A friend of mine recently bought £10 worth of BitCoin. There is nothing out of the ordinary about this. CryptoCurrency is a bit of a hot topic in the worlds media and I work in an IT department where people are interested in technology and get rich quick schemes. What drew me to her story is not how late she was to the CryptoCurrency bandwagon, but wherever she bought her BitCoin from charged 50% fees for the pleasure. £10 became £5 worth of BitCoin with a single click. This was outrageous! I was convinced that there was a way to buy BitCoin without fees. Research ensued.
What is BitCoin?
If you haven’t heard of BitCoin, or it’s shortened trading name BTC, come out from under that rock. It’s safe, we’ll look after you.
There are plenty of places online that can explain this better than I can. It’s a wormhole of a Google search that you can attempt at your own risk. But without going into too much detail, BitCoin is the first decentralised digital currency. It works without a central bank or a single administrator. It’s utilised on a peer-to-peer network where encrypted transfers take place directly between it’s users.
What most people are familiar with is the humongous growth since its introduction in 2009. It’s value has risen to well over £10,000 for a single BitCoin. Placing an exact figure at the time of writing is stupid, it seems to keep going up!
BitCoin Without Fees : How do you get Bitcoin?
In it’s infancy, BitCoin was “mined” using computers with a lot of processing power. Since it’s immense growth in value, CryptoCurrency exchanges have popped up around the internet. Just like the currency exchange that you might use to convert your pounds to dollars before you go on holiday, CryptoCurrency Exchanges help you to convert your hard earned cash to your CryptoCurrency of choice.
Just as you would pay a fee when you transfer your holiday cash, the majority of CryptoCurrency Exchange sites will also charge you a fee. Sometimes in extortionate amounts. We don’t want any of that!
As well as being charged a fee for buying the CryptoCurrency, you would likely be charged excessive amounts when buying into the Euro market. The reason you have to buy in Euro is that there’s no current GBP buying options on CoinBase.
If you’re still interested, follow through the guide below.
I need to mention that this is not financial advice! The CryptoCurrency market is highly volatile. If you’re thinking of investing in BitCoin, please do your research and only invest money that you can afford to lose.
Buying Bitcoin Without Fees : What you need
· Revolut – A free mobile banking app that gives you a virtual pre-pay bank card, but also allows you currency conversions at the inter-bank rate… for free!
· CoinBase Account – This is our CryptoCurrency Exchange. The mobile CoinBase app is free on the app store, however I recommend doing the signup procedure on a desktop device. (By using this link, we both get $10 worth of BitCoin for free when you sign up and deposit $100 or more.)
· GDAX Account – Technically, this uses your CoinBase logon credentials. GDAX is CoinBase’s exchange trading platform. GDAX doesn’t have a mobile app, but it’s mobile website is very easy to navigate and can make buying or selling an easier task when on the road.
Verify your CoinBase account with your chosen ID. – I used my UK Driving Licence. All registered financial companies require some identification to comply with “Know Your Customer” and Anti-Money Laundering laws.
Don’t enter a payment method. – This is where you’re likely to get charged for making purchases in other currencies (Euro in this case).
Top up GBP into Revolut from your UK bank with a debit card.
Exchange GBP to Euro (EUR).
Depositing your Funds
In CoinBase, Click Accounts.
Click Deposit under your Euro Wallet.
Make a note of the reference number that is displayed in the popup.
Confirm that you’ve copied the reference number down and click continue.
Enter the amount of Euros that you intend to deposit.
You are then given all the banking details to pay your money into.
Open Revolut on your phone.
Click Payments (the two arrows) at the bottom.
Select the option to send money to a bank account.
You need to “Add a new Beneficiary”.
The “Transfer Type” needs to be “To a business”.
Change the country and currency to match the CoinBase details (Country = Estonia / Currency = Euro).
Copy bank account details the details from Coinbase EXACTLY into Revolut.
Once the CoinBase beneficiary is created, enter the amount of Euro that you are depositing.
Enter your reference number from Step 9.
Check CoinBase to ensure that your money is deposited (it took mine around 24 hours, but I’m led to believe it’s normally a lot quicker).
Once your Euro Wallet is topped up in Coinbase, head over to GDAX.
In GDAX, select the BTC/EUR market (in the top left).
Click on Deposit in the Left Hand Column.
In the Deposit Funds Popup, Select “CoinBase Account”.
Enter the amount of Euros that you are depositing.
Placing a Limit Order
Select the “Limit” option in the buying window.
Set your limit price. – This means that your order will only go through when the BTC price equals your limit. If you want a quick purchase, set the limit price to just below the current value.
Set the amount of BitCoin or BTC that you’d like to buy. – Keep an eye on the total just below as you adjust the amount of BitCoin you want to buy.
Click Place Order.
As soon as the value of BitCoin matches your limit price, your order will complete.
DISCLAIMER : This guide was correct at the time of publishing. The websites and applications being used here may change and affect this procedure in the future.
It’s generally recommended that you withdraw your BTC or other CryptoCurrency to a secure wallet, unless you’re planning on day trading with BitCoin. I was just trialling it with a small amount for the long term investment, and withdrew the BTC back to CoinBase.
That should be about it. Be sure to leave a comment if you found this helpful or if you got stuck anywhere. Good luck with your investments!