most widely accepted payment methods when buying bitcoin in Australia. If that suits you, then most providers can offer it. If you’re looking for alternatives such as paying with cash, BPAY, credit card or PayPal, you might have to search more widely.
Whether you need your own wallet. If you have your own wallet then you don’t need to worry about it. If you don’t, then you might want to start with a provider that offers its own in-built wallet.
Whether they require verification. Most reputable services will require you to verify your identity, but some will still let you conduct smaller transfers without verifying your identity. Verification can take a day or two, so if you’re in a hurry or want to transact anonymously, you might want to look for the no-verification providers. Otherwise, simply be ready to provide some identification after signup.
We’ve assembled here a list of some legitimate services for your consideration. All you have to do is pick one that suits your needs, follow the steps provided and transfer some Australian dollars, other supported fiat currency, or cryptocurrency for bitcoin.
There isn’t a catch. Now that cryptocurrencies have been around for a while, you can simply buy bitcoin almost like anything else. It really is as easy as that.
But make sure you’re using a well-known and reputable provider. Just like any other business, there will always be some shady operators.
How to get bitcoin without buying it
There are other ways to get bitcoin as well.
The main ones are:
Charge bitcoin for goods and services. You can request payment in bitcoin instead of AUD.
If you’re interested in playing the market and getting more involved in cryptocurrencies, then the exchanges, rather than the brokers, might be where you want to be.
You’ll find brokers willing to buy bitcoin from you, but typically you’ll probably be able to find better prices by selling to other users on an exchange instead.
A full-feature exchange that lets you set limit orders, and do more all round than simply trade at current market value can be exceptionally useful with an asset as volatile as bitcoin.
What’s the cheapest way to buy bitcoin?
The cheapest way is probably to charge bitcoin for goods or services, or receive bitcoin donations. But the most cost-effective way to buy bitcoin might be to purchase from an exchange during a slump in the market.
What’s the quickest way to buy bitcoin?
The fastest way is probably to use a service like buyabitcoin.com.au that doesn’t require verification.
On platforms like this, people can buy the equivalent of up to AU$9,000 in bitcoin as easily as entering their email address, their wallet info and transferring funds.
And getting a wallet can be as quick as going online and downloading one.
What’s the easiest way to buy bitcoin?
The easiest way to buy bitcoin in Australia is probably to use a reliable and simple bitcoin broker service. Some will even let you pay cash over the counter in a bank, or at a Smart ATM.
For users, bitcoin works the same as any other currency. Just like using your credit card or making a transfer for an international transaction, using a bitcoin exchange allows you to send a certain currency digitally to someone else. Bitcoin.com gives each user a digital wallet to store, send and receive bitcoin.
The bitcoin network works by using a public ledger called the blockchain. This ledger contains all processed transactions and is used to check a transaction’s validity by using digital signatures.
The value of bitcoin is established much the same as any other currency, with the exact value depending on the number of people using bitcoin and the number of bitcoin in circulation. The value of bitcoin can also be affected by relatively small events, trades or business activities.
Historical rate chart of BTC and AUD
= 0Updated: 22 Nov 2017 17:47:49 UTC
Who uses bitcoin?
Although it’s a digital currency, a wide range of businesses who exist both online and offline use and accept bitcoin. Bitcoin can be used to make payments online and in physical stores and any user can make these payments as long as they have the recipient's address. There is also no need for a merchant account to be set up in order to receive payments.
Shirley is finder.com.au's publisher for banking and investments. She has completed a Masters in Commerce (Finance) and is the author of hundreds of articles. She is passionate about helping Aussies make an informed decision, save money and find the best deal for their needs.
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