Heard people talking about buying cryptocurrency but don’t really know how to do it? In this blog we will simply explain how to go about it.
A Simple Way To Buy Cryptocurrency
To buy crypto on the blockchain you must first sign up with a crypto exchange, providing your basic details to complete a security check. The easiest and quickest way is to then transfer your fiat currency (USD, Euro etc.) to the exchange and simply purchase the crypto you desire (Bitcoin, Ethereum etc.) The exchange will keep your crypto online in what is called a “hot wallet” which you can access for future trading.
Popular Crypto Exchanges
There are hundreds of crypto exchanges from which to choose. Some of the biggest based on daily volume are:
- Binance
- Coinbase
- FTX
- Kraken
- KuCoin
- Gate.io
- Bitfinex
- Gemini
- Huobi Global
- Bitstamp
Choosing The Right Crypto Exchange
Most crypto exchanges operate similarly but they do have subtle differences. Reading online reviews is the best way to help you decide which exchange is right for you but there are some important factors you should consider:
Security – unlike banks, no-one will underwrite your cryptocurrency investment so if an exchange is compromised or hacked, you stand to lose your funds. That’s going to be a much bigger issue if you leave those funds on the exchange, rather than using a cold wallet for a much greater level of security.
Safety – most exchanges allow you to transfer your crypto to a “cold wallet” for safest storage but there are some exceptions such as PayPal and Venmo. Do your homework on this.
Fees – these can vary greatly from one exchange to the next with some applying flat rates while others will charge a percentage of your transaction. Like most things in life, you generally get what you pay for in terms of fees and that means security. Read fee structures carefully before signing up.
Coins – most exchanges don’t give you the opportunity to trade all available cryptocurrencies. If you’re not buying Bitcoin (BTC) or Ethereum (ETH), it will pay you to ensure the exchange you want to use trades the coin you seek.
Finding your Account
In terms of a security check, different exchanges require different levels of personal information. Most will accept payment in common fiat currencies via bank transfer, debit or credit card although the latter two may attract higher fees. Once the transfer has been completed, you are ready to buy your crypto! You can normally begin investing from as little as US$2.
Placing an Order
Similar to buying shares, this is generally a straightforward process, buying the equivalent amount of a particular cryptocurrency in how ever much you determine on the exchange. Some exchanges will allow you the choice of either a market (instantaneous) or limit order (designating a specific price to execute the transaction).
Storing Your Cryptocurrency
Many exchanges will create a wallet for you and allow you to leave your cryptocurrency online. A wallet stores your private keys which gives you access to your cryptocurrency. If it is not a large amount and you plan on trading regularly, a “hot wallet” is a reasonable choice. But if it is a significant amount of money or you plan on holding it for a longer period, transferring your cryptocurrency to a much safer “cold wallet” is strongly advised.
Other Ways To Buy Crypto
The purchase of cryptocurrency has extended to some other digital payment platforms like PayPal, Venmo and Cash App as well as the investment app Robinhood. While these may appear more convenient, especially for those simply buying Bitcoin, PayPal and Venmo don’t allow you to transfer your cryptocurrency into your own crypto wallet. This effectively means you are not in charge of your own crypto which is less than ideal. These platforms may also charge higher fees and be limited in the coins they trade.
Buying Crypto Anonymously
If you are concerned about privacy, there are ways to buy crypto anonymously.
Find a platform that allows cash transactions – These include BitQuick, Paxful, LocalBitcoins and LocalCryptos. Alternatively, Bitcoin ATMs allow you to deposit cash to buy your crypto.
Make your deposit – you can do this in person or send a trusted proxy. Or you can deposit directly with a platform that doesn’t require registering personal details.
Receive your crypto – transfer your investment to a wallet. Crypto wallet addresses do not require personal details. They may also run on proxies without revealing their locations.
Want To Know More About How To Purchase Crypto?
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