Buy Bitcoin with Paypal – step by step tutorial
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 2016. 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 short video illustrating this).
- Go to Virwox
- Deposit money to your account with Paypal
- Buy SLL on the SLL/USD exchange
- Buy Bitcoins with your newly purchased SLL on the SLL/BTC exchange
- Withdraw your Bitcoins
And now for a more detailed explanation…
Buy Bitcoins with PayPal through Virwox
Pros: A reliable method that has been around for a long time.
Cons: High fees
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 24th 2016.
- 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 protected]
If you find yourself getting stuck at any point don’t hesitate to contact me through the contact form on the site.
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.
2. Open a free account
3. Fill out our personal details
4. Activate your account
5. IMPORTANT!!! Change your password!
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.
7. Buy SLL with USD
8. Buy BTC with SLL
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.
Are there any other methods to buy Bitcoin with Paypal other than Virowx?
Yes. However Virwox has been around for the longest time and therefor is the most reliable. If you continue reading this post I will cover 4 more methods that you can use but each of them has its pros and cons.
Buy Bitcoins with Paypal through Local Bitcoins
Pros: Wide variety of sellers from around the world
Cons: High fees, chance of scam
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. Local Bitcoins, unlike Virwox is a marketplace where buyers and sellers meet. If you use this option you’ll be dealing with an actual person which means that credibility also comes into play. The way you can use Local Bitcoins to buy Bitcoins with Paypal is by finding a person that is willing to sell them to you. But since the seller is taking a big risk (as I explained in the beginning of this post) the will usually charge a really big premium (most of the times this will be more expensive than Virwox). The upside is that you will usually get your Bitcoins faster.
1. Enter your search parameters
The first step will be to go to Local Bitcoins and enter how much you want to buy and from which country. Since Local Bitcoins was originally made for people to meet face to face there is no “worldwide” search which is a shame. This means that there is no way to see all of the people who are willing to sell you will Paypal worldwide other then going through each country one at a time.
2. Choose your seller
On the next screen you’ll see a list of available sellers, you can now browse them one by one. Here are the things to take into account: Feedback score – Located under the seller’s name. It’s advised to conduct transactions only with high feedback sellers.
Trade limits – Each seller has a minimum / maximum amount of Bitcoins he’s willing to trade.
Payment window – How much time you have for paying the purchase and marking the payment done after you initiate a trade. It’s also super important to read the terms of trade for the specific seller located on the right side. Here’s an example:
Some sellers will require you have an initial reputation in order to buy from them so they can avoid scams or fraud. This means that you will perhaps have to conduct some small transactions just to get reputation.
3. Complete the trade
Once you’ve found your seller just enter how much you will to buy and click on “Send trade request”. Keep in mind that it’s crucial to conduct all communications within Local Bitcoins and preferably use their Escrow services (which are triggered automatically for all online sales). This method is faster the Virwox but it can take you a lot of time to gain enough reputation, find your seller and also the premiums are really high (around %30 and more…).
Buy Bitcoins with Paypal Through Cryptonit
Pros: Low fees
Cons: Unestablished company, requires verification
Cryptonit is a cryptocurrency exchange that allows you to deposit funds through Paypal as well as many other payment form like Skrill and a credit card. However unlike Virwox, you will need to go through a verification process in order to qualify for Paypal deposit.
The verification process includes the following:
- A copy of a government issues photo id
- An address verification document like a utility bill or rental agreement
- A photo of you holding these documents or a Skype video call with someone from Cryptonit
Verification should take around 12 hours around weekdays (on weekends can take up to 24 hours). After verification is complete getting your coins is pretty simple. Just go to the “trade” tab, choose the right currency pair (e.g. BTC/USD) and fill out how much you want to buy.
Bonus Option – Buy Bitcoins with Paypal through Circle
Pros: Low fees
Cons: US customers only, requires a Paypal debit card.
This option is a bit trickier since it will work only if you’re living in the US and you’ll need to have a Paypal Debit Mastercard (can be obtained here). Once you have the card you can connect it to your Circle account and get your Bitcoins through Circle using your Paypal balance.
Just got to “account” -> “settings” -> “linked accounts” and click on “add account”.
Once your card is connected you can now but Bitcoins and your Paypal balance will be the first to be used in this purchase. You can also sell Bitcoins and withdraw the dollar balance back to your card.
Not sure how long this specific method is going to last, but for now it has been confirmed through Reddit that it’s still available.
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