A typical strategy for people new to Bitcoin is first acquiring a small amount of Bitcoin (sats) while learning more about what Bitcoin is, and later purchasing more once they have learned. This short article explores and compares the main methods to acquire Bitcoin. What are the main methods of acquiring Bitcoin? Which methods are most suitable for you?
The main methods of acquiring Bitcoin are to purchase it, earn it, or mine it.
For most people, simply purchasing Bitcoin is likely to be the easiest and most cost-effective way to acquire it. Typically this will involve a process of:
- Signing up with a Bitcoin exchange, Bitcoin buying service, or OTC (over-the-counter) desk
- Verifying identity (usually driver's license or passport)
- Depositing fiat funds (such as USD, EUR, GBP, AUD, etc.) – wire transfer or otherwise
- Purchasing Bitcoin
- Ideally, withdrawing the Bitcoin to your custody
- Look for a reputable Bitcoin exchange or Bitcoin purchase service. Ideally, it should have a good reputation for security and service built up over a long time.
- A convenient method or service type gaining popularity is known as DCA (Dollar Cost Average) or "stacking sats", where you set an automatic buy order on a daily, weekly, or monthly frequency.
- Importantly, select an exchange or service that permits you to purchase and withdraw the Bitcoin to private keys under your control. There are some services that simply provide "Bitcoin exposure" without any underlying control.
- For users wishing to purchase Bitcoin more privately, you may find it easier to buy Bitcoin in person at a local Bitcoin meetup. Many cities around the world offer these meetup groups.
It's also possible to earn Bitcoin:
- Working in a job that pays Bitcoin
- Selling products and services for Bitcoin
- Use "sats-back" (similar to cash-back) services such as Lolli or Fold that give you discounts or "Bitcoin back" for purchasing through their links or services
One benefit of earning Bitcoin is that, if done correctly, it can be more private than buying Bitcoin.
- Those looking for merchant processing for their online stores can look to Bitcoin merchant processing companies (such as Open Node, which will take BTC and payout fiat money if required).
- For a more self-sovereign method, you can use free and open-source tools like BTCPay Server that let you run your own web store to receive Bitcoin and generate "payment requests" to automatically request the correct amount of Bitcoin at current exchange rates.
Mining was much more feasible for individuals in the early days of Bitcoin. Nowadays, it usually requires millions of dollars in capital and investment. It typically requires the ability to source (or manufacture) specialist mining hardware, cheap energy prices, and an operations team to maintain the equipment.
Mining is arguably the most private way to acquire Bitcoin.
There have historically been many mining-based scams that promise fantastic returns or hardware that is "too good to be true". Remain skeptical with anyone who promises very high mining returns.
Source: Saylor Academy
This work is licensed under a Creative Commons Attribution 4.0 License.