YOU WON’T NEED ANY PRIOR KNOWLEDGE OF BITCOIN TO USE THIS GUIDE.
Our goal for this particular article is not to bog you down with details, but to show you the easiest and cheapest way to buy Bitcoin in Australia, with some added security.
If you’d like to go deeper into learning about Bitcoin (what it is, how it works and what all the fuss is about), start here instead.
Guide Updated 17/06/17
Buy Bitcoin in Australia – The 3 Step Process
FOLLOW THESE THREE BASIC STEPS TO BUY BITCOIN:
- Set up a Bitcoin wallet
Buy Bitcoins
Store your Bitcoins securely in your wallet
- Set up a Bitcoin wallet
- Buy Bitcoins
- Store Your Bitcoins securely in your wallet
There are a surprisingly large number of options when it comes to each of these three steps, but to make this as simple as possible we’ve selected the options that will give you the best exchange rate and the lowest fees while keeping your Bitcoins safe from theft or loss.
This guide explains how to buy Bitcoin with AUD, but can also be followed if you’re in another country buying with a different currency.
Step One: Set up a Bitcoin Wallet
There are no banks in the world of Bitcoin so you alone are responsible for keeping your coins safe in your wallet. There are several different types of Bitcoin wallets to choose from. You can store your Bitcoins on a hardware wallet, a desktop wallet, a mobile wallet, a web wallet, a paper wallet, a brain wallet or other wallets.
We’re going to store your Bitcoins in a paper wallet, because it’s simple to do and is well suited to holding Bitcoins for investment… and you can’t hack a piece of paper.
To get your paper wallet, download this zip file. It’s an offline version of bitaddress.org, which makes it more secure than the online version.
Turn off your WiFi, then unzip the file and open bitaddress.org.html in a browser, like Chrome.
This page uses the randomness of your mouse movements and keyboard strokes to improve the security of your wallet. So move your mouse around randomly and/or type some random characters into the textbox until you see the numbers on the page reach 100%.
You’ll then be given a Bitcoin Address (also known as your Public Key) that looks something like this:
19fXfugkYVVSTdKdFjBFyd3DF1ijDLGPmd
And a Private Key that looks something like this:
Ky9dwtbA2ga4aX5eELwteLR58AdYceHyF81CKYEWgooPmvjSMd3W
They’ll each be represented in two forms, a QR code and a string of characters.
Now remember this: Only you, and you alone, should ever know your Private Key. If anyone else has it, they have full control of your Bitcoins.
So print that page out or write down the keys, or do both and create multiple copies. Then put them someone where no one will find them, where you won’t lose them and where they won’t get damaged. Treat them like cash… and don’t store the keys on your computer.
By following all of these instructions you’ve already avoided most of Bitcoin’s security threats. The only real remaining ones are:
- Someone having previously installed monitoring software/malware on your computer
- Someone accessing and stealing your printer’s data
- Losing or damaging the pieces of paper that contain your Private Key
All fairly unlikely. But if you’re looking for a solution that’s even more secure you should get yourself a hardware wallet like the Ledger Nano S. Read our review here. You can safely move your coins from your paper wallet to a hardware wallet at any time.
Or if you later decide that you want to start spending or trading your Bitcoins, it’s easy to move your Bitcoins to a different type of wallet that’s more suitable for that.
Step Two: Buy Bitcoin
Now for the fun part. Head on over to Coinbase and set up your account.
Sign up with this link to get 10USD worth of Bitcoin added to your account for free when you buy your first Bitcoins.
Coinbase is the cheapest and most reputable platform to buy Bitcoin in Australia, as of the date at the top of this article. Their exchange rates are much closer to the market rate than any other exchange platform we’ve seen (and there are many exchanges), and they only charge a 3.99% transaction fee on credit/debit card purchases compared with a 5+% fee on most other platforms.
They also accept payments in AUD, which saves you the 3% foreign exchange fee that your bank would otherwise charge you.
The combination of better AUD-Bitcoin exchange rate and lower transaction fees ends up cutting your total fees by 2-3X compared to pretty much every other reputable platform we’ve looked at.
They also have an incredibly fast, easy-to-use signup process, with Bitcoins available in your account immediately after purchase — something you won’t get with many platforms in Australia.
You might notice that Coinbase doesn’t currently support selling your Bitcoins back to AUD. This is not an issue because you won’t be keeping your Bitcoins on Coinbase anyway. You’ll be able to sell them on BTC Markets and plenty of other exchanges whenever you choose.
Once you finish the Coinbase ID verification and payment method verification process, click “Buy/Sell” on your dashboard.
You’ll start with a weekly buy limit of $300 AUD but you’ll be able to increase this after your first purchase by clicking “Increase limits”. This limit will also increase naturally as your account builds a history with Coinbase.
Once you click “Buy Bitcoin Instantly” you’ll become the proud new owner of your first Bitcoins. Congratulations!
-BUT WAIT-
We’re not done yet. The reason you won’t be keeping your Bitcoins on Coinbase (or any exchange platform for that matter) is because those Bitcoins aren’t actually in your possession. As it stands the Bitcoins are in Coinbase’s wallet.
Your balance on your Coinbase dashboard simply says that Coinbase owes you that many Bitcoins if and when you choose to move them. But if Coinbase gets hacked (and exchange platforms are often targets for attackers) then you may lose those Bitcoins.
A few shady exchange platforms in the past have also run off with their users’ money. So as a rule of thumb, it’s safer to hold onto your Bitcoins yourself.
Step Three: Store Your Bitcoins Securely In Your Bitcoin Wallet
Click “Send/Request” on your Coinbase dashboard.
Enter the Bitcoin Address of your paper wallet from Step One as the ‘Recipient’.
Enter the amount you would like to send to your BTC wallet. If you click “Use max” it will automatically enter the maximum amount that you can send, taking Bitcoin’s transaction fee into account.
Hit ‘Send Funds’.
That’s it. Your Bitcoins should appear in your paper wallet within a few minutes. Visit blockchain.info and enter your Bitcoin Address (also known as your Public Key) in the search bar to check that the transaction has been completed and to see the balance of your wallet.
Don’t be alarmed that you can see your balance by simply typing in your Address. That’s how Bitcoin works. Every transaction is publicly visible to anyone who has your Public Key or the Transaction ID, but there is nothing linking those things to your identity. If you’d like to add an additional layer of security you can create a separate wallet for making transaction and only use your paper wallet for storing your Bitcoins.
Never check the balance of your wallet by typing your Private Key into the bitaddress.org ‘Wallet Details’ page, or any other website. It’s an unnecessary risk. The only time you should use your private key is when you want to pay someone or move your Bitcoins out of your paper wallet.
And you’re done. Your Bitcoins are now safely stored in your paper wallet.