Getting Bitcoin Using Mt.Gox
Although this is a long process initially, it is about as convenient as current standards get to move money in and out of the exchange. Mt.Gox has increasingly become more frustrating as bitcoin has become popular, but controls the most volume and seems to represent what the majority of the bitcoin market is willing to buy/sell
Part 1: Sign up for Dwolla
Dwolla is a service that allows an individual to move money from a funding source to businesses or other individuals in USD. This will be your medium for moving money out of your bank account and into the exchange where you will buy coin.
Fill out the necessary information as if you were opening up an online bank account so make sure to use a strong password. You will be required to enter some sensative information (i.e. Social Security). If you look in you URL bar where you type in a website, you will notice a certificate with Dwolla, Inc next to a mini padlock. This is indication that your information is being encrypted with SSL and is relatively safe from hacker attacks if you need reassurance on information you are providing.
Once you have registered and log in you will be linked to your dashboard which will display your name, Dwolla ID, your current funds, etc. On the left side of your dashboard, click on “funding sources” and add the bank you would like to transfer your money from. You will then be told that two deposits of a couple of cents will be made into this account and in order for it to be verified with Dwolla you will need to look at your online bank statement and provide these two numbers, confirming you are the owner of this account.
And you’re done with the Dwolla portion! Your bank account should be verified in the next couple days then you are free to use Dwolla’s service, but will still need to wait an entire month before you can send funds to the bitcoin exchange as explained in Part 2.
Part 2: Mt.Gox
Mt.Gox is currently the largest, safest exchange (some of you will argue that) and most bitcoin trades take place here. First click on the signup box and fill out the information it asks for and be sure to choose a strong password. Any place that you will be moving money through should always be as secure as it can be.
After the normal registration portion, you will be asked to verify your account by providing some pretty sensitive information. First, you will need some form of identification which can best be in the form of a drivers license or passport. I find the best way to do this is to take a picture using my iPhone and using my Dropbox to move it quickly to my computer then onto the internet. If you’re sans-smartphone, you can use a camera and import it to your computer then select it from the browser on Mt.Gox. Once your ID is uploaded, go to the next step where you will be prompted to upload a recent bill at your address with your name on it. Go through the process from picture to upload then you’re finished verifying and will need to wait to be cleared by the website’s administration. Make sure that all of these photos are clear and legible since the Mt.Gox team seems to be very thorough in their verification, so follow these steps carefully or you may be waiting months to exchange. If you have done this all correctly, you’re now in queue to be verified. If all goes well you should be able to trade on this account one month after the bank account you use with Dwolla is verified.
Part 3: Funding Your Account
So you at this point you have a Dwolla account, a verified bank account linked with Dwolla that has been active for one month, a Mt.Gox account, and have had your account verified with the Mt.Gox admins. Congratulations, you’re finally ready to move some money!
Before your month is up with your bank account verified, it would be wise to move money into Dwolla from your bank so that it is ready to transfer to Mt.Gox. It takes 3-4 business days for Dwolla to get these funds out of your account and if you have this ready you will get coin faster. If you haven’t done this already, get on it and you will be golden by the time they have promised these funds will be available by.
Dwolla will send you an email when you’re ready to go, so now log into your Mt.Gox account and click on the “funding options” tab on the left hand side of the page.
- Under “Please choose a funding method” click on “Dwolla”
- You will see an orange, highlighted series of digits. Click on them.
- You are now in Dwolla, type in the amount you want to send
- Enter your pin
- Your funds are now moving into Mt. Gox
You can also skip the step of moving funds from bank account-Dwolla-Mt.Gox by selecting your linked bank account under the funding source tab during this process. The only advantage of this is funding Mt.Gox directly from your bank instead of having to check Dwolla to make another move with your money.
Part 4: Buying Bitcoin
Now you’re finally ready to buy.
If you do not know much about market data, don’t try to day trade and take guesses. The Bitcoin market is in its infant stages and can be extremely volatile, going up and down daily. Unless you know how to read and analyze market data, don’t be risky and just buy at market price or at a price near market that you think is fair. If you’d like to learn how to trade better check out these links:
Once you execute an order, an email will be sent to you stating that your order is complete and you should have bitcoin displayed in your Mt.Gox account. Congratulations, you just bought your first bitcoins!
Now that you have bitcoin, its important to get it off of the internet and into your wallet. Unlike having a bank account where if something happens to your funds you may be able to be reimbursed by your bank, bitcoin is not regulated by a particular business. If you leave it sitting somewhere on the internet and an intelligent hacker finds it, your money could be gone forever. You should now read my guide on creating a digital wallet to store all of your bitcoins offline.
What a long process! But now that you have it set up, you’re good to go for all future transactions and can even move bitcoins from any address and sell them on Mt.Gox to exchange them for hard currency. You may be asking yourself, is it really worth my time to go through this extensive process to obtain bitcoin and pay money to have just another currency? Well, let me remind you of what your hard efforts have resulted in.
- Your money is now completely yours. No bank or government can touch it, charge it, or freeze it. No more fees from your bank for not maintaining a minimum balance, over drafting, no worrying that a business is in control of your hard earned money and can do as they please with it. Several countries in Europe have failing economies and banks are taking people’s hard earned money by charging fees up to 60% of their deposits. You never know what can happen to your money, and bitcoin is the most sure method that it is yours and yours to keep.
- You can send money to whomever you wish, almost instantly. Have a child studying abroad that needs money wired? Want to send someone a little birthday money? You can send it directly to their digital wallets and it will be there in a matter of minutes, usually for only .001 BTC (~$.10 at current exchange around $100/BTC). Competing services such as Western Union brag about their minimum of $5 in fees to send within the US.
- Bitcoin has consistently been appreciating in value. More than likely you will earn back anything you paid in fees within the next few days of owning a bitcoin. My most recent purchase was for $192 worth of bitcoin and at this time of publication has appreciated to $463 in a matter of two weeks. When you buy a car off the lot after a purchase, it immediately drops in value. There are not many purchases you can make today that will result in you having more money than you put into it. If we help bitcoin thrive and survive, we could be heading for a $100,000+ bitcoin in the next six years.
- You are reinventing the future of the world economy. Imagine a future where centralized banks no longer have the power to choose how much money enters the market and inflates our currency. No banks can dip into your pockets. No government can freeze your account. See a charity you want to donate to? It takes seconds. Shifting the power of control back into the hands of hardworking people that earned their money and want to keep it. Use money wherever you want to, whenever you want to. Bitcoin is doing what the Internet did for information, only your support can help liberate money.