Buy Bitcoins with Paypal – step by step tutorial
Don’t like to read ? Here’s the video version of this guide
One of the biggest issues today in Bitcoin is the fact that you can’t buy it very easily. Even though Paypal has been very favourable of Bitcoin in the past 2 years, it’s still an issue to find credible places to buy Bitcoins with Paypal in 2015.
Why won’t Paypal allow this ?
Simple. There are numerous chargeback cases created by scammers who buy Bitcoin with Paypal from you and then claim they didn’t receive anything. This way they get to keep their money and their Bitcoins. Here’s a really simple video illustrating this:
Now since no exchange currently allows a way around the charge back issues of buying Bitcoins with Paypal we are going to have to go through VirWox – The Virtual World Exchange. We will use a virtual currency called SLL (Second Life Linden Dollars), This currency is used for one of the biggest virtual worlds today – Second Life. After buying this currency with Paypal (which is acceptable) we will then trade it to Bitcoins.
My guess is that Virwox is able to do this method since they are not directly selling you Bitcoins with Paypal but rather selling you SLL with Paypal which they can prove if you received (unlike Bitcoin since it’s anonymous in nature).
Things you should know about Virwox before we get started:
- Because of chargeback risk Virwox is taking on themselves they are limiting the amount you can deposit initially through Paypal or a credit card, here are the exact limits according to their website from April 30th 2015.
- This process hold within it more transaction fees than usual. This may still be a valid solution since the soaring numbers of BTC compensate for this. It’s important for you to be aware of the different transaction fees.
- VirWox is delaying new user transactions for up to 48 hours. This means that it can take you 2 days to complete this process (still way faster than using a wire transfer).
- If you still don’t receive the Bitcoins after 48 hours (which is very unusual) you can contact Virwox at email@example.com.
If you find yourself getting stuck at any point don’t hesitate to contact me through the contact form on the site.
Step 1: Go to VirWox.
VirWox is an exchange of virtual currency, you can buy there Lindens, Bitcoins, and more. It has more than 400,000 registered users and is a Second Life Lindens authorized reseller.
Step 2: Open a free account
Click on the “not registered yet” on the top of the left sidebar to open up a new account as shown here:
Step 3: Fill out our personal details
Fill out your username and email address. Where it asks for “avatar name” just leave it at “No Avatar”, it doesn’t matter, since you’re not going to play Second Life.
Step 4: Activate your account
Step 5: IMPORTANT!!! Change your password!
Do not worry about the message saying “Your avatar connection has not been validated yet” – it is irrelevant.
Step 6: Fund your account through PayPal
Note: From now on for each transaction you will make there will be a fee – make sure you are aware of the relevant deposit and withdrawal fees.
Step 7: Buy SLL with USD
Note: If you haven’t made a deposit yet you will get the screen shown above requesting you to deposit before you buy SLL.
Step 8: Buy BTC with SLL
Step 9: Withdraw your Bitcoins
Will this method actually work ?
Probably yes. I’m saying probably because I have received a handful of emails from people who weren’t able to get their Bitcoins. having said that, from all of the people who didn’t get their coins I haven’t gotten one email stating their money wasn’t returned to them. So yes, the process is a bit irritating but I have been using this method since 2013 and it hasn’t failed me yet.
How much fees will be deducted from my deposit ?
This is probably the second most asked question I get. It’s important to understand that when you buy Bitcoins through Virwox you are actually conducting two transactions. USD to SLL and SLL to BTC. This means you’ll need to pay a fee for each of these transactions.
The problem is that Virwox’s fee structure is always changing that is why I advise to check each case in person before proceeding. There is a pretty cool site which shows you the current BTC/USD rate after all of Virwox’s fees. I’m not sure how reliable the site is but you can check it out for yourself here.
Additional methods for buying Bitcoins with Paypal
At the time of writing this paragraph (April 2015) this is the only known way to buy Bitcoins with Paypal. If you’re still looking for additional ways you can take a look at LocalBitcoins and try to find sellers that perhaps will be willing to sell you Bitcoin with Paypal. Click here for a tutorial about how to use LocalBitcoins.