The market for Bitcoin and other crypto-currencies is still in a nascent stage. If you look at the charts, youll see a huge price difference between say MtGox and Btc-e price of BTC/USD. This doesnt present a real arbitrage opportunity for ordinary users though, because it is really hard to get USD out of MtGox and really hard to get USD into Btc-e. I have prepared this small guide as a reference for all people involved. Remember that a lot depends on where you are located.

Bitcoin Security

It is extremely important to keep your Bitcoins secure. This means keeping the private keys that hold your Bitcoins secure. There are many Bitcoin wallets for everyday use, such as Armory (high on security, low ease of use) or Electrum for desktops and Breadwallet for iOS.

More than everyday usage, it is important to keep your savings safe, which you dont intend to use for everyday spending. Hardware wallets seem like the best option in this case. Check out Ledger (cost 29€,approx $36) or Trezor (cost $119). If you hold more than 5 Bitcoins for the long-term, I suggest getting one of these to keep your Bitcoins secure.

Buying and Selling Bitcoin

Global Resource LocalBitcoins . Most major cities are represented here. Advantages are that you can buy and sell anonymously without having to register with your identity anywhere. Disadvantage is usually w.r.t. prices that you get (highly geographic supply-demand based) and also the time investment in going out and finding people.

United States

Just go for Coinbase . Its by far the simplest and easiest to register and use for US residents. You can just connect your bank account, and depending on the levels of verification, can even buy Bitcoin instantly. Theres a new competitor to Coinbase, Circle . which promises no fee. It hasnt started operations yet, but keep an eye out. It might end up being a cheaper option.

This is as opposed to the other option available for US residents, CampBX . where you have to physically mail a money-order and it can take up to a week for your money to be deposited into your account. This is going down in popularity by the day, as better options become available. CampBX was one of the first companies in this space in the US though.

If you dont want or are unable to link your bank account, Expresscoin promises to be the go-to place for the unbanked where they take a variety of different payments and you can choose whatever wallet you want (e.g. multisig for higher security). Its new but promising. Theyve also expanded into Canada. Seems like a well-run Silicon Valley startup.

If you want to buy small amounts of Bitcoin using credit card or PayPal (since chargebacks are possible on both, companies only sell small quantities), check out Bitcoin Insanity  (Tinkercoin has ceased operations and no longer sell Bitcoin for credit card/PayPal).

New York Special. If youre in New York, check out the New York Bitcoin Center . which hosts 2-3 times a week, a special trading event where you can buy Bitcoin from fellow Bitcoin enthusiasts, or sell Bitcoin to them. It is a completely peer to peer marketplace where buyers and sellers come together and is also probably the most anonymous way to buy Bitcoin. Trading days are usually Monday, Thursday and Saturday, but they always have special events throughout.

Europeans have more options than Americans. Bitstamp is the most trusted exchange in Europe so far. However, if you can get your money into BTC-e through their various options, you might get a better price.

Safello is another very good option for most European countries. For example, in Sweden, if you have a bank account at Handelsbanken, you can transfer money instantly to buy Bitcoin with Euro, almost like Coinbase. Other transactions take 1-2 days usually. Safello has raised a good amount of money already. and looks like a promising way to buy Bitcoin in Europe. Countries supported: Sweden, Spain, Poland, Hungary, Belgium, Netherlands, UK, Italy, Switzerland, Germany, France and Austria.

BTC China is the most popular exchange, that also charged 0% fees initially during the promotional phase but is now moving to other regions after the crackdown by the Chinese government on Bitcoin operations in the country. Bter is another good exchange I like that also allows you to buy several altcoins in addition to Bitcoin.

Let me know in the comments!

Buying and Selling Other Crypto-Currencies

With a few exceptions, the way you would buy and sell other crypto-currencies is through Bitcoin, so if you have dollars and you want to buy Primecoin, youll probably need to buy some Bitcoin first, and then send these to an exchange, convert them to Primecoin and then withdraw them to your wallet (or leave it on the trading platform, if you trade frequently).

Since there is usually no fiat involved at this stage, these sites are more global anyone can accept Bitcoin and run an exchange for other crypto-currencies without having to worry about bank transfers. One notable exception is Bter in China, which Ill write more about below, which accepts CNY directly to buy other crypto-currencies, so you can bypass the buying-Bitcoin step. This is very convenient for Chinese residents with a bank account. It also sells such new crypto-currencies like ProtoShares that you can now buy directly with CNY.

Cryptsy . Cryptsy is THE exchange for alt-coins. It has a huge variety, and probably the largest selection of alts. Markets exist in BTC (Bitcoin) or LTC (Litecoin) and sometimes both. There are a few XPM (Primecoin) markets too. Youll need to transfer your BTC/LTC to the site, wait for confirmations for the funds to be available and then start trading. You can withdraw to your wallet too. There are trading fees and withdrawal fees, depending on the alt-coin that you want to buy.

Bter . I recently came across this while trading ProtoShares that are not available on Cryptsy at the moment. I really liked the exchange and might move all my future trades here. The trading fees are really low 0.1 + 0% for ProtoShares for example. This is in contrast to exchanges like Cryptsy that charge a minimum of 0.2-0.3% on all transactions. Perhaps its the Chinese 0% transaction fee model (they have a very good English version of the site so you dont have to go through Google Translate, etc.) Definitely recommended for high-frequency traders. For instance, if youre trading the most popular currency pair BTC/LTC, the fees is 0%. You can end up saving a lot.

BTC-e . Another very popular European exchange that also allows fiat deposits in RUR, EUR and USD. This is one of the older exchanges and is usually pretty active.

MintPal and Bittrex have become increasingly popular of late, adding new altcoins and getting a significant trading volume in several markets.

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