One of the problems with bitcoin is actually getting hold of the stuff. Most of us are not bitcoin miners which leaves us with the need to purchase cryptocurrency with fiat funds. If you live in the UK, there are some options, even though we can’t currently use services like Coinbase. Here we take you through the best ways to get hold of bitcoins in the UK.
The hard way
For anyone who is new to bitcoin, and currency trading in general, one of the most arduous things to get done is register with a cryptocurrency exchange. With every exchange you normally have to jump through hoops to prove your identity (which means anonymous trading is out of the question, unless you are very good at faking identities). Before you start, make sure you have scans of some photo ID (passport or driving licence), and several utility bills that prove you live where you say you live.
Once you’re registered and verified with your exchange of choice, you’ll then need to get the details for either a SEPA or international wire transfer, which you’ll then have to copy into the corresponding form in your online banking account. SEPA is short for the single European payment area, which is an initiative to increase the efficiency of payments between people in the EU and EEA member countries. Not all UK bank accounts properly support this infrastructure (eg HBoS doesn’t, but HSBC does).
As for exchanges accessible to UK customers, Kraken and Bitstamp both support SEPA payments and international wire transfers, whilst BTC-e only accepts international wire transfers. Such transfers from UK banks are somewhat expensive – look to pay £10 or more on a transfer. Then again, finding a UK bank that will give you an account with SEPA transfer facility for the purpose of trading bitcoin is another trick. An HSBC advisor recently told me that the bank has a policy of flat refusal on giving accounts for trading bitcoin.
The easier way
If you want to go through a process that is somewhat less intimidating than registering with an international exchange, there are some UK-based services that allow you to pay with a (free) bank transfer payment.
BitBargain is a UK-based service that allows the purchase of bitcoin via UK bank transfer and other services including PingIT (by Barclays), Natwest’s instant payment system, NoChex and more. It also permits the buying and selling of litecoin in addition to bitcoin. Simply tell the site how much of which currency you wish to buy and your payment method, and it will match you up with sellers.
Once a deal has been accepted by a seller, you’ll need to keep your browser open to keep an eye on the back-and-forth process between you and the seller who will signal acceptance of the deal and receipt of payment – which automatically releases the digital coins to you and concludes the deal.
There is some verification to go through at BitBargain UK, but nowhere near as much as sellers have to go though. There is, however, a “bitrating” that indicates the likelihood of the person you’re dealing with reliably completing the transaction.
LocalBitcoins.com also allows for remote buying of bitcoin, despite the site’s reputation for clandestine meetings between strangers for cash-in-hand trades. The process of online trades through this site is still somewhat protracted with informal communications between buyer and seller required to complete a trade. LocalBitcoins does act as a third-party escrow to ensure the trade is successfully completed.
In contrast, Bittylicious makes things about as simple as they can be without a UK equivalent of Coinbase. When you first join Bittylicious, you will need to add its bank details as a recipient in your online banking account. In subsequent purchases, all you have to do is log on, paste in your bitcoin address and the amount you want. Then you’ll be prompted to send the requisite amount of sterling to Bittylicious’s bank account (who then sends a payment to the seller that contributed the bitcoin for sale). That’s all there is to buying from Bittylicious – the more you buy (ie the better track record you establish), the bigger the amount of bitcoin the site will allow you to buy.
If you would like to read a more general guide for other locations then view our guide: How can I buy bitcoins?