Wie kann ich Bitcoins kaufen und verkaufen?

In part 7 of the Bitcoin Basics series, we looked at how much Bitcoin is worth . In this article, we want to explain how to buy and sell  Bitcoins .

Because Bitcoin has only recently risen to prominence and is backed only by technology (mathematical proofs) and not by other assets, the process of buying and selling Bitcoin often seems difficult and complicated for investors. 

But it doesn’t have to be that way. Similar to other flat currencies, you can receive Bitcoin as a means of payment for services or goods, receive it as a gift, or purchase it yourself through a barter transaction or deposit service of your choice.

Before purchasing Bitcoins (or any other digital currency), you should familiarize yourself with the tax laws and regulations in your country. As we noted in the article “Is Bitcoin Legal?”, nations around the world have taken a nuanced stance on cryptocurrencies . Some states are showing signs of approval while others are threatening to regulate or, worse, ban the currencies altogether. Therefore, your decision to purchase Bitcoins may result in taxes, legal regulations or other applicable regulations. You should be fully informed about this before making any decision. 

Where to buy and sell Bitcoins 

There are many ways to buy or sell Bitcoins. Although this obviously varies from country to country, in some countries it is relatively easy to access the digital currency, for example in exchange for flat currencies such as the dollar. But Bitcoins can also be used at some ATMs and in person-to-person transactions.

Change cryptocurrency

Most investors want to buy Bitcoin as part of an exchange where they can swap flat currencies for Bitcoin. This is usually done at an exchange rate that may already include the fees due for exchanging currency. 

There are many different online exchanges around the world, available in different regions and accepting a variety of currencies. Usually, online exchanges are subject to government laws and must always meet two important criteria. Firstly, “anti-money laundering” (which is designed to prevent criminal services from appearing legitimate) and “know your customer” (which guarantees that traders must register for proof of identity.)

Therefore, most marketplaces require the trader to link their private bank account (from which flat currencies can be sent and received) and provide documents to prove their identity before trading is possible.

Marketplaces around the world have different requirements for trading permission, transaction fees, limits and flat currencies accepted. 

Bitcoin person-to-person transactions

If you prefer not to use an online marketplace, you can always get Bitcoin through a so-called person-to-person transaction. This involves a buyer providing a flat currency or other commodity, after which the seller sends the agreed amount in Bitcoins to the respective buyer.

It is important to understand that Bitcoin does not operate with the backing of any central bank or other authority. This means that all transactions are exclusively between two parties. These transactions take around 15 minutes to become valid and cannot be automatically reversed. If you wish to make a return, you would be dependent on the goodwill of the other party to comply with your request. 

Person-to-person transactions can take place in a variety of ways. The most common method is for a recipient to provide the public key of their Bitcoin wallet or key chain, and a sender then sends the Bitcoins to that address. After a waiting period, usually 15 minutes, the transaction is confirmed and the transfer is reflected in both parties’ wallets and in the blockchain.

There are also other person-to-person parties and platforms. Since transferring bitcoins requires trust, there are also cryptocurrency transactions where the two parties have met face-to-face to complete the transaction either as a person or as a group.

There are now some services that want to further simplify these transactions and help to ensure more trust. This is done by depositing funds until the transaction is completed.

The price to purchase a Bitcoin in this way can vary. Some sellers may charge a fee for this kind of privacy and convenience, in addition to the advertised prices. Sometimes this fee is also decided in a prior meeting.

Bitcoin ATMs.

A relatively new way to buy Bitcoins is to use an ATM, which may already be available in your hometown. 

Bitcoin ATMs typically charge a processing fee of between three and eight percent over the traditional exchange rate. While this may be expensive, ATMs usually offer the most privacy when purchasing Bitcoin.

To use a Bitcoin ATM, users typically insert either cash or a debit/credit card into the machine and scan a QR code that is on a mobile wallet or smartphone. The ATM then prints out a paper receipt that contains codes and instructions on how the new owner of the Bitcoins can get them into their mobile wallet. 

How does Bitcoin trading work

Bitcoin trading usually takes place on a marketplace, which is a platform where traders can place orders to buy or sell bitcoins at a specific price.

Exchanges typically list a high and low price for Bitcoin or another cryptocurrency, indicating either the highest or lowest price for which a whole Bitcoin was sold within the last 24 hours.

For an exchange, traders either signal their willingness to “buy” or “sell”. The trader can also specify how many Bitcoins one wants to buy or sell and at what price in flat currencies one wants to do so.

There are two types of orders: limit orders and market orders.

Limit orders allow traders to set their own price for Bitcoins, whether above or below the accepted market price. The interested seller can accept these orders if they want to. The decision to do so is entirely up to the seller. 

Market orders allow traders to quickly purchase a specific amount of bitcoins from the best matching order – meaning the buyer is effectively buying the bitcoins at the current price at the time of the trade.

When a merchant confirms one of these orders, the transaction is requested and once it is “mined” (which usually takes about 15 minutes, depending on how many unverified transactions are still on the blockchain) the purchased bitcoins are transferred from one party to another. 

Purchased Bitcoins remain on the marketplace until traders decide to transfer the amounts to a Bitcoin wallet or keychain. 

It is important to note that the security of these transactions varies, making them a popular target for hackers to steal bitcoins. Therefore, you should always use a strong password and secure your account with two-step authentication.

In part nine of our Bitcoin Basics series, we take a closer look at how to secure and store Bitcoins .