If you are looking for a simple and quick read on how to buy bitcoin in Australia, this step-by-step guide will help you grasp everything about BTC and how to buy and securely store it.
For buying, we’re inclined towards Swyftx, an online crypto exchange platform with a straightforward user interface, excellent support, and low trading fees. That said, let’s get started:
How to Buy Bitcoin in Australia – Step By Step
The process of buying bitcoin in Australia with Swyftx is pretty straightforward. Below are the steps you need to follow to land those BTCs in your wallet in just a few minutes.
- Sign up on Swyftx by providing your personal details like name, email, address, and so on.\
- Enable the 2FA for security
- Verify your account by providing ID documents to be able to buy BTC
- Now deposit AUD in your Swyftx account using any of their payment methods, including PayID, POLI, Bank Transfer, or Credit Card
- Next, go to the Trade section from your dashboard
- Look for Bitcoin and click on Buy Coin
- Enter the AUD amount or the amount of BTC you want to purchase and click on Buy BTC
That’s it; you should get your BTCs in a few minutes to a few hours, depending on the payment method you choose. If you want to know more about BTC and how to safely store it, read this guide till the end.
So What is Bitcoin Anyway?
If you’re just stepping your toe into the world of cryptocurrencies and feeling a little overwhelmed by the wealth of information, don’t get too confused. Just start by learning about bitcoin, and you’ll be able to make an informed decision regarding its purchase. So Bitcoin, or BTC for short, is a cryptocurrency.
It’s the first digital currency in the world generated and secured using cryptography, which protects plain information by turning it into a highly secure format. This way, no one can access it besides the one who owns the crypto asset.
Bitcoin is a type of electronic cash that you can exchange on a fully decentralized network (for complete anonymity) and store in a digital ledger known as Blockchain.
Some Historical Background of Bitcoin:
Bitcoin was introduced in 2008 when the global financial crisis was at the peak. The first time the name Bitcoin was used on the internet was when a domain called bitcoin.org was registered in August 2008. Then in October 2008, someone with the alias Satoshi Nakamoto (the person’s real identity is still a mystery) published a whitepaper titled Bitcoin: A Peer to Peer Electronic Cash System.
This 9-page document explains how the system behind bitcoin works, starting with an introduction to why a decentralized payment system is needed and how cryptographic proof of work/transaction on a timestamp server can fix the double-spending problem (which is a risk of a digital currency being spent twice because of reproduction of digital information).
Then, later on, in January 2009, Satoshi mined the first bitcoin block named the Genesis Block and sent 10 bitcoins to Hal Finney, who is a cryptographer and an initial investor in bitcoin. Thus, the first-ever bitcoin transaction was completed in January 2009.
The process behind the bitcoin blockchain is simple. Miners spend computational power, mainly derived from graphics cards, to solve complicated algorithmic problems via hash function and adding a timestamp to new solved data. This results in verified transactions that are permanently stored in blocks of data in a blockchain, which is protected from external interventions.
By October 2009, the exchange rate for bitcoin against USD was set by New Liberty Standard, and it was based on the cost of electricity required for mining one bitcoin. At that time, $1 was equal to nearly 2,300 bitcoins – the early investors must have their own islands by now.
In 2011, first-ever crypto exchanges were established, and bitcoin was being traded in high volumes, which kept on driving its price upwards. And in 2021, we saw it hitting an all-time high of above $60,000 USD. Even though its price has slipped down from $60k to the $39k mark at the time of writing this guide, every trader now knows that bitcoin is here to stay and will be a popular investment option in Australia and around the globe.
Why Bitcoin When We Already Have Fiat Currency?
Are you wondering why bitcoin was created when we already have fiat (government-issued) currency? Well, the problem is, these are centralized currencies as they go through financial institutions like banks before landing into the receiver’s account. The problem with this model is extra service fees, loads of taxes, and long waiting times for fund clearance. And that’s just for making payments within a country; making international payments is a lot grimmer.
