galway_blow_in
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I've zero interest in buying bitcoin but how do you even aquire it?
Are there ETF, s which track that market?
Are there ETF, s which track that market?
Key Post How do I actually buy Bitcoin?
- Thread starter galway_blow_in
- Start date
Brendan, this isn't all that you asked for but it's a start. I'll try and come back again and do a separate post on crypto storage/scam avoidance. As regards the options below, I have not lived in Ireland for a couple of years now, so I have a different set of options open to me. I have not used all of the options listed below (or used them recently) so others may be able to give better feedback and we can wiki this up with greater accuracy.
Buying via crypto exchange
You can purchase Bitcoin via the crypto spot exchanges such as Bitstamp, https://www.kraken.com/ (Kraken) and (among others). If you open an account with Coinbase, upgrade the account to Coinbase Pro to avail of lower fees.
By and large, SEPA transfer in/out is needed.
You *can leave crypto on account with the exchange. However, there is no guarantee in the case of the exchange going bust or being hacked that you’ll be left with your crypto afterwards. On that basis, crypto should be transferred in and out - just at the times you plan on selling/buying. It's a case of 'not your keys, not your coins'. There are a number of ways you can self custody your crypto. If it’s a significant amount that’s at stake, its something that you have to invest some time into getting a better understanding of.
Buying from an Irish exchange
The crypto space is now dominated by large international players and that’s where the bulk of the trade happens - with the sector continuing to consolidate. If you feel more comfortable with buying from an irish exchange, try Cork-based Bitcove.ie . They have a non-custodial business model so they’re not going to lose your crypto. However, you will need to take responsibility for storing - so you’ll need to understand how to go about that.
My understanding is that purchase is via SEPA transfer. They have to use overseas banking as one by one, the irish banks pulled the carpet out from under them.
Buying with credit card
You can buy Bitcoin with a credit card through exchanges such as Coinbase and Bitpanda and usually the app based offerings (see below). Whilst you can get your hands on your crypto faster this way, the fees are much higher.
Buying via ATM
Bitcove (and others) have established a few Bitcoin ATMs in Ireland. ATMs generally are not going to be an option for investment purposes as rates naturally won’t be comparable with other means. However, it’s a good option for someone that wants to simply buy €50 worth of Bitcoin - simply to get used to working with a digital currency and to learn about it.
This site tracks crypto ATMs worldwide (may not be 100% up to date as I think there’s one or two missing from that irish map).
Buying via App
Revolut: Revolut support Bitcoin purchase (for premium account holders). However, you don’t get a crypto wallet and you can only buy (and not sell) Bitcoin. My understanding is that rates won’t be the best - this is not going to be a competitive means of sourcing Bitcoin. Furthermore, you can send it to other Revolut users but can’t sell it - so it’s a very limited offering. Additionally, there’s no guarantee in place that covers their storage of your crypto.
Abra: The app allows you to buy/sell/store/invest in crypto and traditional stocks. Through Abra, you can buy crypto via credit card - as well as SEPA transfer.
Buying via ‘Crypto Banks’
Bitwala: One of the first ‘crypto banks’ has opened in the form of Berlin-based ‘Bitwala’. It facilitates regular banking - with the ability to buy/sell crypto alongside your conventional euro account. The bank guarantee applies to your Euro. Insofar as I’m aware, there’s no such guarantee on their storage of your crypto. App based banking/trading is provided.
Other options developing or already available on that integrated banking theme include Wirex and Bankera. It’s early days but we can expect this to develop further (particularly offering crypto storage and guarantees in the fullness of time…as self custody is not for everyone).
Peer to Peer Purchase
Local Bitcoins: Local Bitcoins has been the main P2P marketplace for Bitcoin for a number of years. Buyers are paired with sellers and a reputation system is used. Crypto can be purchased via bank transfer and the marketplace runs an escrow system to protect buyer and seller.
It used to facilitate those that didn’t want to go through KYC/AML but that’s changed since last year. It used to be possible to find sellers and pay in cash. Naturally this comes with risks.
Bitcoin Futures/Options
(* I can't say for sure if these are all available in Europe nor do I have any experience with derivatives).
