/btc was created to foster and support free and open Bitcoin discussion, Bitcoin news, and exclusive AMA (Ask Me Anything) interviews from top Bitcoin industry leaders! Bitcoin is the currency of the Internet. A distributed, worldwide, decentralized digital money. Unlike traditional currencies such as dollars, bitcoins are issued and managed without the need for any central authority whatsoever.
Bitcoin Cash (BCH) brings sound money to the world. Merchants and users are empowered with low fees and reliable confirmations. The future shines brightly with unrestricted growth, global adoption, permissionless innovation, and decentralized development. All Bitcoin holders as of block 478558 are now owners of Bitcoin Cash. All Bitcoiners are welcome to join the Bitcoin Cash community as we move forward in creating sound money accessible to the whole world.
Bitcoin mining is analogous to the mining of gold, but its digital form. The process involves specialized computers solving algorithmic equations or hash functions. These problems help miners to confirm blocks of transactions held within the network. Bitcoin mining provides a reward for miners by paying out in Bitcoin in turn the miners confirm transactions on the blockchain. Miners introduce new Bitcoin into the network and also secure the system with transaction confirmation.
ArcaneWharf submitted by
and I have put this post together quickly so that we have a resource which we can point newcomers towards in order to answer their frequently answered questions. This should serve as more of an overview or quick-start guide which is a jumping off point for beginners, rather than a comprehensive or complete guide.
This is a work-in-progress (i.e., definitely
not perfect) which, as a community, we could expand and improve upon over time. If you have something to contribute (either to this or something more detailed), do comment in this thread or contact the mods (by sending a message to /BitcoinUK
How can I learn more about bitcoin?
There are already some links in /BitcoinUK
’s sidebar which should help you get started. If that’s not enough, check out:
We'd encourage you to at least
understand the basics before making your first bitcoin purchase. There are tons of fantastic resources out there, so there’s no excuse for ignorance.
How do I buy bitcoin?
The answer depends on your priorities, as there tends to be a trade-off between more convenient, quicker options (which are more expensive) and less convenient, slower options (which are cheaper).
Purchasing with a credit or debit card on Coinbase is the best starting point for beginners, as it offers a great user experience. There's a quick guide here
, but you probably won't need it as the sign-up and purchase process is quite intuitive. If you're having issues with verification on Coinbase (or it's just taking too long), then you might want to check out the options described in the ‘high fees, but faster’ section below.
For subsequent purchases, check out the options described in the next two sections. Although the ‘no fees, but slower’ purchase route is popular and well recommended on /BitcoinUK
, you shouldn’t automatically rule out the options described in the ‘high fees, but faster’ section.
No fees, but slower
The Revolut to GDAX route is frequently recommended in the /BitcoinUK
community, as it eliminates fees and allows you to purchase bitcoin at the best possible price. Keep in mind that this route won’t work on weekends, as SEPA transfers only get pushed through during normal working hours (i.e., Monday AM till Friday PM). If you’re looking to purchase on weekends, then you’ll have to use the options described in the following section.
You can finds details about this purchase route in this text guide
and this video guide Summary of this process:
- Sign up for Coinbase and Revolut.
- Transfer GBP into your Revolut GBP account.
- Activate your EUR wallet
- Convert GBP to EUR in Revolut (FREE)
- Send EUR to Coinbase (FREE)
- Transfer EUR from Coinbase to GDAX (FREE)
- Buy bitcoin on the BTC/EUR market.
High fees, but faster
If you’re willing to pay a premium (i.e., pay above market-rate), then you can buy bitcoin quickly and conveniently with GBP UK bank transfers and debit/credit card purchases. The premium charged by these options is usually under 5%, but can extend beyond that during times of high demand and (positive) price volatility. Unlike the Revolut to GDAX route, these options also allow you to complete purchases on weekends.
Popular, frequently recommended options which are quick and convenient include:
Prices offered across these services vary day-to-day. For an overview of your options (and their relative competitiveness), you should check out BittyBot.co
. This provides a full list of merchants and marketplaces available, ordered by price (cheapest first). You can also filter the output by payment method by typing it into the 'Search' box.
Some users may prefer to take this faster route if they are convinced the price of bitcoin will increase during the time it would take for a transfer to process from Revolut to GDAX (using the method detailed in the previous section). This can pay off, but be cautious
. The volatility of bitcoin makes it a double-edged sword and its price could just as easily go down (drastically) as it could go up.
What's the best way to sell bitcoin?
You can sell bitcoins back to the majority of sites which you buy them from. As before, there's a trade-off between the quicker and slower options.
