How to Buy Bitcoin in Australia 2022
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Cryptocurrencies have been around for some time, and it doesn’t seem like they will lose steam any time soon. Australians have been onboard the crypto-train ever since the launch of Bitcoin, so buying the digital asset in Australia is pretty straightforward. Australian cryptocurrency exchanges comply with local crypto-laws, and every trading platform is regulated.
Thanks to the massive hype around cryptocurrencies, more and more crypto-novices are trying their hand at crypto trading. That’s why our article aims to simplify the process of buying Bitcoin for you in the land down under. For beginners’ sake, we’ll start off with the basics behind Bitcoin and write our way down to the purchasing methods.
Keep reading to find out more!
What Is Bitcoin?
Bitcoin is a peer-to-peer digital currency that functions without having to rely on any centralized authorities like governments and central banks. The currency was created in 2008 as a response to the 2008 economic crisis by the pseudonyms developer Satoshi Nakamoto. There are wild speculations about the mysterious inventor, and some even think the CIA launched the digital asset. Whether these rumours merit the truth, only time can tell.
Every Bitcoin transaction is recorded by a decentralized public ledger called the Bitcoin blockchain. The blockchain consists of a series of data blocks linked together on the network and it is stored on computers around the world, called nodes. Anyone can become a participant by setting up their own Bitcoin node. The blockchain is secured through cryptography, and the nodes in the network verify all transactions.
Every transaction that takes place on the blockchain is publicly displayed and shared among the nodes. These Bitcoin transactions are coupled together every 10 minutes or so by miners and added as transaction data to the blocks on the blockchain. In plain terms, the blockchain acts as an accounting book for Bitcoin.
What Is a Bitcoin Wallet?
Bitcoin is not a physical currency. Users need digital wallets to store the cryptographic private keys that provide access to their bitcoins. You can use software wallets or hardware wallets to store and access your Bitcoin. Most exchange platforms provide a free Bitcoin wallet, but the safest method is to use a hardware wallet instead. Software wallets usually come in the form of a desktop or mobile app. Hardware wallets are offline physical devices that are not connected to the internet, so they provide extra security against hackers.
We’ll touch on some of these points a bit later in the article when discussing how to purchase and sell Bitcoin.
Where to Buy Bitcoin (BTC) and Other Cryptocurrencies?
The most simple and straightforward way of buying Bitcoin is by using a cryptocurrency exchange. Cryptocurrency exchanges are trading platforms where traders can purchase and sell their digital assets. There is a semi-formal rule in the world of cryptocurrencies that states, “Once you find a reliable trading platform, the hard part of the work is done”.
There are many crypto trading platforms around the world, and Australia is proud to host some of the popular platforms in the DeFi space. Beginners don’t need to bother to find an exchange that hosts a wide range of features, as these platforms can get confusing quickly. The simplest solution would be to find a platform that offers regular spot trading features.
One of the best things about Australian exchanges is that they’re all regulated by AUSTRAC (Australian Transaction Report and Analysis Center). Moreover, every platform complies with KYC (Know Your Customer) and AML (Anti-Money Laundering) regulations. Users who choose to trade on Australian exchanges have to verify their identity to enjoy limitless daily withdrawals. The same goes for fiat currencies.
There are three types of crypto exchanges: Bitcoin brokers, crypto trading platforms, and peer-to-peer exchanges.
Types of Bitcoin Exchanges
Bitcoin brokers are crypto merchants that specialise in selling bitcoins. Some crypto brokerage platforms also sell altcoins like Ethereum (ETH) and Litecoin (LTC). The brokerage platforms are very easy to use, not to mention very safe.
Bitcoin brokers accept a wide range of fiat currencies for deposits, including the Australian dollar (AUD) and USD. Most offer a wide variety of payment methods such as bank transfers, credit cards, and debit cards.
Buying Bitcoin through a Bitcoin broker is usually faster than using other methods, but their fees tend to be higher compared to the other platforms.
Crypto Trading Platforms
Crypto trading platforms allow users to trade Bitcoin with other users through market orders. Some crypto exchanges allow users to make purchases with fiat currencies, but others allow only for crypto-to-crypto trading. Trading platforms offer lower fees and better rates than Bitcoin brokerages, as well as a wider roster of cryptocurrencies to trade. Trading platforms are often more suited to experienced users. They have features that require a bit of technical crypto knowledge.
Peer-to-peer exchanges are online marketplaces for trading cryptocurrencies. In plain terms, they are digital notice boards where you can announce your buy or sell offers. P2P traders usually directly contact each other and reach an agreement regarding their transactions.
The payment methods vary, and you can negotiate the terms. Users can even make cash payments for more anonymous trading. However, P2P platforms usually offer higher exchange rates compared to centralised platforms. Also, users need to be wary of scammers that are frequent on P2P platforms.
Creating an Account
Since crypto brokerages are the most simple and secure way of acquiring crypto, we’ll explain how to create an account on a brokerage platform to buy BTC. First of all, you should navigate to the main websites of notable platforms such as Swyftx, CoinJar, and CoinSpot and find the sign-up button, usually located in the right corner of the screen.
The initial sign up process is simple. Users have to provide the exchange with some basic credentials like email address, full name and surname and choose their password. Once this is done, users will receive a confirmation email with a link to complete their registration.
