Buying Bitcoin with a credit card is a very risky thing to do. There are many reasons for this, but here are the main ones:
People might find out that you bought Bitcoin with a credit card and start asking questions.
Because your use of Bitcoin is likely to be associated with your credit card billing address, many people will associate your purchases with you and track you down.
Bitcoin transactions are not reversible; if you buy Bitcoin and then decide you don’t want it, there’s no way to get it back without completely ruining your credit rating.
Bitcoin can be stolen from your computer or mobile device while they are being processed. This is done by installing malware on your computer or mobile device. It’s very easy to install malware; just visit a site offering malware, wait while someone downloads it, and then take the thing out of quarantine.
Bitcoin is not the only cryptocurrency, but it’s the one that has become so popular in recent years that people started to wonder whether it was a bubble, or if it had reached some new kind of plateau.
Bitcoin is deflationary—its price goes up and down, but not by much. It will never be worth more than $1 million, and in theory you could buy a million Bitcoins for as little as $20. But if you want to buy Bitcoin with a credit card, you’re going to pay a premium: right now the most popular exchange charges a 1% fee on all purchases.
Most of the other cryptocurrencies do not have this fee. Some, such as Litecoin and Dogecoin, are even less expensive; they don’t require any fees at all. That makes them look like they might be better deals than Bitcoin. But they’re not; if bitcoin is an expensive luxury good and other cryptocurrencies are cheap mass-market products that you can buy with a credit card, then bitcoin is clearly the better deal.
As I say at the end of my blog post about why Bitcoin isn’t for everyone: “I don’t believe in making bad decisions to avoid making good ones. But sometimes there are reasons why it’s a good idea.”
Cards are not the only way to buy bitcoins. You can also use PayPal, Dwolla, and many other methods. But there is one that I recommend above all: LocalBitcoins.com. It’s the easiest way to buy bitcoins with cash, and it’s the cheapest method of all.
LocalBitcoins is an online marketplace where people trade bitcoins for cash. You can buy bitcoins with a credit card or cash-in-hand. It’s anonymous, which makes it safer than using your bank account, but it’s also legal in most countries, so you don’t have to worry about being arrested for buying bitcoins with a credit card in your home country.
The main advantage of LocalBitcoins is that it’s the easiest way to buy bitcoins with cash without paying any fees whatsoever. The only fees you’ll pay are when you sell your bitcoins for cash-in-hand, but you won’t pay any fees when buying them unless you use a credit card (which will often incur a 3% fee).
Bitcoin is the first example of a cryptocurrency, which is a decentralized peer-to-peer currency….
Not surprisingly, there are many arguments in favor of Bitcoin. One of them is that it’s the easiest way to buy it. In some places in the world, Bitcoin can be bought with cash, but you can’t buy it with a credit card. And not only can you buy it with a credit card in those places, you can use up to $10,000 worth at once. That’s like taking a big check from several people at once and spending it all on a single thing.
This is not necessarily a big deal for foreign expats who need to conduct large transactions quickly, as long as they don’t get overwhelmed by their debt—the prices are high enough that even in the long run they might be able to pay it off. But if you’re trying to live on $10,000 per year, which should be possible for most people without a major debt burden, this makes things difficult.
Many people have heard that Bitcoin is the cheapest cryptocurrency on the market, and they’re right. But that’s not because it costs the least to use. It costs the least to use because it’s the least secure. The only reason you should choose Bitcoin over some other cryptocurrency is if you believe that security is more important than convenience.
Bitcoin is a kind of cryptocurrency, which means it’s a decentralized form of money that you can use to pay people online without involving banks or other third parties.
The attraction of decentralized payment systems is that you cut out the middleman. There are many forms of money, and some are better than others. But all the forms of money we have today have an important drawback: their value is not stable.
If you have money today, you can spend it tomorrow, but if you don’t, it will be worth less tomorrow. In most cases that difference won’t be very large, but sometimes it will be huge. People who know about economics, like economists, call this inflation and worry about it as though it’s some kind of new disease that has just broken out in the economy.
Most forms of money are also vulnerable to bank runs. If everyone suddenly wanted to take their money out at once, the bank might find itself insolvent and unable to pay everyone back. Sometimes a bank run can cause a currency to collapse completely; sometimes people pretend they want to withdraw their deposits while they really want the currency itself. Either way the result is a currency crash and its associated economic problems: deflation (lower prices), unemployment (people who would otherwise be working aren’t
The simplest thing to understand about Bitcoin is that it’s digital money. (Technically, it is the ledger for a global network of computers that collectively keeps a record of every Bitcoin transaction since its first use in 2009.) It’s important to understand this because most discussions about Bitcoin tend to focus on whether or not it’s a bubble.
The only way that much money can be flowing into an asset class is if people expect its price to rise. If you’re going to ask whether it’s a bubble, you have to ask why they think it will rise. And one of the best ways to answer this question is to look at the history of other similar assets: gold, silver coins, etc.
This has become a bit of a topic of controversy lately, so let me address some of those arguments:
1) Gold and silver are real, the stuff you can hold in your hand and see. Bitcoin is fictional, computer-generated money. Therefore gold and silver are more reliable than Bitcoin! This argument has two flaws: first, as with most things, fiction gets more reliable over time; second, as with most things also fictional currency gets less reliable over time.
Take real estate. There was once a period when real estate was considered by many people to