The best and easiest ways to buy bitcoin in the UK.
Buying bitcoin in the UK has never been an easy task, but it's certainly easier than it was. Even during bitcoin's price explosion in 2013 you had to wire money to Mt Gox's Polish bank, send a scan of your passport, and face the risk that your pounds or bitcoin might eventually never make it out of the exchange. Thankfully, things have changed since Mt Gox collapsed. Several UK exchanges have launched so we Brits should finally be able to purchase bitcoin without the cost of wiring money to a European bank. And with US-based Circle finally having its public launch, buying bitcoin just became even easier. One thing you will have to get used to is the price you pay being more than the current global average. This is normal, but for Brits it is a little more than you would pay in, say, the United States.
So here are the best ways to exchange your hard-earned money for bitcoin in the UK as of December 2015.
The premise here is that you pay an individual bitcoin seller directly, usually by bank transfer. The UK has an advantage over other countries with our Faster Payments network, meaning bank transfers can be made very quickly, often within 10 minutes. From a buyer’s perspective, you initiate a trade and make your transfer into the seller’s account using the details provided by the site. At the same time bitcoin are sent by the seller and held in escrow by the site until the seller confirms they have received your payment. Bitcoin are then released to your account. The disadvantage is that peer-to-peer sites usually have at least £10-£15 mark-up on the global average price for bitcoin. But keep your eyes peeled on the price and you can pick up some bargains.
LocalBitcoins operates similarly to eBay in that you can see a seller’s feedback and trade history and make your own decision whether you deem them trustworthy. Trades are mostly smooth, though some sellers will demand ID such as a scan of your credit card before they will deal with you. If you pay attention to their terms and only use sellers with 100+ positive feedback you should be fine. You can also buy bitcoin with cash by meeting the seller and making the transfer to your mobile phone on the spot.
Bittylicious is a well-run site that facilitates peer-to-peer transfers without exposing you to the "wild west" presented by LocalBitcoins. You don't know who your seller is until you've initiated the trade, but all sellers are vetted by the site. Bittylicious won't allow you to make trades beyond a certain value until you've supplied sufficient ID verification, although smaller trades can go through without these requirements. The site also offers a growing range of other cryptocurrencies and is one of the easiest ways to get started.
Coinfloor have recently launched a peer to peer bitcoin marketplace called Coinfloor Market, with prices and liquidity sourced directly from their existing exchange. Unlike other peer to peer marketplaces, they only work with professional bitcoin brokers who have a long track record of successfully selling bitcoins in the UK and have passed through their strict vetting process. Buyers are able to speak directly to the brokers, and all bitcoins are stored in their 100% multi-signature cold storage system.
The classic way to buy bitcoin is via an exchange. These operate in a similar fashion to established financial trading exchanges: you make an offer and someone else fulfils it, pushing the price up or down. The problem is that the UK’s financial landscape hasn’t caught up with bitcoin just yet. All UK exchanges have found it impossible to open a British bank account, and despite the best efforts of the Isle of Man, many are now languishing with banks located in the Eastern Bloc. This makes it pricy and more hassle to transfer money to and from British exchanges because it has to be sent using SEPA, and until Britain’s banks soften on bitcoin it’s difficult to recommend an exchange for casual purchases. If you want to actually trade though - ie. buy and sell bitcoin for profit - these are your best bet.
Arguably the exchange with the most liquidity (ie. money coming in and out), Coinfloor has free transfers into your trading account from £500 but charges a £10 fee for a less than £500 deposit. The site is regarded as trustworthy, publishing public audits of its assets every few months, and processing transfers out from its cold storage three times a day. It operates what's called a maker-taker fee model, whereby fees are charged according to whether you add liquidity to the order book ("maker"), or "take" liquidity away. So, if you place an order below or above the market rate you are defined as a "maker" but if you simply place at order at market rate you are defined as a "taker". Because of its liquidity, Coinfloor's prices are often very close to the global average and they sometimes have fee-free trading periods that you can take advantage of. This means you may be able to end up with a very good rate for your bitcoin, offsetting the price you will have to pay to transfer your pounds into their Polish bank.
CoinCorner operates from the Isle of Man and aims to become a one-stop shop for Bitcoin. In addition to the exchange, they offer a mobile wallet, as well as eCommerece plugins and a point of sale system for merchants. Deposits can be made via bank transfer and also credit/debit card. Fees depend on a number of factors such as trading volume and account status, but typical fees start at 1% with no fee to deposit or withdraw Bitcoin. Since regulations were introduced for digital currency businesses on the Isle of Man, CoinCorner is the first cryptocurrency exchange in the world to fall under the IOM Proceeds of Crime Act.
QuickBitcoin offers a quick and easy way to buy bitcoins in the UK. Using faster payments, most orders are completed within 10 minutes of receiving the funds. ID is required for fraud prevention and through their site you can buy up to around £2000 of bitcoin. If you want to sell bitcoin simply contact them for a quote. QuickBitcoin has high levels of liquidity and also runs a brokerage service for larger orders. Contact email@example.com to request a quote for buying or selling over £2000 of bitcoin and they will give you a better price. Orders of over £100k are possible.
Safello allow you to buy and sell bitcoins with Euro, GBP and SEK. As of January 25th, Safello lost it's ability to accept money in the UK using faster payments, meaning now money can only be sent to them using international bank wires. Upon registration they require you to verify your identity by providing basic personal information, an image of an ID card (passport, national ID card or driving license) and a utility bill. After you've verified your identity, all you need to do is confirm your email address and complete the KYC form in order to be able to start buying bitcoins.
Safello charges a transaction fee which is stated before you purchase your Bitcoins. The trading fee may vary depending on the frequency of your purchases and the size of your order.
Another useful service when looking to buy bitcoins in the UK is BittyBot. BittyBot monitors and compares the UK bitcoin market to help you find the best prices and most reputable traders.