Are you a newbie in the cryptocurrency world? You’re probably trying to figure out how to buy coins which might be frustrating, and you may not know how to go about it.
This article aims to enlighten you on how to purchase cryptocurrency without being confused.
Coins like Dogecoin, Ethereum, bitcoin, and others differ, so you need to understand them before buying them.
Thankfully this article has all it takes to show you how to buy cryptocurrencies.
Steps On How To Buy Cryptocurrency
1. Choose a broker or crypto exchange.
The first step to take in buying cryptocurrency is choosing a crypto exchange. A cryptocurrency exchange is simply a platform for buyers and sellers to meet and trade bitcoin.
There are relatively low fees when you exchange trades than when you buy coins. This platform provides an easy and friendly easy purchase option. Bitcoins, coinbase and Gemini, are all cryptocurrency exchange companies.
New investors who do not have a good foundation for buying and selling crypto can take this advantage.
2. Create And Verify Your Account
The second step is to sign up and create your account. This step is done after you must have chosen your cryptocurrency exchange.
Your identity might be needed as a process of signing in, but this depends on the number of funds you plan to trade with.
This procedure is essential because it helps reduce fraud risk and meet regulatory requirements.
It is basically for your safety as you tend to know people you are trading with. Until you complete all processes, including the verification process, you may not be able to buy and sell cryptocurrencies.
Next, you will be asked to submit a means of identification which could be your driver’s licence, voters card, or national identity number. You will have to upload your passport or a selfie of yourself to prove that the face matches the face on the documents you have uploaded.
3. Deposit cash to invest
First things first, you need to have funds in your account to trade in cryptocurrency. You cannot trade with an empty statement.
To deposit money into your crypto account, you need to link your bank account. It doesn’t mean that when there is a fall in crypto, the cash in your bank account will be lost.
It is only a link to fund your account quickly. You can use a credit or debit card to do the linking.
You may need to wait for some days to access the money you deposited in your cryptocurrency, but this depends on the exchange or broker or your funding pattern.
It is important to note that funding your account with a credit card is very risky and expensive.
This means that they are below interest rates higher than regular purchases, and you will also have to pay extra in advance.
For instance, you may have to pay 5% of the transaction amount if you make money early.
This is more than just any fees charged for your crypto trade or brokerage; these can be up to 5% on their own, which means you could lose 10% of your crypto purchase on the cost.
4. Place Your Cryptocurrency Order.
If you have money in your account, you are ready to place your first crypto currency order.
There are hundreds of cryptocurrencies to choose from, from well-known names like Bitcoin and Ethereum.
When deciding which cryptocurrency to buy, you can put a tick mark on it. Bitcoin, for example, BTC and how many coins you would like to buy.
With many exchanges with brokers, you can purchase fractional cryptocurrency shares, allowing you to buy several high-value tokens like Bitcoin or Ethereum that take thousands to own.
5. Select A Storage Method
Cryptocurrency doesn’t have a unique way of being secured. This means that it can be hacked, and it also risks facing theft.
They are equally not backed up by any protections, saying that you need to select a storage method.
If you do not secure the codes you use in opening your account, you risk losing your investment entirely.
This is why you should have secure storage for your cryptocurrencies. If you buy crypto through a broker or an exchange, you have more options to secure your storage.
Leave The Crypto On The Exchange.
When you buy a cryptocurrency, it is usually stored in a crypto wallet attached to the exchange.
If you do not like your partner exchange provider, do not trust your partner, or you want to move it to a more secure place, you can move it to a separate hot or cold bag.
Depending on your choice of exchange and the transfer size, you may have to pay a small fee to accomplish this.
Hot wallets are wallets stored online it can only run on an internet-connected device. Therefore, it cannot function without an internet connection.
Examples of internet-connected devices are laptops, computers, tablets and phones. This crypto wallet can be convenient, but it also risks theft since it works with the internet.
Unlike hot wallets, cold wallets are not connected to the internet. This is why they are the most secure pattern for securing your cryptocurrencies.
They are mainly in the form of external devices. Examples include the USB drive and the hard drive.
This method requires utmost care as you need to be mindful of the device’s code access and handle the device with care because if it fails or breaks, you will lose your cryptocurrencies and may likely not get it back again.
Therefore, it would help if you handled these devices with care.
Like other investments you may likely engage in, do well to consider your goals and financial stability before buying cryptocurrency. This article is a pure guide on how to purchase cryptocurrency, so all you need to do is thoroughly read through it.
Do you have any other ways to buy cryptocurrency apart from the one stated in this article? If yes, please do so in the comment section below, and this post will be updated.