How-to buy Bitcoin or other cryptocurrency
How to get started purchasing cryptocurrency
To buy Bitcoin or any other cryptocurrency you first need to choose a broker or a cryptocurrency exchange, in this how-to we will mainly focus on exchanges.
What is a cryptocurrency exchange ?
A cryptocurrency exchange is a platform where you can buy and sell digital assets such as Bitcoin and a other popular cryptocurrencies, exchanges generally have quite low fees making it ideal if you want to buy crypto either for holding or for spending on services. To the uninitiated crypto exchanges might seem a little overwhelming with a lot of information about different cryptocurrencies, charts and a multitude of different options. In all honesty it is quite easy to get a hang of how to properly use a exchange if you just put a little time into it, popular exchanges like Binance and Crypto.com also offers extensive guides that explains in detail how to use the exchange for new users.
Since the inception of Bitcoin and exchanges there has undeniably been a few scandals in particular (Mt Gox) that was hacked several times between 2010 and 2014. But luckily the blockchain and security around exchanges has grown with the technology making it rock solid, the security measures and insurances that exchanges have currently makes our crypto safe even if keeping it on the exchange. If you are in to buying cryptocurrency as investment either holding long or short term we recommend transferring your assets to a cold wallet like trezor this also gives you full control of your digital asset.
What is a crypto broker ?
Crypto brokers offer easy-to-use platforms that allow you to buy and sell cryptocurrencies without having to deal with complex technicalities. Some charge higher fees for trading than exchanges. Another pitfall is brokers who claim that their service is free but are then making money but are then selling information about you to other traders that are selling to large brokerages or funds, and in some cases they do not trade at the best possible market price and pockets some money for them self. If you intend to use a broker the most popular ones are currently SoFi and Robinhood.
It might seem convenient to buy crypto this way but it is most certainly not the best choice for you as a investor or customer, platforms like Robinhood and SoFi does not allow transfers of cryptocurrency meaning its only invested as a crypto asset at the broker. If you want to withdraw your cryptocurrency or actually use it for something you are better of using a crypto exchange.
How to buy cryptocurrency
Create and verify a account on an exchange
Once you have made a decision on what exchange you want to use, you will need to sign up and open a account. It’s common practice for all exchanges to do a personal verification, you simply have to state what you are going to use the exchange for and verify your identity, this is a essential step and to prevent people using stolen cards of funds to buy cryptocurrency and it is also required to meet federal regulatory requirements.
After you are finished with the signup process you might not be able to trade, buy or sell cryptocurrency before the verification process is complete. Luckily this process if often finished within a hour and in rare cases it might take up to a day. Depending on where you reside the exchange might ask you to submit a copy of a identity card, driver’s license or passport some exchanges like Binance also requires a selfie to prove your appearance matches the documents you provided.
Transfer money or connect your card to the exchange
To buy Bitcoin or any other cryptocurrency you obviously need some money on the exchange there are multiple ways to do this:
You can choose to connect your bank account directly to the exchange for crypto asset purchases
This is also a good option simply make a bank or wire transfer to the exchange.
Connecting a Visa or Mastercard directly to exchange is the most common way to purchase cryptocurrency, note that this is more expensive than the other mentioned methods.
Link bank account
Wire transfer or bank transfer
Connect a debit/credit card to the exchange
Depending on the exchange and deposit method you chose you might have to wait a few days before you can use your money on the exchange. Card payments are instant if you are in a hurry to purchase crypto.
Note that if you are purchasing crypto on a exchange using a debit or credit card it is going to be more expensive than the other methods mentioned. Credit cards are subject to higher fees, and in the case of crypto purchases you can many times be subject to fees up to 10% of the total transaction, so if you are purchasing a large quantity of crypto or NFTs a bank transfer is preferred.
How to store Bitcoin, Ethereum and other digital currency
A crypto exchange is great for purchasing cryptocurrency and other digital assets such as NFTs. But we do not recommended it for long term storage, or if you are going to use the currency for services like crypto casinos, purchases you are better of transferring your cryptocurrency to a cold crypto wallet.
Hot and cold cryptocurrency wallets
When talking about crypto wallets the term “hot wallet” and “cold wallet” are often mentioned what is the difference between hot and cold cryptocurrency wallet:
A hot cryptocurrency wallet is considered a service that is always connect to the internet, in essence this means that all cryptocurrency exchanges are considered hot wallets. The reason we don’t recommend long term storage in a hot wallet is because the wallet is dependent on the service running if for some reason they shut down or someone gets a hold of your e-mail or phone they might be able to access your assets that are held online.
A cold cryptocurrency wallet cannot be easily compromised since its not connected to the internet. There are different types of cold wallets some are just simple wallets that you can run on your computer while others like Ledger are physical wallets that you then connect via USB. Note: that if you are using a cold wallet you get a recovery key, and if your computer crashes and you do not have access to the key that the wallet generated all your cryptocurrency is lost, we recommend writing down the recovery phrase you are given and save a copy of it in a safe.
If you are looking for a reliable cold wallet that supports over one hundred crypto currencies we recommend you to check out atomic wallet.
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