How to Buy Bitcoin in
the UK (BTC)

Learn More About Bitcoin

Regardless of the level of technological literacy and people’s lack of knowledge or awareness for the crypto industry, most of them have heard at least a thing or two about Bitcoin. This means that the world’s first cryptocurrency has become a household name by now.

If you happen to be both a tech-savvy individual and a Bitcoin aficionado, this guide is exactly what you need to get started. If not, maybe you’ll consider changing your mind, once you learn about the background of this asset and how you can make a profit out of it in the UK.

Without further ado, let’s uncover Bitcoin’s mysteries!

What’s Bitcoin?

Bitcoin (BTC) is the first completely decentralized digital currency or cryptocurrency in the world. It’s used on a peer to peer network, protected with cryptographic proof, and stored on a digital ledger called the blockchain. People use it to purchase goods and pay for services online or hold onto it for its investment value.

The History of Bitcoin

Two decades before Bitcoin’s emergence, in the late ‘80s, developers had already started thinking of ways in which to use programmable code to create digital cash. The biggest challenge was to design a fully-fledged digital coin that wouldn’t depend on central authorities for protection and regulation.

At the start of the twenty-first century, financial institutions were facing a major crisis that culminated in the 2008 stock market crash. This was yet another proof that the current financial system was outdated and broken, and desperately crying for an alternative solution.

The Bitcoin white paper, Bitcoin: A Peer to Peer Electronic Cash System, was published as a direct answer to the financial crisis, on October 31, 2008, by Satoshi Nakamoto, an individual whose identity remains a secret to this very day.

In this document, Nakamoto talks about the motivation behind this project and introduces the cryptocurrency and peer to peer network. He acknowledges the contributions made by other developers and recognizes how they helped him arrive at his unique solution.

Nakamoto figured out that cryptography could be the answer to the double-spending problem and therefore implemented a timestamp server based on cryptographic proof or work within the network. Timestamping the data is done by Bitcoin miners, who perform a complex algorithmic problem to verify the incoming transactions.

Bitcoin’s software was launched for the public in 2009, and on January 3, 2009, Nakamoto mined the founding Bitcoin block, popularly known as the Genesis block. Ten days later, he also succeeded in making the first Bitcoin transaction by sending 10 BTC to Hal Finney, another crypto enthusiast.

The next milestone for Bitcoin was when New Liberty Standard published its earliest exchange rate against the US dollar. Their estimation took into account the production costs for mining BTC and determined that 1 BTC equals around $0.0007. Unbelievable, right?

The following years brought new exciting things for the Bitcoin community. This included the launch of a couple of Bitcoin exchanges and even some competitor cryptocurrencies. The world was slowly taking up an interest in this type of investment. As a result, Bitcoin’s price continued to climb up, reaching an incredible $20,000 by December 2017!

Although this all-time high was followed by a slump, it helped popularize Bitcoin among the general public.

Why Was Bitcoin Created?

Bitcoin was primarily created to show the world that we could function with an alternative global financial system that would be decentralized, faster, cheaper, and where people will have the power to govern over their own finances.

Why should we pay unreasonably high fees to financial institutions such as banks and wait for them to decide whether to approve our transactions or not? Why wait a couple of days to complete these transactions, or even longer if we’re transferring money to a relative abroad.

Why rely on these centralized authorities whose security measures are often dubious when you can trust in blockchain technology that makes sure third-parties are prevented from changing or deleting the stored transactions.

Bitcoin’s Pros and Cons

A lot of people turn to Bitcoin because it’s pseudonymous, irreversible, and extremely secure. It has the potential to turn into a global currency as more and more businesses and retailers add BTC to their list of supported payment methods.

Because of the increased interest and demand, Bitcoin’s price has seen steady growth in the last couple of years. It’s a lucrative investment, especially for those who’ve bought bitcoins when it was worth ten times less.

However, people are worried that if they invest in Bitcoin they’ll experience great losses due to the coin’s volatility. Customers are afraid to spend their BTC as they’re not sure about their exact value, while merchants are afraid to price their items in BTC because of price fluctuations.

How to Store Your Bitcoin

The best way to buy Bitcoin in the UK is to use an online crypto exchange. Usually, these platforms belong to larger centralized companies that oversee customers’ transactions and earn money from service fees.

You can join a fiat to crypto exchange if you don’t have any other cryptocurrencies to deposit. Otherwise, Bitcoin is a very common trading pair with other popular digital assets like Ethereum, Litecoin, and Ripple, for example. UK traders would use exchanges like CEX.io, Coinburp, or Coinfloor.

To be one step ahead in the game from other Bitcoin traders, make sure you choose a Bitcoin wallet ahead of time. While there are different types of wallets, they all generate a private key that users should keep safe because it’s the only way they can access their funds.

The first and most common type of wallet is the online wallet. You can access it from your computer or mobile device (if the wallet has a mobile app). They’re created by exchanges or third-party providers and keep your private key online. We recommend using them as temporary solutions because they’re liable to phishing scams and hacking attacks.

Next, there’s the desktop wallet as an offline wallet alternative that you can use. Here, your private key is kept on your personal computer in “cold storage”. This means that the responsibility is yours to make sure your computer doesn’t get affected by any malware.

Finally, you can invest in a hardware wallet, an external device that looks like a USB stick. The great thing about it is that it’s portable and disconnected from the Internet, which means you don’t have to worry about an outsider stealing the key to your funds.

When you first activate the wallet, it generates a seed phrase that you can use to recover your BTC in case you lose the wallet.

Alternative Ways of Buying Bitcoin

You can’t decide what buying method works best for you unless you educate yourself about the alternative way of buying Bitcoin in the UK. Here are the three most convenient ones:

Peer to Peer Exchanges

Peer-to-peer exchanges are decentralized crypto exchanges that require no intermediaries in the process of buying and trading Bitcoin. What they do is they link buyers and sellers and let them agree on the orders themselves, using preprogrammed software (e.g. smart contracts).

The software matches customers based on the orders created by sellers. To create an order, sellers specify the amount of Bitcoin they want to sell, the price they’re willing to accept for the coins, and the preferred payment method.

P2P exchanges are great because they allow customers to remain anonymous and take full responsibility for their funds.

Bitcoin ATM

Bitcoin ATMs (BATMs) are very similar to regular automatic teller machines, designed to make buying Bitcoin even more accessible around the world.

So, how do they work? The Bitcoin ATM connects you to a high liquidity digital marketplace where you can purchase Bitcoin at an average rate, including a 5 to 10% service fee. They accept credit/debit cards or cash. When you choose the amount, you need to enter your wallet address to receive the BTC.

Traders usually use these machines if they’re traveling and don’t have access to the Internet. To find BATMs, you can visit Coin ATM Radar that has an interactive map where you can find the closest UK Bitcoin ATM. Not surprisingly, they’re located in supermarkets, airports, and retail stores.

Amazon Gift Cards

Not a lot of people know that Amazon Gift Cards can be exchanged for BTC. These cards are a popular birthday gift and come in preset $10, $25, $50, and $100 amounts, or the option to customize a card with a price anywhere between $25 and $500.

Next time you have trouble deciding what to get for a friend or a relative who’s interested in Bitcoin, get them an Amazon Gift Card! However, since not all exchanges include this trading pair, make sure to mention some popular platforms like Price or Paxful that do.