Lately, buying Bitcoins has become painfully time-consuming. Five years ago, buying Bitcoin at any exchange was an instant process. But as the Bitcoin network gained widespread adoption, the process involved in purchasing the coins hardened. Exchanges introduced Know Your Customer rules (KYC), and the process became even longer.
Must-Have Items to buy Bitcoins
Usually, to successfully purchase Bitcoins, you must have the following items:
- A Bitcoin wallet- a wallet is a hardware device, paper document or application that stores the addresses that enable you to buy or sell Bitcoins.
- A bank account- nowadays there are so many options when it comes to banking. But whether you want to use wire transfer or western union, you must have a way to transfer your money to the person or exchange selling you Bitcoins.
- Be a member of an exchange-Bitcoins are purchase through exchanges such as Coinbase and Binance. There are 3 main types of exchanges all which can help you get Bitcoins.
- Internet-connected device- to join an exchange and purchase Bitcoins, you must have a mobile device or personal computer with good Internet connection.
So, why does it take too much time buy Bitcoins sometimes? There are 5 main reasons why a Bitcoin transaction may take longer than one hour.
- The Payment Method
One of the reasons it may take longer for Bitcoins to reflect in your wallet is because your mode of payment does not support fast transactions. Most wire transfers, for example, take 2-3 days to reflect in a recipient’s bank account. With some banks, it may take up to 5 business days before a payment is completed.
To overcome this challenge, opt for a faster payment method. Western Union transfers, for example, take just about 15 minutes to reach the recipient. You can also buy Bitcoins with PayPal, and it’s much faster than other payment systems. The only problem with using PayPal is that it can be misused by scammers. Read this article on https://www.abitgreedy.com/virwox/ to learn how to buy Bitcoins instantly and safely with PayPal.
- The Bitcoin Exchange
A good percentage of Bitcoin users have bad experiences buying Bitcoins from exchanges. Some exchanges ask you to wait for up to a week before your payment is processed while others will freeze your money for minor errors. There are 3 main types of Bitcoin exchanges and vary a lot in terms of completing your payments.
- Regular exchanges-
Exchanges such as Coinbase are classified in this group. Here you make a transfer and Coinbase takes a day to confirm the payment. They then send you the number of Bitcoins you wish to buy.
- Peer to peer lenders-
These exchanges use a software program to connect buyers directly with sellers. The sellers set the prices and choose their preferred payment method. On average it takes an hour or two to buy Bitcoins from a genuine seller who accepts a fast payment method.
Brokerage firms act on behalf of sellers and charge a commission for every transaction. You will likely buy Bitcoins faster from a broker, but you have to pay higher charges.
Purchase Bitcoins from reputable exchanges if you want to avoid poor experiences. Review respected cryptocurrencies exchanges that only ask for minimum documentation. Most users hate the process of giving lots of personal information to an exchange as well as being asked to wait for days before you are allowed to transact. You may not avoid KYC-Know your Customer rules and regulations but go for an exchange with the least documentation. Most peer to peer lenders, for example, rarely ask for any documentation.
- The Bitcoin Network
One of the biggest issues affecting Bitcoin transactions is the network itself. The Bitcoin blockchain- the decentralized ledger where transactions are recorded- has often been criticized for its speed. The blockchain approves payments before they reflect in the recipient’s wallet. The approval process follows 6 confirmation stages. The approval is completed by Bitcoin miners and may take a long or short time depending on:
- The fee paid.
- The number of confirmations.
Since Bitcoin is the most popular cryptocurrencies, millions of transactions are completed every minute. The network can only handle one block at a time. And one block is equivalent to 1MB. Most payments have to queue for several minutes or hours before they are confirmed.
To overcome the challenges posed by the Bitcoin network itself, pay a higher transaction fee where allowed. Most wallets have this option. Miners will usually prioritize Bitcoin transactions with a higher mining fee.
Tips Speed up your Bitcoin Transaction
There are several ways to improve the speed of your transactions. Assuming you use cash or any other fast payment method such as Western Union, you can use these tips to ensure your Bitcoin transactions are always listed in the next block by miners.
- Pay a reasonable mining fee-
These days, Bitcoin wallets allow you to increase the miners’ fee to help speed up your transaction. Take advantage of this feature. Pay at least 50 satoshis per one byte of a transaction. A Satoshi is a millionth of a Bitcoin.
- Transact when Bitcoin prices are stable-
When Bitcoin prices plummet or skyrocket, Bitcoin holders transact in large numbers. At this time, the network is overloaded with payments, and it may take days before you receive your payment.
- Banking system-
There are multiple ways to pay for Bitcoins besides Western union and bank transfers. Common online payments such as Payza, PayPal and Payoneer can also help you complete a payment faster.
- Be patient-
Paying a higher miners’ fee isn’t the solution for a quick transaction. If you are using a reputable exchange platform, allow them to verify your details. You’d better get inconvenienced at this stage than lose money to a scam exchange.
Almost every Bitcoin user can attest to feeling frustrated when trying to buy some coins. We all wish the process was any faster. Some Bitcoin users have actually moved to Bitcoin Cash because it resembles Bitcoin but offers faster and more convenient services. But since Bitcoin is still a solid network, we can only hope that there will be improvements in the future to help make the payment system faster.