If you're looking to get a price which is closest to the market rate (and pay as few fees as possible), then you'll want to sell through an exchange like GDAX, exchanging your bitcoin for euros. GDAX is preferable when you're selling, as the price you'll get per bitcoin is higher. Essentially, just reverse the process detailed earlier in the FAQ (see this text guide
or this video guide
). Alternatively, check out this quick 3-minute video
which walks you through the process. Summary of this process:
- On GDAX, click ‘Withdraw Funds’ while in the EUBTC market
- Transfer to your Coinbase Account (FREE)
- Go to Coinbase > Accounts > Euro Wallet > Withdraw
- On Revolut, go into your Euro wallet > Top Up > Bank Transfer > EUR
- Note down the IBAN and BIC from Revolut, and enter them into Coinbase. Also include the amount you wish to withdraw.
- Withdraw funds into Revolut (15p charge)
- Once funds are in your Revolut EUR account, exchange from EUR to GBP (FREE)
- Go to GBP wallet > send funds. Add yourself as a beneficiary.
- Send the funds! (free)
If you sell bitcoin on Localbitcoins
, etc., you can get it sorted same-day (usually in less than an hour) with a transfer directly to your UK bank account in GBP. For that convenience, you'll usually get offered an exchange rate which is below the market-rate (usually up to 5%, but sometimes more). You are able to set your own sell orders on Localbitcoins or BitBargain (so you’ll be able to sell above market rate). However, we would not
advise doing this as a newcomer.
Of course, you could always just withdraw directly from an exchange to your UK bank account. Again, you'll lose a percentage of your funds (>1%) in the foreign exchange conversion (from EUR to GBP) which your bank processes. Depending on the exchange rate charged by your bank, you might be better off selling through services which allow you to cash out in GBP instead.
How should I store bitcoin?
To simplify quite a broad topic, you essentially have two options: hot or cold.
A hot wallet is any wallet that is connected to the internet. Typically this will be in the form of a desktop program or a mobile app. Hot wallets rank high in convenience, but are not
suitable for large holdings. They are extremely vulnerable to malware and backdoors, with hackers having strong financial incentives to target desktop wallets. Nevertheless, they are perfectly reasonable for storing small amounts of cryptocurrency.
Some popular options:
- Electrum: Open source, available on desktop and mobile, but more complicated.
- Breadwallet: Simple and beginner friendly mobile wallet.
- Greenbits: Simplified version of GreenAddress which is SegWit enabled. Only available on Android.
- Exodus: Supports multiple cryptocurrencies, great user interface, and is suitable for beginners.
A cold wallet is a wallet that does not connect to the internet, and therefore cannot be affected by malware. There are multiple forms of cold storage, but beginners should first consider a hardware wallet.
A hardware wallet is a small, USB device where you can keep your cryptocurrency. They are secure since all of the information is stored on the device, so you could plug it in to a computer riddled with malware, and the malware would have no way of interacting with your wallet. These generally aren’t considered as secure as cold-storage wallets, but are much
better than a hot-wallet. Usage just requires plugging the hardware wallet into your computer.
One drawback of a hardware wallet is the cost (£70-100). Although not a mandatory purchase, it is strongly recommended that you purchase a hardware wallet if you've accumulated (or plan to accumulate) coins which are worth more than between £500 - £1000.
Popular, well-recommended options include the:
Both are reputable and will serve you well. At the time of writing this, the Ledger is slightly cheaper and offers support for more cryptocurrencies. Unless you need the greater cryptocurrency support, the choice between them doesn’t really matter.
For an overview of the Ledger Nano S (with security recommendations and a small FAQ) see this post
. For a tutorial on setting it up, check out this video
For a more information on different wallets, check out:
When setting up a wallet, it’s advisable to not
record your mnemonic seed (which allows you to restore the wallet) on a digital device. Instead, it’s recommended to record it (clearly) on paper or card.
Why can't I just leave my bitcoin in the exchange?
When you buy bitcoin on an exchange (such as GDAX), the bitcoin is in your account but
still belongs to the company who runs the exchange. Until you withdraw to your own wallet (as described above), the bitcoin is not truly yours. The bitcoin does not belong to you unless you own the private key.
This is very important. Do not leave large amounts of cryptocurrency in an exchange.
Even if you trust that the company won’t run off with your bitcoin, an exchange is much more prone to getting hacked. Think about it from the perspective of a hacker: would you rather target a million individual users who only own a small amount of bitcoin each? Or would you target one exchange that you know is holding unfathomably large amounts of bitcoin? Don’t believe me?
If you're purchasing through Coinbase, you can withdraw cryptocurrencies through GDAX (same company) to your own wallet for free
. Check out this how-to post
Should I buy at £x price? No one
can tell you this. No one really knows what bitcoin will do in the future. Please do your own due diligence and consider dollar cost averaging.