We’re living in a world where information is sent and received around the globe, even outside of it – from earth to mars (to mars rover) in a few seconds. But when it comes to transferring money across the globe, it takes 4-5 days. Then there are hefty fees to 3rd parties for fund transfers and currency exchanges (for international transfers) – it’s ridiculous.
So how is sending/receiving Bitcoin different?
Glad that you asked this! Firstly, bitcoin transactions take place on a decentralized network that involves peer-peer connections, so having an intermediary like a bank is not required. Next, you don’t have to reveal your identity to make a transaction.
Every user of bitcoin’s blockchain gets an alias known as ‘public key,’ which is an encrypted address based on a series of numbers and alphabets. So the receiver gives his public key to the sender, who then sends bitcoin(s) to that key.
Furthermore, users don’t have to pay hefty service fees because bitcoin transactions incur a very small transaction fee. This tiny fee goes to the miners, so they keep doing their job – to provide computational power to complete transactions. As for the transfer time, unlike banking institutions, where it can take days, bitcoin’s blockchain transactions take only 10 minutes.
How to Securely Store Bitcoins?
Traders and investors buy and sell bitcoins on crypto exchanges in Australia and throughout the world. They either use fiat (government currency) to purchase BTC via an exchange or cryptocurrency to purchase another cryptocurrency like Ethereum to BTC, or vice versa.
Most of these exchange platforms are centralized, which means they keep an eye on users’ transactions and provide escrow services. They either connect the buyers with sellers or act as brokers, directly selling the coins to users at market rates.
Some of the most popular cryptocurrency exchanges in Australia include Swyftx, Independent Reserve, and CoinSpot.
Once you’ve purchased the bitcoins, you will need to store them in a digital wallet, which is an online software wallet that most crypto exchanges or 3rd party platforms offer. We recommend using these wallets just on a temporary basis because you’ll be relying on the security measures of these platforms.
But if you have to keep the coins in the online wallet longer, look for wallet platforms that store your cryptocurrency in cold storage and offer safety features like two factors authentication and address whitelist.
If you want something much safer than online wallets, then purchase a hardware wallet. It is a USB-like device where your private key is stored. Your wallet will stay offline most of the time and will only need to go online when you need to send or receive cryptocurrency. This eliminates the risk of getting your wallet hacked and losing funds.
Some Ways to Purchase Bitcoin Besides Exchanges:
Even though the most popular way to land some BTCs in your wallet is through a centralized online exchange like Swyftx, there are some alternate routes you can take to buy bitcoin in Australia.
Short for peer-to-peer exchanges, P2P is a decentralized way of transferring funds because, unlike exchanges, they don’t store your funds. They just set up an order matching protocol linking buyers and sellers without any intermediary. The transfer of funds between two wallets occurs using smart contracts.
With P2P exchanges, you get more privacy and control over your funds which are the core values of Bitcoin’s philosophy.
Yes, they do exist! Bitcoin ATMs are like ordinary kiosks where you can buy bitcoin like you buy a can of soda from a vending machine. However, most of these machines help you buy BTCs and not sell them. You can use a credit card or cash to purchase bitcoin; that’ll be done by linking you to a marketplace.
Once you make the purchase, the funds will land in your public wallet address. These machines are very useful, especially when you’re travelling and don’t have access to the internet. However, the only drawback with them is a hefty 5% to 10% fee.
You can typically find bitcoin ATMs installed in shopping malls, retail stores, airports, or supermarkets across Australia and other countries. There are websites like Coin ATM Radar that can help you find nearby bitcoin ATMs.
Amazon Gift Cards:
Another way to purchase Bitcoin is by swapping an Amazon Gift Card with an equivalent amount of bitcoins. These cards come in $10, $25, $50, and $100 values, but you also have the option to get a custom price card from $25 to $500.
There are some platforms online allowing you to exchange these cards for Bitcoin; Paxful is one of them.