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How to Buy Bitcoin Cash. Beginners’ Guide
How to buy Bitcoin Cash, how to claim Bitcoin Cash, list of exchanges, buy bitcoin cash peer to peer
So, you decided to invest in Bitcoin Cash (BCH). There are a few options available to you, but first you will need to get yourself a wallet that supports Bitcoin Cash. There are many different options available, all of which are covered in our BCH wallets guide.
If you had Bitcoins in your possession prior to August 1st, 2017 when the Bitcoin Cash hard fork happened, you are able to claim the same amount of tokens in Bitcoin Cash. Even if you haven’t claimed your Bitcoin Cash tokens by now, they will be safe and sound waiting for you to claim them.
The methods of claiming your tokens will vary depending on the particular wallet you use.
If you have a full node wallet (which is a wallet that requires you to download the entire Blockchain) like Bitcoin Core or Bitcoin Knots, simply back up your wallet by navigating the menu and selecting ‘Backup Wallet’. This will generate a wallet.dat file which you can import into a full node Bitcoin Cash wallet, such as Bitcoin ABC, where your BCH tokens will be available to you.
It is very important to note that some full node wallets can conflict with each other. For example, the default data directory for Bitcoin ABC is the same as Bitcoin Core. Therefore installing Bitcoin ABC may result in Bitcoin Core’s data being overwritten.
If you haven’t backed up your private keys, this may result in you losing both your BTC and BCH tokens forever. To avoid this, install Bitcoin ABC, or any similar full node Bitcoin Cash wallet, on a different computer.
If you are using an SPV (Simplified Payment Verification) wallet (which doesn’t need the entire Blockchain downloaded to your computer to operate) you should still be able to claim your Bitcoin Cash tokens.
Most of those wallets use a recovery seed, which is a phrase that holds your Bitcoin private keys, and by extension, your Bitcoin Cash private keys. Therefore you should be able to access your BCH simply by inserting this seed into a dedicated wallet.
However, the procedure to do this may differ depending on what type of wallet is used. So to be on the safe side, search for an announcement made by your wallet provider which provides instructions on how to claim your funds. Have a look at this post on Reddit for a variety of announcement links. Alternatively, you can always contact your wallet’s support team.
If you weren’t holding any Bitcoins at the time of the split, you can still purchase Bitcoin Cash at some cryptocurrency exchanges or opt for a peer-to-peer transaction.
Despite the fact that Bitcoin Cash is currently the fourth largest cryptocurrency behind Bitcoin, Ethereum and Ripple in terms of market capitalization, it’s not supported by every major cryptocurrency exchange. A full list of exchanges that support BCH can be found here.
Even though exchange adoption is increasing, out of all the globally operating exchanges on the list, currently only GDAX, Kraken and Cex.io allow you to buy Bitcoin Cash for fiat currency.
If you are using other exchanges, like Bittrex, you will only be able to get Bitcoin Cash in exchange for Bitcoin, Ether or Tether. To find out which exact trading pairs an exchange supports, you can either have a look in the ‘about’ or ‘F.A.Q.’ section of the exchange’s website or use CryptoCoinCharts.
Bear in mind that the absolute majority of cryptocurrency exchanges will require you to go through a rather lengthy and sometimes daunting process of verifying your identity before you can start trading.
Additionally, in order to deposit to or withdraw funds from an exchange you will need to connect your bank account to the exchange’s withdrawal system. Completing identity verification and bank account linking will most likely take several business days.
Due to security reasons, most exchanges only accept deposits and withdrawals via bank wire transfers, which can take up to three business days to go through. Some platforms allow for credit/debit card payments and, in some cases, even PayPal, but most of the time this option is only available for Bitcoin transactions.
Different exchanges will also ask for different fees for various operations. Some platforms will charge a fixed amount, while others will calculate your fees for every operation automatically. Every exchange provides a run-down of their fees in the ‘about’ or ‘F.A.Q.’ section of their website.
Transaction times will also vary depending on an exchange. As it was mentioned before, most of the time depositing to and withdrawing fiat funds from an exchange can take up to three business days. However, most cryptocurrency operations, especially when it comes to Bitcoin Cash, are almost instantaneous.
Alternatively, if you already own Bitcoins, or any other major cryptocurrency for that matter, you can use services like Shapeshift and Changelly to instantly trade between cryptocurrencies, including Bitcoin Cash. Moreover, Changelly allows you to buy most of its supported cryptocurrencies with USD using Visa or MasterCard.
Finally, always make sure to keep your funds and transactions safe. Only trade on reputable exchanges, make sure to read users’ reviews and feedback and always double-check the addresses where you’re sending your funds.
Alternatively, you can opt for a peer-to-peer purchase. LocalBitcoinCash is an example of a service which supports this for Bitcoin Cash, as LocalBitcoins does for the original Bitcoin. LocalBitcoinCash provides a platform where users can trade BCH for fiat currencies directly with each other. Users can either place orders and wait for someone to respond or fulfil other people’s orders, with the platform itself providing an escrow service. However, whether this platform can be trusted still remains to be seen.
If you do decide to use the platform, bear in mind that you will be dealing with individuals, instead of reputable companies. This means that the chance of fraudulent behavior is significantly higher.
When trading peer-to-peer, always make sure to double-check the amounts, the current exchange rate and the addresses of both your and the recipient’s wallet. Finally, and this should be obvious - never, under any circumstances give up your private keys to anyone.
There is also an option of setting up a person-to-person meeting. This can be done through dedicated Bitcoin Cash forums, LocalBitcoinCash and you can always check Meetup.com to find a BCH-related event near you.
When buying Bitcoin Cash offline, always make sure to meet in a public place. Bringing a friend with you could also be a good idea ( just make sure to notify the seller beforehand). You will also need a working Internet connection to check the latest currency exchange rate and sign off for the transaction.
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