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How to buy Bitcoin in the UK and EU

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In the UK buying bitcoins through exchange sites became extremely difficult following the huge publicity over easter weekend at the end of March 2013.

Most of the exchanges that offered account funding via UK bank transfer had their accounts closed by the banks (possibly due to fraud or money laundering risk, possibly government request) meaning as of April 2013 you have to use either a slower international bank transfer, or take an indirect route!

The methods below should be the fastest in the UK currently. Each has its benefits and drawbacks. (UPDATED 20/09/2013)


Localbitcoins.com or other Peer to peer exchange or OTC market
Speed: 5 - 10 minutes
Fees: No set fees, buy at best available rate

For small to medium purchases you can buy Bitcoin online using a person to person exchange like localbitcoins.com. You can send money by various means online (bank transfer, OKPay, Pingit, Paypal etc.) or in larger cities you can meet the seller in person and buy for cash. This method has some risk of fraud to you as a buyer because this is a peer to peer deal and you have no immediate way to trust the other party. To reduce this risk most exchange sites, including localbitcoins.com offer an escrow service,where the seller places the coins you are buying into escrow before you send payment, meaning the seller can't easily walk away with your money. For this however we have to trust the exchange itself (they hold the coins during this process) and how effective the escrow is even if they are trustworthy (for example how do they decide who is at fault if you say you have paid but the seller denies it?).




VirWox
Speed: 5 minutes
Fees: 9%+ using Paypal / Credit card

For small purchases of Bitcoin online with a huge range of methods you can use VirWox.

VirWox is a virtual online exchange, originally designed for Second Life to exchange in-game currency Linden Dollars (SLL) to and from real world currency. They offer the ability to fund your account using credit card or Paypal, as well as more "anonymous" methods like UKash. The main advantage of VirWox is it is virtually instant to buy Bitcoin this way. You can literally set up your account any buy Bitcoin within minutes. The disadvantages are that if you are buying with cash using GBP, EUR or USD you will have to exchange your money to  "Linden Dollars" (SLL) and then to Bitcoin (BTC), losing around 3% percentage on both transactions due to fees to do so. However to try out bitcoin quickly this is one good method using an established company. I would advise using this if you want to see what Bitcoin "is" and try it out in wallets etc.

The step by step guide is as follows:

1. Go to VirWox and sign up for a new account. If you don't use Second Life currently just add your Avatar name as your nickname, you don't need to use it in order to buy bitcoin.
2. Fund your account using any of the available methods.
3. Buy SLL using your currency balance.  Buy Bitcoin (BTC) with SLL instantly at the market rate being offered.

This method has very little risk to you, you are buying them from a well known source using PayPal a trusted payment provider at a relatively low fee. You can purchase about £40 per day, and about £120 in the first 30 days. Overall you will look to pay about 9% using this method if you buy by credit card. This is not ideal, but for small amounts (less than £150 - £200) and virtually no risk (using credit card) it is ideal.



Get Bitcoin in around 2 or 3 days using an European (SEPA) or International bank transfer
Speed: 2 - 3 days
Fees: Transfer fees + 0.5% upwards

If you are able to wait a few days and are buying more than £200 or more you can use one of the European exchange like bitcoin.de and fund your account by European bank transfer (SEPA) within 2 or 3 days. It will cost you a varying amount for the transfer itself and your bank will take another cut in the exchange rate by using their standard rate rather than the best market rate.

If you are transferring over £1000 international bank transfer costs become a bit more tolerable, so you could look at www.mtgox.com or www.btc-e.com

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