Buying Bitcoin and Ether in the UK
A journey of discovery, awkward id checks and trading Nectar Points
There’s a real buzz about cryptocurrencies right now, Bitcoin (BTC) and its more technical sibling Ether (ETH — the currency of the Ethereum blockchain) are hitting all time highs. I was lucky to get involved a few months ago, before the latest rise, largely by chance, but have been popping odds and sods into the market since. I’m not recommending anyone else does the same, but if you do, hopefully my experiences will help smooth the path a little.
One of the biggest mysteries is how to get started and buy your first Bitcoin (or more likely, fraction of a Bitcoin) — especially if you are in the UK and armed with a UK bank debit card. I’ve tried a few schemes, and without doubt the simplest and in fact the only one I’ve tried (so far) that isn’t painful and doesn’t feel shady is Coinbase (this is my affliate link — we both get £7 “free” bitcoin if you spend $100-worth). With Coinbase, you just sign up on their site to create an account and then download their app to track things as you go — you are able to use any 3D secure (ie normal) debit card to buy Bitcoin, and you get billed in pound sterling — so no nasty bank charges for converting from $ or Euros. The only snag is an initial £100 a week card limit, though they have some maths so that your limit gets freed up again as the days roll by. To be honest, the limit is a good thing — as you can take advantage of dripping money into the market, and not try to predict a good time for a larger lump sum investment. Once you’ve done a few payments, you can increase your weekly limit through the Coinbase site.
One of the downsides of Coinbase is a 4% charge on debit card transactions, though they do make this quite explicit — which is good for transparency, but also annoying as you can see what they’re taking from your investment. The upside of this is that its not a flat fee, like I am used to with share payments, so it doesn’t penalise you for small deals with a fixed cost.
In an attempt to avoid Coinbase charges, I’ve tried a few other services — the first was a service called Bitpanda — who also take debit cards, but bill in Euro’s — it initially looks cheaper, but by the time your bank has taken a transaction charge and made up an exchange rate, you are out of pocket. The signup for Bitpanda was also quite amusing, I ended up proving my identity via a video call whilst on a train (with my passport and all) — I didn’t really realise that was going to happen, but when it did I couldn’t back out, so ended up going on with it and virtually dying of embarrassment. Anyway, aside from that pain and bank costs, Bitpanda is fine and reliable.
The other thing I tried when I want to buy more than £100 worth in a week is a service called “localbitcoins” — this lets you buy coins from traders in your own country via bank transfer or (God forbid!) meeting up and handing over cash. Suffice to say, this worked well, my chosen guy swapped the bitcoin over for the money I transferred to the assigned bank account and all was well. The dodgy part was that I had to prove my identity again — this involved sending photos of myself with my id, with my bank card and finally with a signed letter I wrote saying that I wasn’t being coerced. I got a better rate than Coinbase, but honestly it wasn’t a pleasant experience, and I don’t think I’ll do it again.
Finally — those odds and sods I mentioned… well, I wasn’t really convinced about the whole Bitcoin thing, and didn’t really have any spare cash, but I did want to kick the tyres. I had a lot (like, really quite a lot) of Nectar points sitting in my account from supermarket shopping over the years and hadn’t really found a good way to use them — so I hit upon the idea of “cashing in” £50 of Nectar points each week when I did my shopping, and then putting that £50 into my Coinbase account. I did this religiously for a few weeks until my Nectar account was empty and my Coinbase account had a good balance of Ether and Bitcoins — I was lucky with the timing that I got started (though history will ultimately tell) — but by feeding in a bit each week I wasn’t taking a punt on any particular price or trend.
Good luck if you do decide to dip a toe in… hope my story helps.
(Please do your own research and decide if this is right for you, its very likely you won’t get any money back as this is a highly, highly speculative area).