So You Want a Bitcoin?

Overview

Bitcoin is all over the news lately and it’s the hottest virtual currency.  You know all that, but all you want to do is get your first Bitcoin.  Well I’ll cut to the chase and show you step by step how to get there.  I’ll describe how to convert real US Dollars (Other currency’s work to but the exchange sites are slightly different) into a Bitcoin.  This blog entry will teach you how to get a Bitcoin.  If you want to learn more about how to secure it, where to store it, how can you use it or how to get it back to cash, all that and more is explained in my Book Bitcoin Step by Step.

Step 1:  Sign Up for An Account

https://mtgox.com/signup

Once you are signed up, you’ll be asked to go through a verification process.  You should consider doing this.  However, if you will not be moving more than $1,000 USD / day and $10,000 USD /month, you do not need to be verified.

Step 2:  Fund Your Account

From the Home Page, Select “Funding Options”.
To get money into the account, you can do a bank transfer, which is best for large amounts.  If you have cash and want to get it into the system fast, the following is one way to do it.  We’ll only be moving a small amount so we’ll use BitInstant.

Step 3: Determine How Much We Need

When you log in you are taken to the Trade Screen and the Buy tab.  On this form there is a price entered in the Box Price per coin in USD.  This is how much 1 Bitcoin (BTC) cost at the moment.  It will change prior to your purchase.  So we may get a little more or a little less than a full BTC.  That’s ok.
Add 3.99% $3.95 to this amount and that’s what you will need in cash. So if you plan to spend $100 you’ll need:
$100 + $3.99 + $3.95 = $107.94

Step 4: A Cash Deposit through BitInstant

Before going to the BitInstant site, it is important to note your account number from MtGox.  It can be found at the top of the web page in the center.  It will say “Account Number” next to it.  You will need that number to ensure you will receive the money.
Go to the site:  https://www.bitinstant.com/

Select “MoneyGram” in the Pay From drop down menu and “MtGox” in the Pay To drop down menu.  You can experiment with other options.  Look to see if there are CVS or 7/11 stores that support transactions in your area.  Near me, only MoneyGrams are supported.  I can go to Wal-Mart and have it funded.
In the account box, place your MtGox account number.
In the Amount place $100
Enter the amount to send and notification email.
When you do, you will be taken through a series of screens where you will verify additional information.  I cannot finish the process to get the screen shots.  If I do, I will have an outstanding money order.  So there are no screen shots for this.  When you do this, you will end up at a ZipZap site where you can enter your phone number and search for a location to send the MoneyGram.
Once you’re done entering your information, select “Create Payment Slip” at the bottom of the screen.
Print this out and take it to the location you chose.  I’ll continue with the example assuming you picked Wal-Mart.  At Wal-Mart, there is a Money Center generally in the front of the store.  Go there, grab a blue MoneyGram form and fill in the information.  The slip you printed out will have the information you need to properly fill it out.
Pay the clerk the money.  Drive, walk, take a cab, bus or train home.  Within 30 to 60 minutes, your MtGox account will be funded.
The fees on this are a little bit less:

• 3.99% = $3.99 on $100
• $3.95 MoneyGram

Step 5:  Buying Bitcoins

If you recall from the Exchange section, you can place a market order to tell the system how much USD you want to spend, and you’ll spend that much money and receive the number of BTC based on current BTC for sale.   Alternatively, you can enter a limit order and set the price at which you want to buy the BTC.  With a limit order, you will need to wait until someone in the marketplace decides they want to sell at the price you are asking.

To enter a limit order:

• Enter the number BTC to buy.
• Enter the price to pay.
• Select the “Buy Bitcoins” button.

Your open order will be displayed in the bottom section of the screen.  If you simply want to place a market order, check the “market order” check box.  Enter the number of BTC you wish to buy, and you will be told approximately how much it will cost.
There you have it! You now have Bitcoins.