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How to buy Bitcoin with cash
There are a variety of different services that allow you to swap cash for Bitcoin. This guide will explain your options, and examine the pros and cons of making an investment this way.
Where can you buy Bitcoin with cash?
We’ve assembled a list of the best services that accept cash and will make the process as quick, simple, and inexpensive as possible.
What does it mean to buy Bitcoin with cash?
Unlike with a bank transfer when funds are sent electronically, when we talk about using cash we are referring to physical cash – the kind you can hold in your hand. The primary reason that someone might opt to use this method is to ensure anonymity and privacy.
How to deposit and withdraw via cash
If you’re using an exchange that accepts cash payments, like BitQuick, you can follow these steps:
- The seller places their Bitcoin into escrow.
- The buyer deposits their cash to make the purchase.
- To make that deposit, the buyer must go to the seller’s bank to deposit the cash.
- The buyer must then upload the bank receipt to confirm that the deposit has been made.
- The seller transfers the coins.
If you’re making a withdrawal via an exchange like BitQuick, the process is simply reversed, with the withdrawal still taking place at the bank.
What should I look for in a cash Bitcoin service?
Cash purchases are not done through brokers. Instead they’re done through exchanges, intermediaries, or Bitcoin ATMs. Therefore, what you need to look for will vary. Broadly speaking, though, here’s what you should consider.
- Lowest possible fees. If low fees are a key goal, you’ll want to avoid Bitcoin ATMs, which can charge fees of up to 10%.
- Speed. The plus side of Bitcoin ATMs is the speed with which you can withdraw your Bitcoin. On the other hand, intermediaries like LocalBitcoins and WallofCoins and exchanges like BitQuick require some matchmaking and transaction processing procedures that make the process take longer.
- Ease of use. Bitcoin ATMs are the easiest to use, but they’re not always easy to find and they’re expensive.
- High limits. Any cash Bitcoin service is going to limit the size purchase you can make. If you’re looking for a larger transaction, you’ll need to do your homework to find a service that provides a relatively high transaction limit.
- Not getting scammed. The anonymity and privacy comes with a dark side, which is that certain services put you at greater risk for scams. Make sure the service you use strikes the best possible balance between privacy and security.
Should I buy Bitcoin using cash?
- Privacy and anonymity. Using hard cash is the most discreet method there is. If you want to remain anonymous, this is the best route for you.
- Speed. If you can find a Bitcoin ATM near you, it’s much faster than, say, going through the verification process involved with a bank transfer.
- Easy to do (in some cases). If you can find a Bitcoin ATM, you’ll find that it’s about as easy a method as there is. (On the other hand, exchanges and intermediaries often required complicated processes to match up cash buyers, and sellers.)
Yes, you can. In fact, that’s generally the point. And often these transactions are either completely anonymous or require only minimal verification.
That depends on which service you use. A Bitcoin ATM takes just a few minutes. An exchange can take significantly longer, depending on how it takes to match you with a seller.
Not necessarily. Online brokers and exchanges will often allow you to store your coins in your account without the need to transfer to a personal wallet. However, this is less commonly found when you use cash, and many services will require you to enter an already existing wallet address to send the coins to – especially if you’re buying the coins directly from someone else on a peer-to-peer platform.
For a higher level of security, you should move any coins you’re not planning on selling or trading in the near future to an external wallet – ideally a hardware wallet.
Most of the time, no, though in certain cases the cost isn’t prohibitive. For instance, LibertyX operates a chain of retail stores in the United States that offers Bitcoin in-house. LibertyX charges a reasonable 1.5% fee, with certain promotional offers such as the first $1000 worth of Bitcoin being fee-free if you sign up with Facebook. That’s a lot lower than the high end of 10% at Bitcoin ATMs.
Yes, you can. Ethereum in particular is widely available in cash, whether at Ethereum ATMs or through peer-to-peer exchanges.
Not quite instantly, but you can get close if you use a Bitcoin ATM. Depending on the speed of the ATM you’re using, you could be able to complete it in just a few minutes.
If you’re using a peer-to-peer exchange, then the process will take longer as you’ll need to arrange the price with the seller and then deposit the money in cash.
In some ways, yes, in others, no. If there’s a Bitcoin ATM near you, then it’s quite easy. But if there isn’t, you may be forced to find a retail store (such as LibertyX) or complete a relatively complex transaction through a peer-to-peer network.
No, cash is not one of Coinbase’s accepted payment methods.
There’s no verification or ID required on a peer-to-peer exchange, so that’s a huge plus if you value anonymity. The biggest downside is that peer-to-peer exchanges are more vulnerable to fraud.
In major financial centres such as the United States and the UK, it’s relatively easy. Countries with emerging economies are less likely to offer many peer-to-peer exchanges.
It’s definitely a viable option if you want to test the waters with a smaller purchase. If you value privacy and anonymity above all else, cash is one of the best ways to make small moves.
No, it is not. The services you need to use don’t typically offer the option to make large moves. That’s before we even get to the logistical and security concerns of carrying around, say, £50,000 in your back pocket to make your purchase.
Fact-checking & references
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