Where To Buy Bitcoins Online?

Is it a good time to invest in bitcoins? Where can I buy them from?

• I live in India and after 's post about Bitcoins, I researched about them further. I feel that it may be a good time to invest in them. Am I right? If yes, how should I go about it. Balaji mentioned Mt.Gox but it accepts payment in USD. If no, what are the risks involved and how would I know when is the right time to invest? Can I buy bitcoins online by INR?

• Answer:

  Speculation always carries risks.  When commerce occurs using bitcoins that produces demand for the currency.  If I plan to buy something tomorrow using a bitcoin then I will not sell a bitcoin that I might receive (e.g., as revenue) today.  Thus the more commerce where bitcoin is used for payment the greater the demand for them.  Currently, however, the amount of commerce using bitcoin is trivially small.  The largest Bitcoin payment processor only did $5 million USD worth of commercial transactions in the entire month of March.   So even assuming they only handled 10% of all bitcoin commerce and assuming that people hold bitcoins no longer than one week (i.e., annual Velocity = 52) means the valuation of a bitcoin should be ten cents.  Currently at this moment they are trading at seventy dollars.   So using that logic, if bitcoin commerce were to not grow to more than its current level then bitcoins could be considered as being overvalued by 700 times. Of course, speculation is not looking at today's numbers but looking at tomorrow's prospects.   Could Bitcoin grow to doing $42 billion USD of commerce a year? PayPal alone does that much in just one quarter so if bitcoin continues to gain traction there could easily be that much total payment volume (TPV). But since speculators will have acquired and hold many bitcoins, all commerce will have to make do with the amount of bitcoins floating through the markets.  That's why future expectations of the value of a bitcoin vary from the single digits to tens of thousands of dollars per bitcoin.  Nobody knows if bitcoin will gain traction.   What is known is that the valuation will continue to be volatile while price discovery continues to occur. As far as buying bitcoins from India.  If you can send an International wire transfer (USDs) then you can send funds to Mt. Gox, BITSTAMP or any of the other exchanges that accepts USD bank wire transfer. Other options from India, especially for smaller amounts where the cost of an International USD wire transfer are prohibitive include: http://BuySellBitco.in - Deposit cash (INR) at a number of banks in India ECurrencyZone ( http://ECurrencyZone.com/buy.html ) - Deposit cash (INR) at a couple banks in India http://localbitcoins.com/country/IN Trade cash face-to-face.  (Use caution for trading with parties there advertising online transactions). #Bitcoin-OTC marketplace, in which a Web of Trust (WoT) can be used to help determine if a trading counterparty can be trusted in a transaction. The India board on the BitcoinTalk forum ( https://bitcointalk.org/index.php?board=89.0 ) is another place where individuals who offer to trade will communicate.  Forum user Tenakha is likely the individual who performs the most trading volume through that channel. Since bitcoins are very useful for sending payment internationally, expect there to be a growing use for making remittance transfers.  For this reason there will likely be a net inflow of bitcoins to the country.  This gives an opportunity for local independent sellers to profit -- by purchasing bitcoins locally at a discount (paying cash) and then selling them at spot market prices gives the opportunity to pocket the difference.    Since trading bitcoin is not something requiring any significant level of wealth nor is the supply restricted to "approved dealers" or anything like that, eventually this discount will wane but currently remittance transfers alone should be sufficient volume to make it worthwhile for individuals to enter the business of trading bitcoins locally. Additiionally, with subsidized electricity in the country, Bitcoin mining will always be more profitable in India to an individual than would occur in areas where the cost of electricity is much higher.  So these miners will have a supply for sale domestically.