OKEx
Bakkt
Deribit
FTX
Bitmex
Bitcoin ETF
The subject of much speculation over the past couple of years, as yet the SEC has not approved a Bitcoin ETF in the US despite ongoing applications from VanEck, Bitwise, SolidX, The Winklevoss twins' Bitcoin Trust and others. Probably unlikely to see approval in the short term.
GBTC
It's not strictly an ETF but investors can get exposure to Bitcoin via without having to mess about with crypto exchanges. However, it does trade at a premium and there are annual fees.
Buying via crypto exchange
You can purchase Bitcoin via the crypto spot exchanges such as Bitstamp, https://www.kraken.com/ (Kraken) and (among others). If you open an account with Coinbase, upgrade the account to Coinbase Pro to avail of lower fees.
By and large, SEPA transfer in/out is needed.
You *can leave crypto on account with the exchange. However, there is no guarantee in the case of the exchange going bust or being hacked that you’ll be left with your crypto afterwards. On that basis, crypto should be transferred in and out - just at the times you plan on selling/buying. It's a case of 'not your keys, not your coins'. There are a number of ways you can self custody your crypto. If it’s a significant amount that’s at stake, its something that you have to invest some time into getting a better understanding of.
Buying from an Irish exchange
The crypto space is now dominated by large international players and that’s where the bulk of the trade happens - with the sector continuing to consolidate. If you feel more comfortable with buying from an irish exchange, try Cork-based Bitcove.ie . They have a non-custodial business model so they’re not going to lose your crypto. However, you will need to take responsibility for storing - so you’ll need to understand how to go about that.
My understanding is that purchase is via SEPA transfer. They have to use overseas banking as one by one, the irish banks pulled the carpet out from under them.
Buying with credit card
You can buy Bitcoin with a credit card through exchanges such as Coinbase and Bitpanda and usually the app based offerings (see below). Whilst you can get your hands on your crypto faster this way, the fees are much higher.
Buying via ATM
Bitcove (and others) have established a few Bitcoin ATMs in Ireland. ATMs generally are not going to be an option for investment purposes as rates naturally won’t be comparable with other means. However, it’s a good option for someone that wants to simply buy €50 worth of Bitcoin - simply to get used to working with a digital currency and to learn about it.
This site tracks crypto ATMs worldwide (may not be 100% up to date as I think there’s one or two missing from that irish map).
Buying via App
Revolut: Revolut support Bitcoin purchase (for premium account holders). However, you don’t get a crypto wallet and you can only buy (and not sell) Bitcoin. My understanding is that rates won’t be the best - this is not going to be a competitive means of sourcing Bitcoin. Furthermore, you can send it to other Revolut users but can’t sell it - so it’s a very limited offering. Additionally, there’s no guarantee in place that covers their storage of your crypto.
Abra: The app allows you to buy/sell/store/invest in crypto and traditional stocks. Through Abra, you can buy crypto via credit card - as well as SEPA transfer.
Buying via ‘Crypto Banks’
Bitwala: One of the first ‘crypto banks’ has opened in the form of Berlin-based ‘Bitwala’. It facilitates regular banking - with the ability to buy/sell crypto alongside your conventional euro account. The bank guarantee applies to your Euro. Insofar as I’m aware, there’s no such guarantee on their storage of your crypto. App based banking/trading is provided.
Other options developing or already available on that integrated banking theme include Wirex and Bankera. It’s early days but we can expect this to develop further (particularly offering crypto storage and guarantees in the fullness of time…as self custody is not for everyone).
Peer to Peer Purchase
Local Bitcoins: Local Bitcoins has been the main P2P marketplace for Bitcoin for a number of years. Buyers are paired with sellers and a reputation system is used. Crypto can be purchased via bank transfer and the marketplace runs an escrow system to protect buyer and seller.
It used to facilitate those that didn’t want to go through KYC/AML but that’s changed since last year. It used to be possible to find sellers and pay in cash. Naturally this comes with risks.
Bitcoin Futures/Options
(* I can't say for sure if these are all available in Europe nor do I have any experience with derivatives).
