Bitcoin buying and selling in the UK has always been something of a paradox. For a major world economy forming such a large potential market, bitcoin purchasing remains more expensive than in neighbouring Europe.
The UK government has cited its desire to aid Bitcoin’s cause over the past year, but as yet, no tangible changes have been seen, and banks continue to be reluctant to partner with domestic Bitcoin operators.
Cointelegraph took a look at the best options available for UK consumers in 2015.
The most common way mainstream consumers purchase bitcoin is through an exchange. However, what can prove a cost-effective option in the US, Europe and elsewhere still does not quite hold true for the UK.
Domestic exchanges (such as they are) frequently offer slow service with high fees. A guideline amount is that charged by Coinfloor - £5 to deposit BTC and £10 per withdrawal – far higher than a EUR deposit on another major exchange, for example.
Those exchanges situated offshore, and which have a GBP option, are forced to exact further fees from customers to cover UK banks’ charges for SEPA transfers to EUR.
Things are slowly improving. US exchange Coinbase announced in August that UK customers could buy BTC direct using certain credit or debit cards, with the transaction subject to a 3% commission fee – potentially more cost-effective than a one-off deposit or withdrawal fee.
Smaller operators are also attempting to corner the market in terms of convenience. UK-based Cryptopay is currently facilitating purchasing with a 1% fee, coupling this with its own debit card for spending and a dedicated service for sending funds abroad in both crypto and fiat currencies.
The banking situation in the UK has led to the curious situation in which exchanges and formal mechanisms of buying and selling BTC are not the most common choice for most people. P2P transacting has become highly successful, notably Localbitcoins, an eBay-style listing service offering sales and purchases from other users in real time.
The rates vary: the least attractive are tied to cash exchange agreements (in person), while bank transfers receive a better rate. Certain users also offer considerably higher rates – higher even than the market price of BTC – on purchases in return for non-currency such as store loyalty points etc.
Localbitcoins had been known as the Wild West of Bitcoin transactions in the past, but its reputation has improved through its ratings system, and security has been transformed.
Similar operations to Localbitcoins do exist, but their scope and security comparatively leave something to be desired.
The aforementioned Coinfloor set up its own marketplace-style operation in July 2015: featuring preapproved traders, those with a Coinfloor account are offered a faster exchange method than on the conventional exchange platform.
As might be expected, the brick-and-mortar method of acquiring bitcoins is still expensive, and the UK is no exception. Bitcoin ATMs offer notoriously poor value for money, and at current prices are best avoided altogether while the market becomes more competitive.