Ways to Acquire Bitcoin

You understand what Bitcoin is. Now you want some. The good news: there are more ways to acquire bitcoin than ever before. The bad news: each method has tradeoffs you should understand.

Method 1: Centralized Exchanges

The most common way to buy bitcoin. You sign up for an account, verify your identity, link a bank account or card, and buy.

Popular options: Coinbase, Kraken, Gemini, River, Swan

Pros:

• Easy to use
• High liquidity (you can buy/sell any amount)
• Regulated (some protection if things go wrong)
• Accept various payment methods

Cons:

• Require identity verification (KYC)
• Your purchase history is linked to your identity
• You're trusting the exchange to not lose your bitcoin
• Fees vary (sometimes hidden in the spread)

Best for: Beginners making their first purchase, larger amounts, DCA (regular automated purchases)

Method 2: Bitcoin-Only Exchanges

A subset of centralized exchanges that focus exclusively on Bitcoin. They tend to have better customer service for bitcoiners and often offer auto-withdrawal features.

Popular options: River, Swan, Strike

Pros:

• Bitcoin-focused support and education
• Often have automatic withdrawal to self-custody
• Generally lower fees for recurring purchases
• No altcoin distractions

Cons:

• Still require KYC
• May have lower liquidity than larger exchanges
• Limited to fewer regions

Best for: People who know they only want Bitcoin, DCA strategies

Method 3: Peer-to-Peer (P2P)

Buy directly from another person, often through platforms that facilitate the trade.

Popular options: Bisq, Hodl Hodl, RoboSats, Peach

Pros:

• Often no or minimal KYC
• More private
• Supports various payment methods
• Decentralized (some platforms can't be shut down)

Cons:

• Usually higher prices (premium for privacy)
• Lower liquidity
• More complex to use
• Counterparty risk (though platforms use escrow)

Best for: Privacy-conscious buyers, people in regions without good exchanges, small amounts

Method 4: Bitcoin ATMs

Physical machines where you can buy bitcoin with cash.

Pros:

• Cash purchases possible
• Sometimes lower KYC for small amounts
• No bank account needed

Cons:

• High fees (often 5-15%!)
• May still require identity for larger amounts
• Limited locations
• Often worse exchange rates

Best for: Cash purchases, people without bank accounts, emergencies only (due to fees)

Method 5: Earning Bitcoin

Getting paid for work, products, or services in bitcoin.

Ways to earn:

• Ask your employer for partial salary in BTC
• Freelance on bitcoin-friendly platforms
• Sell products and accept bitcoin payment
• Create content and accept bitcoin tips
• Use services like Fold or Lolli for "cash back" in bitcoin

Pros:

• No KYC on the bitcoin itself
• Potentially better tax treatment (income vs. capital gains)
• Aligns incentives (you want bitcoin to succeed)

Cons:

• Requires finding willing payers
• May complicate taxes
• Volatile income if priced in BTC

Best for: Freelancers, people with skills in demand, long-term bitcoiners

Method 6: Mining

Running computers to secure the network and earn block rewards.

Reality check: Home mining is rarely profitable today. It requires:

• Specialized hardware (ASICs)
• Cheap electricity (under $0.06/kWh to be competitive)
• Technical knowledge
• Tolerance for noise and heat

For most people, buying bitcoin is more cost-effective than mining it. Mining is now primarily done by large operations with economies of scale.

Exception: Some people mine despite unprofitability because it's a way to acquire bitcoin without KYC, or they have free/excess electricity.

The KYC Question

KYC (Know Your Customer) requirements mean exchanges collect your identity information. This has implications:

• Privacy: Your bitcoin purchases are linked to your identity
• Taxation: Governments know you own bitcoin
• Security: Your data could be leaked in breaches

Some people don't mind this. They're in stable countries, they plan to pay taxes, and they value the convenience. Others prefer to minimize the data trail.

Both approaches are valid. Just make the choice consciously.

Fees to Watch For

Bitcoin purchases involve several potential fees:

• Trading fees: Percentage of your purchase (0.1-1.5%)
• Spread: Difference between buy and sell price (often hidden)
• Deposit fees: For funding your account
• Withdrawal fees: For moving bitcoin off the exchange
• Network fees: For the actual blockchain transaction

Always check the total cost, not just the headline fee. Some "zero fee" services make money on the spread.

Dollar-Cost Averaging (DCA)

You don't have to buy all at once. Many people set up automatic recurring purchases—weekly or monthly.

Why DCA:

• Removes timing decisions (no trying to "buy the dip")
• Smooths out volatility
• Builds the habit of accumulating
• Psychologically easier than lump sum decisions

How to DCA:

• Set a fixed amount (e.g., $50/week)
• Use a service with auto-purchase
• Set up auto-withdrawal to your own wallet
• Forget about it

Services like River and Swan are designed for this approach.