OKEx
Bakkt
Deribit
FTX
Bitmex
Bitcoin ETF
The subject of much speculation over the past couple of years, as yet the SEC has not approved a Bitcoin ETF in the US despite ongoing applications from VanEck, Bitwise, SolidX, The Winklevoss twins' Bitcoin Trust and others. Probably unlikely to see approval in the short term.
GBTC
It's not strictly an ETF but investors can get exposure to Bitcoin via without having to mess about with crypto exchanges. However, it does trade at a premium and there are annual fees.
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Bitcoin 'storage' and security
Every Bitcoin address has a matching private key. Possession of that key allows cryptocurrency in that address to be spent. For ease of use, it’s represented by a 24 word mnemonic seed recovery phrase. As with the raw key, possession of the seed recovery phrase is equivalent to having control over the Bitcoin held within the wallet. ‘Not your keys, not your coins.’ It can’t be shown to anyone - it must remain secret. I use the word 'storage' but be aware that your actual coins are on the blockchain itself.
Storage via a mobile wallet
Mobile wallets can be used to store your Bitcoin and the associated private key. However, these are ‘hot wallets’ - connected to the internet. Such wallets hold the private key - and potentially, they can be hacked. They should only be used to hold small amounts of cryptocurrency - for use out and about. For this purpose, they’re useful as they support QR codes - allowing for quick and seamless transactions.
Storage via a crypto exchange
The vast majority of ordinary people buy and sell cryptocurrency via cryptocurrency exchanges. Cryptocurrency exchanges store your crypto on their platform when you buy it. You should move it out immediately after buying it.
Many people leave their cryptocurrency on the exchange but it’s risky. The crypto exchange business is going through an iterative process of becoming more professional and secure, providing more robust platforms. However, they remain a very hot target for hackers.
There’s no guarantee of being made good on your funds if the exchange is hacked or goes bust.
Storage via a hardware wallet
A hardware wallet is a secure hardware device which stores the user’s private keys. Hardware wallets cost around €50. By and large, private keys cannot be transferred out of the device - they’re stored within a protected area of a micro-controller. Unlike software wallets, they’re immune from viruses. The most common examples include Trezor, Ledger and KeepKey,
Hardware wallets are not the silver bullet as far as security is concerned. That said, they’ve performed well so far with limited evidence of compromised security. If you use one, make sure its shipped directly from the manufacturer. When you connect one to a computer, the device itself can’t account for malware on your computer that could swap out the recipient Bitcoin address when making a transfer. You need to always double check the address before confirming the transaction (and most of these devices make you go through that process).
If your hardware wallet is damaged, you can recover your crypto so long as you have the 24 word seed recovery passphrase. If your hardware wallet is lost or stolen, there is a low risk that an experienced hacker could hack the device and extract the passphrase. In those circumstances, you should recover your crypto-assets to a new device as soon as possible to limit the risk further.
24 word recovery seed passphrase storage
Memorise the passphrase.
This might seem like a smart idea from the point of view of not having it written down anywhere for someone else to find it. It also means you could cross a border and the key to your wealth is simply in your head (you can restore your crypto hardware wallet to a new hardware wallet device using the recovery phrase). There’s nothing to confiscate.
On the flip side, there’s no 1-800 number to call if you forget the passphrase. Secondly, if it was known that you’re worth your weight in crypto, you could be targeted and the passphrase ‘persuaded’ out of you (unlikely - but it has happened!…naturally to people with a high net worth in crypto).
Write down the passphrase.
You can write down the passphrase and keep it somewhere safe. As in - in a safe most likely. A couple of things here. You have to consider if the safe is fireproof. Will the ink fade over time, etc? A workaround could be to have two copies in two locations. However, naturally, you have to consider security in both instances. Another option is to have it tapped out on a metal plate.
Storing Electronically
Do NOT store your passphrase electronically - in a word document or excel sheet or email. Electronic data can be hacked.
* We've all been conditioned to have our wealth stored centrally via banks. It's hard to get out of that mindset but with crypto you have to. It's a case of personal responsibility as if you get this wrong, there's no 1-800 number to call. The silver lining is that once you have confidence in storing securely, nobody can confiscate your crypto regardless of the circumstances. There's a lot of work being done on this aspect of things - to safeguard the user and improve the UX.
