Bitcoin 101

How to buy bitcoin: A simple guide

The advantages of bitcoin for gambling

Before we dive into the process of how to buy bitcoin, it is worth a quick reminder of the advantages it has for gamblers over traditional methods for funding a betting account. If you want an introduction as to what bitcoin is, read this article first then return here.

Bitcoin is revolutionary in its ability to maintain an accurate record of ownership and transactions without a central party - like a bank - and has a number of unique characteristics that make especially suited for gambling.

Low Fees

Transferring bitcoin into a sportsbook like Cloudbet is very inexpensive by comparison to traditional methods of funding a betting account.

Fast & Transparent

Not only is it cheap to transfer bitcoin, it is also relatively fast compared to many of standard payment methods offered by traditional bookmakers. It is also fully transparent, allowing you to track the status of your deposit or withdrawal in a way that regular payment processors simply cannot match.

Anonymous

One of the main reasons why bitcoin is so perfect for gambling is that it cuts down on the amount of personal information that needs to be shared. To fund a bitcoin betting account you just need a bitcoin wallet address which is a string of code that is untraceable to you.

Secure

One of the most elegant characteristics of Bitcoin is that its units cannot be spent twice, nor can they be counterfeited - a major drawback with physical money. 

Where to buy bitcoin - An Exchange

Bitcoin exchanges are the most common way to buy bitcoin. They function by facilitating the exchange of bitcoin (and other cryptocurrencies) between a buyer and a seller, taking a commission for the service (which importantly can vary  a great deal in size). You may already be familiar with betting exchanges which function in a similar bringing together a backer (someone wanting to bet) and a layer (someone wanting to take a bet).

Using an exchange is a relatively easy way to obtain bitcoin. To purchase bitcoin from an exchange with regular (fiat - USD, Euro etc) money you need to create an account with an exchange that accepts a method of payment (cash, credit card or PayPal) convenient for you, while also taking into consideration the deposit and trading commission charged (as a % of the amount of bitcoin purchased) and the process required to verify your account. 

How to buy bitcoin from Bitstamp

We suggest you use Bitstamp because their commissions are very low and they are one of the established exchanges, fully licensed and regulated. They charge a deposit fee of only 0.05% compared to 4% or higher elsewhere while the most you'll pay for trading is 0.25%.

Once you have created your Bitstamp account, and deposited your fiat money you are in a position to purchase bitcoin at the available exchange rate relevant to your currency - USD, Euro etc. You will get charged a small commission - calculated as percentage of the transaction - to purchase bitcoin; the same is true when selling, so always keep these fees in mind.

Bitcoin exchanges are the most common way to buy bitcoin. They function by facilitating the exchange of bitcoin (and other cryptocurrencies) between a buyer and a seller

Bitcoin exchanges are the most common way to buy bitcoin. They function by facilitating the exchange of bitcoin (and other cryptocurrencies) between a buyer and a seller.

Bitstamp offers a wide range of methods including local and international bank transfer and credit card. The time to process your deposit will vary depending on which method chosen, and there will be varying fees that you should pay close attention to.

Once the exchange has happened, you will be the proud owner of bitcoin which will be stored in your online wallet on Bitstamp. A wallet is where you store and manage your bitcoins - very similar to a bank account. Every wallet has an address which looks something like this 'A34se3rt5E65YUE5r290tgfQWC9urTVB9dieo0'. 

Cloudbet has a wallet address that you can use to send your newly purchased bitcoin to fund your account and start betting. Follow this link to know more about bitcoin wallets and how they work.

Where to buy bitcoin - Over the counter 

The alternative to buying bitcoin from an exchange, where the platform seamlessly facilitates your request to purchase from a willing seller, is to use what is called an Over the Counter service - often abbreviated to OTC.

An OTC service will put you directly in touch with a broker who is willing to sell you bitcoin directly. The most well known, and one that Cloudbet recommends, is Localbitcoins.

How to buy bitcoin from Localbitcoins

Localbitcoins has the most extensive options for buying bitcoins. They offer Bank Transfers, Online wallets, Paypal, Prepaid debit cards, Cash by Mail, Transferwise and a host of other payments. 

Purchasing bitcoin here is simple and straightforward. You need to register an account, which gives you a bitcoin wallet. Ensure that you take advantage of two-factor authentication for security, choose your preferred region/currency then navigate to the main menu where you will find different sellers offering bitcoin at slightly different prices which will vary in relation to the payment method offered.

Though price is a key consideration, you will need to consider the payment method offered - by paying in cash for example you’ll get better price but this isn't the most convenient. Reputation and trade history is also critical, as you need to pick a seller that you're comfortable with.

Blockchain for beginners

Once you’ve deposited your funds and chosen a seller, you simply send a chat request to but bitcoin. The service is clever enough to hold your payment until the seller has released the bitcoins, which will then show up in your Localbitcoins wallet. When you are satisfied that the bitcoin has been received, you release your payment funds and the purchase is complete. 

Five Step Summary

Hopefully by now you have mastered the benefits of how to buy bitcoin, but our infographic here lays out the five basics stepped that are involved.

Once you own bitcoin you can simply hold on to your bitcoin - it is a great store of value - trade them for another cryptocurrency, send to your personal bitcoin wallet or any other wallet holder anywhere in the world.

Alternatively, you could open a CloudBet account and send your funds to our deposit wallet and in no time at all be  betting on a huge range of sports markets or playing in our exciting bitcoin casino where your initial investment could turn into something much greater.


About the Author
Cloudbet

Cloudbet

Cloudbet

Posted on 2018-05-02

Cloudbet has a team of contributors that produce high quality content across a range of subjects related to betting and crypto.

Related Articles

What Can I Bet On With Bitcoin?

Bitcoin 101

What Can I Bet On With Bitcoin?

Bitcoin Language Defined

Bitcoin 101

Bitcoin Language Defined

How to deposit bitcoin at Cloudbet

Bitcoin 101

How to deposit bitcoin at Cloudbet