Your first purchase of Bitcoins might take awhile, and the purchase price of Bitcoins in dollars can fluctuate wildly while you're setting up the transaction.
I wanted Bitcoins. To be more precise: I wanted some portion of one Bitcoin, since one whole Bitcoin fetched several hundred U.S. dollars when I set out to make an exchange.
Bitcoin is a digital (or "virtual", or "crypto") currency. Once all Bitcoins have been digitally "mined," there will be 21 million Bitcoins in circulation. Its viability stems from it being the first widely recognized digital currency, and from its continued adoption across markets. Just like the dollar, people are giving Bitcoin its credibility. What it derives its value from, however, is a topic of some debate.
It was the morning of December 8th and the dollar value of a Bitcoin was $768. Fortunately, I didn't have to buy a whole Bitcoin; Bitcoin transactions can be made that are several decimal places smaller than 1. On December 7th, the price of Bitcoin was over $1000. Based on my observations, I thought the value was likely to rebound, so it seemed like the right time to buy.
I started with Coinbase,a well-known San Francisco-based Bitcoin startup company. I had heard Coinbase could help me purchase Bitcoins, and convert them to dollars when I wanted that to happen. After signing up for an account, I immediately met with my first obstacle. Coinbase's primary way of funding your account and sending you dollars is to connect to your bank account. I don't want the various unknown systems of the Bitcoin ecosystem to know about my primary bank account. I decided I was going to have to open a secondary account.
New bank accounts are easy these days. Lots of companies make opening a new account through their website simple, as long as you're willing to forego having a brick-and-mortar presence to visit. Since I'm dealing with virtual currency, virtual banking doesn't phase me. So, later that night, I chose my new bank and signed up. I funded my new account with $50 which, I was told, would take a couple of days to arrive. The value of Bitcoin continues to decrease (down to $740), so I shrugged it off, and waited.
From December 10th to the 11th, the value of Bitcoin exploded again, up to $981, and I was left feeling dejected and left-out. But my troubles had only begun; I logged in to my new bank account on the 13th only to find the transfer of my $50 had completed, but had merely triggered another 10-day waiting period before I would be allowed to withdraw or transfer that money. That meant it'd be nearly Christmas before I'd be able to purchase any Bitcoins. Frustrated and discouraged to watch the value of Bitcoins continue fluctuate, I resigned myself to this fate. Bitcoins were trading at $885.
The week before Christmas saw Coinbase fall under a cloud of criticism, when money and orders for Bitcoin went "on hold" for no explained reason, transactions were seemingly randomly cancelled and people were all-around freaking out. If you paid for 10 Bitcoins at $900 each, but only received those Bitcoins days later when their value had plummeted to $550, you would probably be upset as well. As I watched reports of major problems with Coinbase flood in, and watched Coinbase send their employees out with no answer besides, essentially, "why can't you sympathize with our plight of taking all your money and not having sufficient staff to do what we said we would do with it," I started having second thoughts. Given the large sums of money that can be involved in a Coinbase transaction, I was no longer confident that Coinbase was the best way for me to purchase any Bitcoin, even the small amount I was considering. It was December 18th, and the value of Bitcoins had fallen off a cliff - they were trading at $420.
So over the weekend before Christmas I looked into alternative ideas. I opened a Blockchain wallet, but Blockchain wallets are simply repositories for Bitcoins; they don't help you obtain them or convert them to dollars (Bitcoin value: now $615). I joined the CampBX exchange, where Bitcoins are exchanged for any number of official currencies, only to discover that the only way to affordably fund my CampBX account was to mail a paper USPS money order to an address in Atlanta. Aside from the absurdity of using a money-transfer system from the 1800s to get Bitcoin , I'm not comfortable with sending cash to random addresses. Bitcoin value: now $587.
On Christmas Eve morning (Bitcoin value: $652), desperate to find some way, any way, to close a Bitcoin transaction, I turned to the website LocalBitcoins, where people offer their Bitcoins for sale to local buyers who are willing to physically meet and exchange cash for Bitcoins. Now I was sending messages to random San Diegans asking them to meet me on Christmas Eve to exchange a trivial amount of Bitcoins. Shockingly, everyone on LocalBitcoins who advertised that they were ready to sell me Bitcoins was actually unavailable to do so, despite many of their advertisements claiming "24/7"availability.
I now had 4 Bitcoin wallets (Coinbase, Blockchain, CampBX and LocalBitcoins all set you up a new wallet when you join) and nothing but the digital howling wind to fill my many digital wallets. $636 would buy you a Bitcoin on the afternoon of Christmas Eve, if you could've figured out any way under this earth's blue sky to obtain them. I couldn't. Defeated, I began to suspect this whole thing wasn't yet for me. Then I remembered the 10 day hold on my new bank account had finally passed and I could probably use my new bank account to fund my Coinbase account, if I dared to do so.
I dared. It turns out Coinbase offers a certain small amount of Bitcoin to be "instantly available," which means that there is no wait for the transaction to complete. At that moment, the instantly available transaction offered was for up to 0.6 Bitcoin - ten times the amount I was interested in buying. I purchased. The transaction confirmed instantly.
It was Christmas Even night, and I had .06 of Bitcoin. I purchased when one Bitcoin was selling for $657, about $100 less than when I would have ideally made my purchase on December 8. At the time of writing, one Bitcoin is trading for $719. I'm on my way.
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