Where To Buy Bitcoin

Reliable Bitcoin Exchanges

There are so many reputable Bitcoin exchanges like Coinbase, Bittrex, Kraken, Bitstamp, etc. in the US and many others in other countries that have been in business for a reasonable amount of time. These are some leading names in the Bitcoin economy and have earned a level of trust.  However, it is your personal decision but this article should help you with your decisions.

Bitcoin may not be easily available as there are certain restrictions in the US and several other countries on the amount you can buy.

CryptoCurrency Exchange Laws

There are 2 laws that USA based cryptocurrency exchanges need to comply with as discussed below

Anti-Money Laundering (ATM)

As part of the Patriot Act, new rules to detect and prosecute international money-laundering operations were created. Financial institutions fall under these rules and in this case it affects the cryptocurrency exchanges. They are responsible for following these laws which typically means they must have limits on the amount of money that can be exchanged.

Another important part of the ATM operations is the Know Your Customer or KYC as discussed below.

Know Your Customer (KYC)

This is the process that a business uses to verify the identity of a customer. In the case of a person who wants to buy or sell bitcoin and then exchange that for cash, they will need to verify their identity with a drivers license or passport.

More information is available about Know Your Customer on Wikipedia.

For further information on the Anti Money Laundering act take a look at the US Commodities Futures Trading Commission page.

What does this mean for you and me?

It means that in order to buy or sell bitcoin through an exchange, you’ll need to show some type of identification such as a drivers license or passport.

In addition there will be limits on how much you can purchase or sell at a time.

Exchanges

Enough of the overview, what are the reliable exchanges?

Coinbase

Probably the most well-known Bitcoin exchange in the United States, this exchange is located in San Francisco, CA.

Pros

  • Lots of Investment – Coinbase has raised $100 million in venture capital.
  • Lots of Press and Scrutiny – Coinbase seems to be in the news a lot in both a positive and negative way.
    • In a positive way as far as the number of new accounts.
    • In a negative way because of long wait times or shutdown of trading.
  • Can pay with credit card or link a bank account
  • Can buy or sell using limits with their GDAX arm which has an stock trading dashboard feel.

Cons

  • Reports of long wait times for buying or selling of cryptos.
  • Only supports 3 cryptocurrencies right now – Bitcoin, Ethereum, and Litecoin. They claim support for BitcoinCash at the beginning of 2018.

Kraken

Another well-known Bitcoin exchange in the United States, this exchange is also located in San Francisco, CA. Kraken has been around since 2011.

Pros

  • Staying Power – Kraken has been around for almost 7 years.
  • Lots of Press and Scrutiny – Kraken seems to be in the news a lot in both a positive and negative way.
    • In a positive way as far as the number of accounts.
    • In a negative way because of long wait times or shutdown of trading.
  • Can trade many different cryptocurrencies without linking to a bank account
  • Tiered access system
    • Different tiers require more identity verification but result in higher money limits.
  • Multiple levels of security
    • Two factor authentication to login
    • Addresses are verified through email before a transfer can take place out of Kraken.

Cons

  • Reports of long wait times for buying or selling of cryptos.
  • Reports of login errors (Cloudflare errors) when logging in and placing orders.
  • Daily and monthly limits on deposits and withdrawals.
  • Withdrawal is cumbersome since each bitcoin address needs to be verified through email.

Bittrex

Another well-known Bitcoin exchange in the United States, this exchange is located in Seattle, WA. Bittrex has been around since 2014.

Pros

  • Best Dashboard (in my opinion)
  • Can trade many different cryptocurrencies without linking to a bank account
  • Intuitive cryptocurrency transfers
    • Press + to add more to your account (deposit), press – to withdraw.
  • Multiple levels of security
    • Two factor authentication to login
  • Large variety of altcoins.

Cons

  • Reports of long wait times for buying or selling of cryptos.