Currently, while Bitcoin, the King of Cryptoland, is slowly recovering after the recent dump, more and more people around the world have this itching feeling of missing out on something. What to do with Bitcoin? Where to buy it? How to choose the best Bitcoin exchange?
What to do with Bitcoin?
Bitcoin (BTC or XBT) is the first in the row and world’s best known cryptocurrency, which is decentralized, bold and extremely hyped after its last November soar up to $20,000. Enthusiasts buy Bitcoin for conventional currencies as GBP, USD, EUR or other altcoins in order to:
- hold it as a short-term/long-term investment, or a store of value, which is believed to only appreciate in the long run;
- or, alternatively, use Bitcoin’s extreme volatility to day trade and earn a fortune at the highly speculative market (this method is for the most risky-minded).
Be aware that trading digital funds is the same as the stock exchange, but the crypto market is far more volatile. Investing in Bitcoin can be both risky and rewarding, so it’s better to invest only the amount of money you can afford to lose.
Where to buy Bitcoin with GBP?
Bitcoins are usually bought on Bitcoin exchanges, platforms that allow users to trade Bitcoin for fiat money or altcoins. Exchanges can be decentralized and centralized, local or worldwide. By a simple Google search one can see that British Bitcoin investors and traders use both types of exchanges, however, centralized are more popular.
Centralized exchanges are traditional and more common in the crypto space. These online platforms are easier to use, full of additional services and trading options. However, there are several aspects to keep in mind when it comes to centralized exchanges:
- ID verification is required;
- your personal funds are controlled by the exchange;
- different fees are applicable;
- downtime in operations is also possible.
Examples of such Bitcoin exchanges are in plenty. The most popular UK-based are CEX.IO and Coinfloor.
Decentralized exchanges do not depend on a third-party service to keep client’s money. Transactions take place directly between traders (peer-to-peer) and automatically through escrow systems. Such marketplaces let traders control their funds, they are anonymous, no ID needed, no transaction fees are applied. But dealing with them can be difficult as additional services are not provided, and most important – they are less secure.
Examples of popular decentralized marketplaces in the UK can be Bittylicious or LocalBitcoins.
How to choose the best Bitcoin exchange?
First of all, if you are in, it is important to ponder over criteria of a safe and reputable Bitcoin trading platform, which you can pick up for buying or selling Bitcoin from time to time or on a daily basis. Please also check what currencies are accepted by the exchange (just because they have GBP markets doesn’t mean they accept GBP deposits) and whether you can withdraw in Pounds.
The essential criteria to the exchange are as follows:
- How long is it in the industry?
- Where is it based?
- In what countries does it operate?
- How reputable is it with customers?
- Does it have a cold storage for customers’ funds?
- ID check, KYC, 2FA?
- Is it transparent in showcasing data?
Trading Volume and Liquidity
- Does it have a big range of trading pairs?
- What is a trade volume for the crypto of your choice?
Credit card/Bank transfer
Top 5 Bitcoin Exchanges with BTC to GBP pair for trading
According to the above-mentioned criteria, 5 Bitcoin exchanges have been selected. All the market volume data is current to 1 March, 2018.
Based in London since 2012, it is the biggest exchange in UK to trade GBP to Bitcoin. It provides the possibilities of trading directly against GBP. The market volume is 31,98 %. The exchange provides 100% cold storage. Coinfloor has several fiat to crypto trading pairs. Trading fees and Deposit/ Withdrawal fees are applied.
- One of the earliest crypto market players;
- One of the safest exchanges;
- Holds a major volume of trading BTC to GBP.
- Minimum initial deposit of 1,000 GBP is required;
- Deposit/Withdrawal fees are applied;
- Many complaints from users.
CEX.IO was established in 2013 in the UK and since then it has been providing reputable services all over the world, having more than 1 million users trusting it. It allows BTC to GBP trading as well as depositing and withdrawing Pounds. Bank transfers are free of charge. There’s an option to deposit Pounds via a credit card as well, but be notified there are limits. Cold storage of customers’ funds, 2FA, KYC are required.
- Long-term player;
- Easy to buy Bitcoin with a credit card;
- High level of security.
- Up to 7% charge when buying BTC;
- Demanding verification process.
They have 2 websites: GDAX for traders and Coinbase for people who buy/sell from time to time. Based in San-Francisco, California since 2012, it serves as a crypto wallet and online platform. Unfortunately, they do not currently support deposit/withdrawal to GBP, you need to transfer EUR to/from your account instead. So, you can ONLY trade BTC for GBP there.
- High-volume market;
- Competitive trading prices;
- Deposits and withdrawals in GBP are not supported;
- GBP to EUR currency conversion fees applied by the bank.
Based in Poland since 2017, Coinroom facilitates buying/selling cryptos with conventional currencies like GBP and EUR, which make its biggest turnover. The exchange aims at expanding mostly in Central and Eastern Europe. Coinroom has 100% cold storage. It allows deposits, withdrawals, transfers and withdrawals at ATMs.
- Simple exchange platform;
- Good reputation among customers.
- Low volume;
- Not enough liquidity.
This platform differs from other above-mentioned as it is decentralized. People from all over the world use the website to exchange their local currency to BTC, placing the corresponding orders on the platform and being matched with appropriate bids. It supports various payment methods, including cash and online banking services.
- Small amounts of BTC can be bought;
- Fast operations;
- Cash or any payment method preferred by users.
- No ID verification, scams are possible;
- The prices for BTC can be significantly higher.
To make the long story short, centralized cryptocurrency exchanges bring more efficient and secure opportunities for buying Bitcoin or other digital currencies. They are much more widespread and popular with customers all over the world. Decentralized exchanges can be much more risky and insecure, while transactions go faster with a big range of preferable payment methods.