I’ve been impressing people with Bitcoin lately. Being the romantic that I am, I gave my wife 0.1 BTC as a wedding anniversary present back in June (see transaction). She assures me she was very impressed. In late November, I told my brother-in-law and business partner: “You bring the takeaway to my place and I’ll pay half with bitcoins”. He assures me he was also very impressed.
The reason you can still impress wives with Bitcoin (trust me) is that it isn’t mainstream yet. As much hype as there is about the new technology, getting your hands on the electric coins is anything but straight forward (unless you live in the US, where you can use Coinbase). And if you live in currency-controlled Iceland trading bitcoins for the hated Krona is probably down right illegal.
So how do you buy bitcoins?
First: Transfer your currency of choice to an exchange. In my case it was BitStamp, which meant I had to send US dollars via a bank transfer to BitStamp’s bank account in Slovenia.
Second: Once the exchange has processed your deposit, which can take a few days, you have dollars in their account. Now you have to buy bitcoins. The easiest option is to make an “instant order” which means you buy bitcoins for the current market price. They might come from a single seller or multiple sellers, depending on how much you’re buying. You don’t need to worry about the technicalities though, the exchange does this for you. The Bitcoin exchange is simply a match maker that charges a fee for every transaction they process.
Third: Now that you have your precious bitcoins, it’s best to transfer them to a wallet. I use Coinbase but other popular options include the Bitcoin client for Android and the Blockchain Wallet. Once you’ve transferred your coins to a wallet, you can start trying to impress people by sending them coins. Or you could just hold on to them, cross your fingers and hope the price takes another upwards swing.
Finally, watch the price fluctuate wildly: The graph below shows the price of bitcoin in US dollars over the past year. My wedding anniversary present is becoming ever more generous while my brother-in-law lost out by accepting bitcoin as a payment for the takeaway, although I’m not sure he would have been better off with the Icelandic Krona. Not in the long run, anyway. But that’s a different story.
