Buying and selling bitcoins can be done in different ways and knowing their differences can be helpful. Below is a brief explanation of the most common options.
Buy and Sell Bitcoins Through a Bitcoin Exchange
These are websites that deal with buying and selling of bitcoins, what we call an online exchange. This is by far the easiest way to buy and sell bitcoins.
You must create an account and verify your identity before you can buy and sell using these exchanges. Your bitcoin is sent to your bitcoin wallet immediately after you make a purchase.
When selling your bitcoin for fiat money, you are usually credited within 24 hours. This differs per provider, though.
Buying and selling over a currency exchange are not the cheapest options; this has to do with the fact that the exchanges charge a fee by keeping a percentage on all purchased/sold bitcoins.
Buy and Sell Bitcoin Through a Bitcoin Market Place
You can buy and sell bitcoin via a bitcoin marketplace. Here you offer just as in a normal market your bitcoins to other people that want to buy.
Note that in this case, the exchange does not buy or sell bitcoins but only provides a platform for users to trade among themselves.
The advantage of using a Bitcoin marketplace is the reduced cost of the transaction, while the downside is that it is much more time consuming and requires some technical understanding.
Before you can trade on a marketplace exchange, you must also verify your identity, for example by showing a passport or driving license.
Buy and Sell Bitcoins from Person to Person
To buy and sell Bitcoins you obviously do not necessarily need a marketplace exchange or currency exchange, you can simply buy them from other Bitcoin users.
For example, you can place an advert, hang a note on a grocery store or advertise on sites like bitcointalk.org
Hanging of notes and other local adverts obviously are not very efficient ways to buy and sell bitcoin from person to person.
Websites like Bitcoin-otc.com and localbitcoins.com can facilitate peer-to-peer bitcoin transactions.These sites make it possible to advertise yourself as a bitcoin buyer/seller and you can find other people as well.
Off course, you will want to buy from people that have high positive reviews based on their previous transaction records to avoid any kind of scam.
You can also do a local search on a map on these sites to locate traders in your neighborhood and they provide an escrow feature to hold your bitcoins during the transaction process for safety.
You can use the above three methods to buy and sell bitcoins easily. Got any question or comment to share? Let’s discuss in the comment section below and I will surely give you a reply.