Bitcoin exchanges are services where you can buy and sell bitcoins for your local currency. You can add funds to these exchanges with a bank transfer or by using other payment processors like Dwolla and OKPay. Generally, these exchanges don’t accept Paypal and credit cards because of the potential for fraudulent charge-backs. Also, PayPal’s user agreement prohibits the use of their payment network for buying digital currency.
The quickest way get Bitcoins, is to make a cash deposit via BitInstant (currently available in USA, Russia, and Brazil). The entire process can take as little as 20 minutes if you’re near a deposit location. See our previous article How Can I Get Bitcoins? for more information. Similar services include Bitmarket or Bitcoin Direct.
If you want to convert Bitcoins to Gold, Coinabul is the place to go — the company says “Coinabul uses a proprietary system to secure your gold order at spot, making sure that you get the exact price you want.”
There are quite a few Bitcoin exchanges operating around the world service local communities. If you’re in a smaller country looking for a local exchange, please check out the complete list at end of this article. You can also find local bitcoin traders at LocalBitcoins. You can find good charts at Bitcoin Charts and market info at Bitcoin Watch.
Mt. Gox Bitcoin Exchange
Launched in 2010, Mt. Gox is the oldest Bitcoin exchange out there. Last year the Mt. Gox was handling about 80% of bitcoin trades across the world. That number has dropped this year due to competition — Mt. Gox now handles about 50% of all Bitcoin trades, but it remains the most popular bitcoin exchange.
Mt Gox accepts cash deposits (via BitInstant), Dwolla and wire transfers. The service operates 24 hours a day, 7 days a week, so you can buy and trade at any time. Also, transactions are immediate and you can withdraw without waiting for someone to send you payment via PayPal. Other nice features are real-time trading and withdraw. The owner of MtGox.com also responds to all of my emails, and has good customer service.
Mt. Gox was created Jed McCaleb in July 2010, and was sold to Tibanne Co. in Japan in March 2011.
A registrant on Mt. Gox has at least two sub-accounts: one for bitcoins (BTC), and one for US dollars (USD or MTGUSD) or other national currency. Bitcoins are bought using funds from the trader’s national currency account, and the proceeds from the sale of bitcoins are deposited into the same account. Trading must always involve bitcoins as trading between different national currencies is not offered.
Trades on Mt. Gox’s execute from balances on deposit with the exchange which in turn makes trading on the market instantaneous, compared to some other Bitcoin markets where a subsequent settlement occurs manually between the trading partners. The disadvantage of this is that a third party must be trusted with keeping the money safe.
Link: Mt. Gox
Bitcoinary describes itself as “a peer to peer exchange and reputation system”. It allow people to trade Bitcoin and build a history, all on one user-friendly site. Users can link in their social credibility so buyers know who they’re dealing with even if sellers don’t yet have a trade history. Equally important, you can’t create multiple Bitcoinary profiles using the same social proof, as once you attach your Facebook, Twitter, or mobile phone number, those connections can’t be used again.
Bitcoinary is essentially eliminating the middleman, allowing people to become their own exchange. If you have a computer and access to a local currency, you can become a market maker for that currency. You can do it with gold, cash in an envelope, in person exchanges, rupees, dollars, anything you want. The site itself suggests the possibility of in-person international exchange for travelers, which could become an important niche for Bitcoin.
AurumXchange specializes in instantaneous exchanges between virtual currencies. All of the exchanges occur instantly, except for for exchanges from CosmicPay, SolidTrustPay, and C-Gold, which require AurumXchange to obtain payment approval (usually within 1 business day).
The company says:
We instantly exchange Liberty Reserve, VouchX, MtGox, Perfect Money, Pecunix, CosmicPay, CryptoXchange, and C-Gold e-currencies between them. We also allow you to buy or sell any of these e-currencies using using wire transfers, or European SEPA transfers.
Bitcoin-24 is a new bitcoin exchange that was launched this year. Bitcoin-24 main selling point is that it does not charge any fees for Bitcoin transactions. The company says:
Bitcoin-24 will not charge any fees for Bitcoin transactions! From now you can also deal with USD, which you can add with the MtGox Code. Exchange your Bitcoin, USD and EUR on Bitcoin-24. Directly add funds with MtGox Code or “Sofortüberweisung”. Bitcoin transactions to Bitcoin-24 will only need 3 confirmations.
All The Bitcoin Exchanges
See also this page for a complete list of exchanges.