For fiat deposits and withdrawals, an account verification is required. Navigate to the platform’s verification centre and follow the steps to complete the account verification.
The KYC verification usually consists of providing legal documents such as government-issued ID cards, passports, and driver’s licenses. For proof of residency, users can submit a utility bill or a simple bank account statement. Some exchanges require the users to send a selfie of themselves while holding a document that reads their home address.
After the ID verification process, you can trade and purchase cryptocurrencies without any limitations. Account verification brings benefits such as better customer support experience and overall better user safety.
After users have complete ID verification, it is time to choose the preferred payment method for the cryptocurrency they wish to buy.
Most of the Australian exchanges, and the ones we’ve listed earlier, accept bank transfers and third-party payment providers such as POLi, BPay, Osko, PayID, etc. PayPal is not very common in Australia’s crypto scene, but some platforms might accept it. These types of payments are usually instantaneous but incur separate trading fees.
You can also buy BTC with other digital assets. For example, if you have 100 XRP tokens, you can convert them to BTC.
You don’t have to purchase a full Bitcoin as every crypto platform sells Bitcoin in fractions. The current price of Bitcoin is pretty steep, and beginners who don’t know how things work might feel discouraged due to the price.
You need to link you digital wallet to the platform in order to purchase BTC with crypto. users
You can also sell Bitcoin this way, either for fiat currency or for crypto. Every exchange has a Buy/Sell prompt. Click on the sell prompt, link your wallet, and choose whether you want to sell for other crypto or for fiat currency.
Alternative Ways to Receive Bitcoin
We’ve explained the simplest methods of buying Bitcoin with fiat or with other cryptos. Now, we’ll touch upon some other ways that don’t involve crypto exchanges.
Crypto mining is a popular way of acquiring Bitcoin but comes at a cost. First of all, users would need to procure powerful hardware in the form of GPUs or Graphical Processing Units. GPUs are essential to mining as they provide the computing power necessary to find the lucky nonce and add transactions to the blockchain.
GPU prices are soaring at the moment, and users would have to pay upwards of $10,000 USD to set up a profitable mining rig. Secondly, Bitcoin mining incurs massive electricity costs. People around the world are prone to stealing electricity in order to generate profits from mining. Legal Bitcoin mining companies usually rely on their own electricity sources such as small windmills, solar panels, and diesel-powered generators. Bitcoin mining might be profitable, but the costs outweigh the gains for a beginner.
Bitcoin faucets are the most novice-friendly methods of acquiring free Bitcoin. They usually come in the form of websites and require users to complete a series of random tasks and receive minimal fractions of Bitcoin as rewards. Faucets were invented in order to spread Bitcoin awareness and in the old days, when the price of Bitcoin was a lot cheaper, they used to leak full bitcoins.
Bitcoin ATMs are ATM machines that allow users to purchase Bitcoin and withdraw it to their personal wallets. These are a great way to purchase Bitcoin with cash, but the fees can eat up 7% to 9% of the initial deposit. There is a live map around Melbourne that shows the location of these Bitcoin ATMs if you want to take a look.
How to Sell Bitcoin in Australia
If you’re a user with a few bitcoins jingling in your digital wallet and want to turn them into fiat, the solution is simple.
First of all, head to a Bitcoin exchange or broker and create an account. Once your account has been created, transfer your bitcoins into the platform’s custodial wallet and simply head to the markets area of the exchange. There you will see the Bitcoin rates against the fiat currencies available on the platform. If everything is in order, select the amount you wish to sell and execute the trade.
If you want to sell or exchange your Bitcoin for other cryptos, the principle is the same, except you have to select the crypto you wish to exchange it for instead of a fiat currency. You will have to pay a transaction fee, and the crypto will appear either in your personal wallet or the exchange’s custodian wallet.
A Few Words Before You Go…
To wrap our guide, we’ll say that buying Bitcoin in Australia is rather easy. There are advanced ways to acquire Bitcoin through OTC desks and various trust funds from trading platforms but our idea for today was to provide a guide to the everyday users and crypto novices.
We’ve shown you what you need to do when you’re choosing an exchange and suggested you use the best and simplest exchanges on the Australian market. We’re confident that you will conduct your first Bitcoin transaction successfully and join millions of users on the blockchain with your newly found knowledge.
frequently asked questions
The simplest way to purchase Bitcoin in Australia is through a cryptocurrency brokerage. As a beginner and a potential investor, you only need to create an account, verify it, and place an order. Crypto brokerages are direct crypto merchants and the only transaction will be between you and the cryptocurrency exchange you’ve chosen.
The answer to this question depends on many factors. The thing with Bitcoin mining is that it has upfront costs. In order to be a relatively successful miner you would need a mining rig. These mining rigs can cost between $2,000 and an unlimited amount of $, and will yield crypto depending on your GPU’s hash rate capabilities. Other than the upfront costs, Bitcoin mining eats up a lot of electricity, which results in high electricity bills.
Purchasing Bitcoin, on the other hand, is a one time investment that can be later used to generate more profits by staking, holding, trading, and other mercantile features. You need to lay a ground plan and do the math before making your decision. For starters, you can check out Bitcoin faucets or start purchasing crypto in fractions.