Every Bitcoin address has a matching private key. Possession of that key allows cryptocurrency in that address to be spent. For ease of use, it’s represented by a 24 word mnemonic seed recovery phrase. As with the raw key, possession of the seed recovery phrase is equivalent to having control over the Bitcoin held within the wallet. ‘Not your keys, not your coins.’ It can’t be shown to anyone - it must remain secret. I use the word 'storage' but be aware that your actual coins are on the blockchain itself.
Storage via a mobile wallet
Mobile wallets can be used to store your Bitcoin and the associated private key. However, these are ‘hot wallets’ - connected to the internet. Such wallets hold the private key - and potentially, they can be hacked. They should only be used to hold small amounts of cryptocurrency - for use out and about. For this purpose, they’re useful as they support QR codes - allowing for quick and seamless transactions.
Storage via a crypto exchange
The vast majority of ordinary people buy and sell cryptocurrency via cryptocurrency exchanges. Cryptocurrency exchanges store your crypto on their platform when you buy it. You should move it out immediately after buying it.
Many people leave their cryptocurrency on the exchange but it’s risky. The crypto exchange business is going through an iterative process of becoming more professional and secure, providing more robust platforms. However, they remain a very hot target for hackers.
There’s no guarantee of being made good on your funds if the exchange is hacked or goes bust.
Storage via a hardware wallet
A hardware wallet is a secure hardware device which stores the user’s private keys. Hardware wallets cost around €50. By and large, private keys cannot be transferred out of the device - they’re stored within a protected area of a micro-controller. Unlike software wallets, they’re immune from viruses. The most common examples include Trezor, Ledger and KeepKey,
Hardware wallets are not the silver bullet as far as security is concerned. That said, they’ve performed well so far with limited evidence of compromised security. If you use one, make sure its shipped directly from the manufacturer. When you connect one to a computer, the device itself can’t account for malware on your computer that could swap out the recipient Bitcoin address when making a transfer. You need to always double check the address before confirming the transaction (and most of these devices make you go through that process).
If your hardware wallet is damaged, you can recover your crypto so long as you have the 24 word seed recovery passphrase. If your hardware wallet is lost or stolen, there is a low risk that an experienced hacker could hack the device and extract the passphrase. In those circumstances, you should recover your crypto-assets to a new device as soon as possible to limit the risk further.
24 word recovery seed passphrase storage
Memorise the passphrase.
This might seem like a smart idea from the point of view of not having it written down anywhere for someone else to find it. It also means you could cross a border and the key to your wealth is simply in your head (you can restore your crypto hardware wallet to a new hardware wallet device using the recovery phrase). There’s nothing to confiscate.
On the flip side, there’s no 1-800 number to call if you forget the passphrase. Secondly, if it was known that you’re worth your weight in crypto, you could be targeted and the passphrase ‘persuaded’ out of you (unlikely - but it has happened!…naturally to people with a high net worth in crypto).
Write down the passphrase.
You can write down the passphrase and keep it somewhere safe. As in - in a safe most likely. A couple of things here. You have to consider if the safe is fireproof. Will the ink fade over time, etc? A workaround could be to have two copies in two locations. However, naturally, you have to consider security in both instances. Another option is to have it tapped out on a metal plate.
Storing Electronically
Do NOT store your passphrase electronically - in a word document or excel sheet or email. Electronic data can be hacked.
* We've all been conditioned to have our wealth stored centrally via banks. It's hard to get out of that mindset but with crypto you have to. It's a case of personal responsibility as if you get this wrong, there's no 1-800 number to call. The silver lining is that once you have confidence in storing securely, nobody can confiscate your crypto regardless of the circumstances. There's a lot of work being done on this aspect of things - to safeguard the user and improve the UX.
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Brendan Burgess
Founder
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- 54,788
tecate
That is brilliant - thanks.
I have deleted the first few "chatty" responses.
I have made this a Key Post.
Brendan
That is brilliant - thanks.
I have deleted the first few "chatty" responses.
I have made this a Key Post.
Brendan
Not sure if this is the best thread to use - Brendan, feel free to move.