What about Revolut’s in-app cryptocurrency offer?
Revolut is a mobile banking app that has recently announced support for cryptocurrencies. Note this section only refers to their service that allows you to buy cryptocurrencies within their application - not the process detailed above.
While more mainstream adoption is good, Revolut’s in-app cryptocurrency exchange - in its current state - does not allow you to withdraw your cryptocurrency from their application
. This has all the same issues as leaving in exchange, as you don’t have the cryptocurrency in your own wallet.
Revolut’s in-app cryptocurrency exchange should be rolled out to all customers, if their FAQ is still accurate, by the 21st or 22nd December. Early access is available if you have premium or invite 3 friends who subsequently sign up and use their app. See here for more details.
How do UK taxes work with bitcoin? Please note:
This is not
professional tax advice. Conduct your own research to verify this information and/or contact a professional tax advisor.
If you sell bitcoins at a higher price than you bought them for, or exchange them for something else (e.g., another cryptocurrency, and goods or services), you would be liable to pay capital gains tax
. However, you have a capital gains allowance of £11,300 per year
. If you generate profits from the sale or exchange of bitcoins which fall below this threshold, then no tax would be due. Additionally, no tax is due until you sell or exchange it for something else. You may also be able to reduce your capital gains liability by gifting cryptocurrencies to your partner so that they can take advantage of their capital gains allowance too (more details in this thread
It appears unclear how you would be taxed in the UK in other circumstances: such as mining, working for cryptocurrency, or proof of stake rewards. As these rules develop, it’s advised to document everything
you do with cryptocurrencies. When the taxman comes knocking, you’ll be grateful that you did. IndeedHowlandReed
has kindly putting together a more detailed guide about Bitcoin and UK tax. You can find part 1 here
and part 2 here
. If you have any questions not answered by their guide, post them in this thread
(or upvote existing questions). Useful Links:
Have a question that’s not here? Search /BitcoinUK first.
If you don’t find the answer to your question here, please search this subreddit before submitting a new post
Have a contribution or suggestion?
As noted at the start, this is a WIP
(i.e., it's definitely not perfect) which, as a community, we could expand and improve upon over time. If you have something to contribute (or even just a suggestion), do comment in this thread or contact the mods.
Bitcoin wallets comparison. Important alert: if you buy Bitcoin at Coinbase – they store it for you in a wallet where you DO NOT control private keys. Basically, they own the Bitcoin you bought until you transfer it away. Same with other exchanges like Bittrex, Bitfinex, Poloniex, etc. – they use their own wallets for any transactions, so Best Bitcoin Hardware Wallets with Comparison Chart Many speculate Bitcoin would be the traditional global currency in the next couple decades, and Hardware wallets would be their “Vaults”. So here we bring forth this Best Bitcoin hardware wallets out to you folks for the time when and if it happens. 4. Bitcoin Core – A full Bitcoin node. Platforms: Mac OS, Linux, and Windows. All of the wallets I’ve covered so far are known as SPV wallets or lite wallets. This means that they don’t have a full copy of the blockchain in order to verify transactions – they rely on other computers on the network to give them transaction information.. Bitcoin Core is a full node Bitcoin wallet. What is a Bitcoin Wallet? A Bitcoin wallet is simply a vault where Bitcoins can be stored. The vault could either be in form of a software or hardware. Technically, it should be understood that Bitcoins are not actually stored in the vault, but there is a private key (secret number) for every Bitcoin address that is saved in the Bitcoin wallet of the person who owns the balance. Check out this Cryptocurrency Wallet List to compare and review the largest bitcoin wallets or find the best altcoin wallet. Characteristics Functionality Name Cryptos Security Anonymity Ease of Use Buy & Sell Vouchers & Gift Cards Debit Card Platforms User Score Ledger Nano S 733
There are many Bitcoin hardware wallets & Ethereum hardware wallets out there available on the market these days and all of them have a few different features. Many brands have introduced these ... If your looking for the best Bitcoin wallet for IOS / Iphone In 2020 check out Coinbase. Category Science & Technology; ... The Ultimate iPhone Comparison. - Duration: 24:02. Guide to the Best Bitcoin Wallets of 2019 - Duration: 35:08. David Caruana - Investing 30,327 views. 35:08. Top 5 De-Fi Coins (Your Best Chance to Retire) - Duration: 11:30. Bitcoin Magazine writer Vlad Costea reviews the top bitcoin hardware wallets and gives us his take on which you should buy.-----For more find us on: Bitcoin Software Wallets - available for desktop and mobile devices, you must download a software client to create the actual bitcoin wallet. For this check out: BitcoinCore, MultiBit, Armory ...