In this article we shall go over the steps to buy bitcoins using your PayPal account. So without further discussion, let`s dive into the process straight away.
Set Up An Account On PayPal
If you have already got an account on PayPal then you can move on to the next step. If you haven`t then you will first need to set up your PayPal account. Ideally you should do this well before you intend to purchase your bitcoins because the whole process may take a time.
PayPal will require you to provide your identification details and it may take a few days to authenticate your bank accounts that you will connect with PayPal as well. Before starting off, you should also check if PayPal works with your country or not. There are many countries in Asia and Africa where the services of PayPal aren`t present.
Residents of Iran, Iraq, Ivory Coast, Pakistan, Bangladesh, Gabon, Ghana, Haiti, Monaco and Libya etc cannot get their accounts verified on PayPal as their countries do not work with PayPal. Therefore you will need to be in a country that works with PayPal in order to be able to carry out online transactions.
Once you have set up your account you will need to move on to the next step and that step requires choosing between
- Bitcoin exchange
- Peer to Peer platforms
Look For A Bitcoin Exchange
A bitcoin exchange is a place where you can exchange your local currency for bitcoins. However before you can purchase bitcoins you will need to have a bitcoin wallet. Yes, a bitcoin wallet is necessary in order to purchase bitcoins. Where else did you think you were going to keep your bitcoins?
Bitcoins exist in the digital sphere, they are intangible and therefore their wallet is also intangible. A bitcoin or crypto wallet is your wallet where you can keep your crypto currencies. Bitcoin wallets come in different forms.
For beginners you can get an online wallet, sites like Coinbase offer free online bitcoin wallets where you can keep your bitcoins. A bitcoin wallet comes with a public and a private key. The public key is just like your email account, it is what others who want to send or receive bitcoins will use to locate your wallet. Your private key on the other hand is like your password, with the added difficulty of being issued only once. So while you can change your password in case you forget it. You cannot change the private key once you forget it. Furthermore you`ll need your private key every time you make a purchase or accept a payment, this is your personal authentication.
More experienced bitcoin users may opt for a desktop wallet where the wallet will be stored offline on your desktop, although this is safer in the sense that your wallet will be on your desktop, it will still be vulnerable in case your system gets hacked or attacked.
A more safer option is to go for hard ware wallets, these wallets are like a USB or flash drive. They are portable and provide a high degree of security but they have their own vulnerabilities for example hard ware wallets are at risk of being stolen or being lost or misplaced by the owner. Mobile wallets also exist, they are ideal for people who use bitcoins to carry out their daily transactions on the go.
So you will need to have your bitcoin wallet before you can purchase bitcoins. Next up you will need to choose a bitcoin exchange. There are dozens of bitcoin exchanges operational in the market and they offer slightly different terms and conditions because bitcoins do not have any central value. This property of bitcoins by the way allows for arbitrage, you can buy low from one site and sell high on the other.
Anyway, once you have chosen your bitcoin exchange, you will then need to get registered. A few things to remember at this point.
If you live in the United States then you will have to follow the local regulations for the purchase of bitcoins and this means that you will need to get your id verified at the time of registration. Coinbase is a US based bitcoin exchange and one that Americans use a lot. Your id verification on coin base can take anywhere between two to three days.
Once you are verified you will be able to carry out transactions but be careful as you will be tracked. If you are not worried about being tracked or feel like you have nothing to hide then you are fine. Some bitcoin users however take their privacy quite seriously. There are other exchanges like XCOINS that are based out of USA and their registration process is very simple. Read more about bitcoin exchanges that accept PayPal here: https://www.smartbitcoininvestments.com/buy-bitcoin-with-paypal/
Once your account is set up you will need to connect your PayPal account to the bitcoin exchange. In order to do this you will have to go to the Payments page and then choose PayPal as your payment option and then you will simply need to link your account.
Once your account is linked, you can go to the transactions page and carry out your first purchase of bitcoins through your PayPal account.
A Word On Peer-To-Peer Platforms
Most bitcoin users who prefer their privacy over cost tend to use P2P platforms to trade bitcoins. P2P platforms are non regulated platforms that simply serve as an online market place to connect crypto buyers and sellers. It may be difficult to find a P2P platform that allows you to carry out transactions using PayPal. Local Bitcoins is one such platform, however this doesn`t mean that you can use PayPal account yet.
First you will need to confirm with your seller if he/she is willing to take the payment through PayPal. Some sellers don`t accept it while others will. So once you get a seller who is happy with PayPal payments, then you can purchase the required bitcoins and pay through Paypal. As simple as that!