How to Buy Cryptocurrency: What You Need to Know

In this article, we will explain how to buy cryptos, some of the things to consider, and the different types of exchanges.

Trading and investing in cryptocurrencies like Bitcoin, Ethereum, and Ripple is a popular way that most people use to make money. To buy any digital currency, you need to answer questions about the exchange that you will use, the coin you will buy, and how you will store it. In this article, we will focus on how to buy crypto safely.

Identify a good crypto exchange

There are several venues where you can buy cryptocurrencies. Digital wallets like PayPal and Skrill make it possible for one to buy and store a small variety of coins like BTC and BCH. You can also use forex and CFD brokers to buy cryptocurrency derivatives in the form of CFDs. 

However, the most popular method for buying cryptocurrencies is through a crypto exchange. These are companies that provide a platform where one can buy and store thousands of coins. 

There are three main types of cryptocurrency exchanges. First, there are centralized exchanges (CEX) that are owned and operated by individuals. The managers set the fee and determine the cryptocurrencies that are offered. Examples of these exchanges are Coinbase, XBO, Binance, and Kraken.

Second, there are decentralized exchanges (DEX) that are operated by decentralized autonomous organizations (DAOs). They are open-source and use the idea of smart contracts to make sure they are stable.

Third, there are peer-to-peer exchanges that connect crypto buyers and sellers. Examples of these are Binance P2P and Paxful.

You should do your research before you select the ideal company to use. You should ensure that the exchange has all the coins that you might be interested in. Also, consider its reputation, costs, and money transfer options.

For beginners, it is recommended that you go for centralized exchanges since they have an easy-to-use platform and friendly customer service. 

Select the cryptocurrencies to buy

The cryptocurrency industry has gotten extremely popular in the past decade. At the same time, the process of creating a token or a coin has become relatively easy. As a result, the number of cryptocurrencies has surged in the past few years. 

There are over 20,000 cryptocurrencies, with a total market cap of around $1 trillion. Bitcoin and the other top ten coins account for more than 70% of the total cryptocurrency market cap. In addition to BTC, other popular digital coins you can buy are ETH, Solana, Polkadot, Dogecoin, and Cardano.

There are several types of cryptocurrencies. First, there are coins like BTC, SOL, and ETH that exist on their own blockchains. Second, there are tokens like SAND, MANA, and Shiba Inu that are built on top of other chains. Third, there are stablecoins that are backed by other assets like the US dollar and euro.

Deposit funds and buy the coins

After determining the cryptocurrency to buy, you should now deposit your funds and execute the trade. Some of the most popular deposit methods involve using wallets like PayPal and Skrill. You can also use credit and debit cards and bank transfers. After depositing funds, you should then select the amount you want to spend and complete the transaction.

Finally, you should select how you want to store your coins. Most people prefer storing their coins on the default platform provided by brokers. Others use cold storage tools that are not connected to the Internet. Cold storage wallets are usually safer than hardware wallets. Hot wallets, on the other hand, are easy to use and can be accessed from anywhere.

Summary

Buying cryptocurrencies like BTC and ETH has become an easy process. Besides, there are more than 600 centralized and decentralized exchanges (DEX) in the market. As you buy, remember to use best practices when storing your passwords. Also, always do your analysis to determine whether the coin’s price will rise or not.