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Key Points

  • Exchanges are the most common way to buy bitcoin, but not all provide true ownership
  • Security exists on a spectrum from basic exchange custody to full self-custody
  • Start small and verify everything twice while learning

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Where to Buy Bitcoin

The cryptocurrency industry has matured significantly over the past decade. Today, there are several ways to acquire bitcoin, but it’s crucial to understand that not all methods give you true ownership of your bitcoin.

  1. True Bitcoin Ownership Methods - The Way To Go

    a) Withdrawal-Enabled Exchanges

    • Allow withdrawal of actual bitcoin
    • You get real bitcoin you can move to your wallet
    • Full control over your assets
    • Low trading fees
    • Crypto-native
    • Examples: Kraken, Binance, Coinbase

    b) Recurring Buy Services

    • Automatic regular bitcoin purchases
    • Direct withdrawal to your wallet
    • Dollar-cost averaging made easy, prevents FOMO and ignores market volatility
    • Examples: PocketBitcoin, Relai

    c) Direct Methods

    • Bitcoin ATMs (convenient but higher fees)
    • Peer-to-peer platforms
    • Getting paid in bitcoin for work
    • Local bitcoin meetups

  2. Bitcoin Price Exposure Only - Not Real Bitcoin

    a) Brokers Platforms

    • Charge high fees
    • Don’t allow bitcoin withdrawals
    • Only sell you an IOU (“I Owe You”), you never own actual bitcoin
    • Examples: Revolut, PayPal, Banking apps, etc.

    b) Bitcoin ETFs

    • Trade on traditional stock markets and only track bitcoin’s price
    • No ability to withdraw actual bitcoin
    • Controlled by financial institutions

Remember: Bitcoin was created to give people financial sovereignty - the ability to truly own and control their money without intermediaries. When you buy through methods that don’t allow withdrawals, you’re missing the fundamental value proposition of Bitcoin as outlined in Satoshi Nakamoto’s original proposal. If you want to truly own your bitcoin, you need to use a method that allows you to withdraw your bitcoin to your own wallet and you need to control your keys.

“Trusted third parties are security holes.” — Nick Szabo - Satoshi Nakamoto Institute

This article is part of our educational series on cryptocurrency. For more guides on protecting your digital assets, explore our other articles on best practices and security concepts.