The OCC (US banking regulator) has issued an interpretative letter which essentially approves standard custodians to hold crypto currency for clients. While many are probably not in a position to offer this yet, it could eventually offer more mainstream methods of holding crypto in the same accounts as an investor holds other assets.
[broken link removed]
The OCC (US banking regulator) has issued an interpretative letter which essentially approves standard custodians to hold crypto currency for clients. While many are probably not in a position to offer this yet, it could eventually offer more mainstream methods of holding crypto in the same accounts as an investor holds other assets.
[broken link removed]
Indeed it has. Here's a take on the decision by Peter Van Valkenburgh of Coin Center.
The banks are likely to partner with Coinbase Custody, Bakkt, Fidelity Digital and Bitgo - who have all put in the early work on crypto custody. Crypto lending/savings enterprises such as BlockFi, Nexo, etc. will likely be targeted for acquisition.
The banks are likely to partner with Coinbase Custody, Bakkt, Fidelity Digital and Bitgo - who have all put in the early work on crypto custody. Crypto lending/savings enterprises such as BlockFi, Nexo, etc. will likely be targeted for acquisition.
German bank Bitwala offer a version of this already. The difference is that whilst crypto sits alongside euro in your account, the crypto aspect is non-custodial (i.e. the customer still holds the private keys). German banks were authorised to sell/store cryptocurrency late last year. In Switzerland, crypto bank SEBA has been operational since late 2019 and custodies crypto on behalf of customers.
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I'm not sure. The mainstream custodians are likely to take it in house rather than appoint the likes of Coinbase or Fidelity. The issue being they assume liability for appointment of agents and probably won't want to take that for many of the entities mentioned above. State Street are probably further along than many others
More likely might be absorption of Fintech technology companies and in-house maintainence of key security
@EmmDee : I guess that will become clear over the course of the next year. Bear in mind crypto custody comes with greater risk - traditional banks may not want to build that up from scratch themselves. Here's a good industry insight from Caitlin Long on the announcement. Long is in the process of establishing a crypto bank in Wyoming after the state passed a raft of crypto-friendly laws.
The other aspect to this is that fintech and crypto payment companies are now free to pursue a federal banking charter and compete against traditional lenders and banks.
The other aspect to this is that fintech and crypto payment companies are now free to pursue a federal banking charter and compete against traditional lenders and banks.
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DublinHead54
Registered User
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- 1,090
HODL
I'm familiar with traditional banks, their risk appetite, the advisory process with the OCC and what it takes to get and keep a federal banking charter.
I think there is a longer timeframe than a year to really see where this ends up
Here is Caitlin Long's (Avanti Bank) take on the decision with her initial reaction in short form here.
Avanti isn't the same as a full service bank and doesn't fall under the full federal requirements. It's limited in terms of services and activities it can provide and isn't required to comply with Federal Deposit Insurance. It's more like a special purposes bank license.
My comment on the longer timeframe related to the leading custodians who also service full custody requirements - State Street, BoNY, JPM, Citi etc. While Avanti (or similar) might be in the market earlier, it won't have a chance with large mandates if the large banks get involved. It might target the retail type market though and do better there. But large asset management mandates won't take the risk - lack of capital
Avanti was going ahead anyway. My understanding is that it will have a state banking license as opposed to a national banking license implicated by the OCCs interpretive letter. It's going to operate on the back of Wyoming's Special Purpose Depository Institution (SPDI) laws which Long had a hand in helping Wyoming put together. It was more her take on this development ref. the OCC that I was pointing to - rather than any implications for her bank. This Wyoming SPDI approach seems to be quite unconventional relative to normal banking practice as there's a 'proof of reserve' aspect baked in to it alongside a prohibition on rehypothecation.
In that discussion, she's on record as stating that Avanti will chase institutional investment rather than retail. I guess that makes sense given her background (she ran Morgan Stanley's pensions business for 10 years).
Up until now, one of the very few banks to bank the crypto sector in the US has been Silvergate Bank.
In that discussion, she's on record as stating that Avanti will chase institutional investment rather than retail. I guess that makes sense given her background (she ran Morgan Stanley's pensions business for 10 years).
Up until now, one of the very few banks to bank the crypto sector in the US has been Silvergate Bank.
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