A 6-Point Step Guide in Buying Cryptocurrency
Everyone is trying to find the next big thing these days. When it comes to choosing various financial assets, many experts often consider cryptocurrency as one of the most popular and widely-discussed financial instruments in the market today. There are so many coins to choose from, and one can easily become overwhelmed if they are unprepared on how to buy cryptocurrency at the right place and the right time.
To get yourself ready to buy digital coins, here is a step-by-step guide on how budding investors everywhere can effectively purchase and use cryptocurrency:
1. Research on various cryptocurrencies
According to Coin Market Cap, there are currently over 2,000 cryptocurrencies available worldwide. With so many options one can choose from, it can become overwhelming to decide which coins you should invest in. Here are some ways that you can choose the kind of cryptocurrency you should be buying:
You should see how much the cryptocurrency costs. Bitcoin is currently the most expensive cryptocurrency but its value is declining. If you want to make profit off of cryptocurrency, try buying one of those coins that are under a dollar each and wait for it to become more expensive in the future. To make it relatively simpler to buy, it does help to research on the values of these crypto coins.
Cryptocurrency and other digital coins capitalize on their functionality. With so many features and relative uses, it's safe to say that not all crypto and altcoins are created the same. If you prioritize on features then you can sacrifice budget since most of these functional coins, like Bitcoin, are more expensive than others.
The potential of the cryptocurrency actually talks about the actual blockchain technology and the team behind the development of this currency. If the team behind the coin have launched a lot of other successful coins then it would be a good long-term investment to buy their newer ones.
To narrow your choices, consider looking at the top 10 currencies on the list as well as potential ICOs for altcoins. This allows you to have a diverse set of assets in your portfolio.
2. Make sure cryptocurrency is legal in your home country
One of the most important factors to consider prior to choosing an exchange platform is to first check on whether or not cryptocurrency is legal in your country. As of 2018, there are more than a handful of countries that do not allow Bitcoin and other digital coins such as:
- Although they might change this in the future since they offer other alternatives to Bitcoin or altcoins like NEO.
- Indonesia and Vietnam. In these Asian countries, it's okay to hold cryptocoins, however, it is illegal to use them as a means of payment
Most European countries are okay with cryptocurrency trade and usage, however, you still need to check on your own locality. Some countries are slowly opening up to the opportunity crypto coins can offer, it’s best that you should avoid any possible legal troubles that might arise with participating in cryptocurrency trade.
3. Consider on the kind of exchange platform
An exchange platform is a place where you can buy and sell cryptocurrency legally. When deciding on an exchange platform, it helps to make a comparison of these features with each other as well as how it can benefit you as a trader. If you are looking for a versatile platform, then look for one that can handle a wide range of fiat as well as digital currencies. Many of these platforms include:
- Fiat currencies
- List of cryptocurrencies
- Paying methods
- Deposit options
- Additional fees that are added to their list of services
4. Invest in a cryptocurrency wallet
A cryptocurrency wallet is a software that stores private keys and sensitive information that enables you to have access to your cryptocurrency account,. Many of which are able to handle Bitcoin, Ethereum, and other currencies. Several exchange platforms available also include offering crypto wallets which allows traders the chance to save time and energy.
However, if you plan to deal with various coin types, it helps to diversify your types of wallets which come in two types:
- Hot or Software wallets- which include desktop, online, and mobile crypto wallets that are easily connected to the internet
- Cold or Hardware wallets - which are similar to flash drives that can be plugged into your device
If you’re planning to use your cryptocurrency for multiple transactions then it’s better to get a hot wallet that’s easily accessible. However, if you’re planning to keep your currencies for the long haul then you can go for a cold wallet that can be safely kept until you need to use it.
5. Choose your payment method
Once you select your cryptocoin and got your wallet ready, it’s time to start buying your cryptocurrency. Many platforms offer a wide range of payment methods that include credit and debit cards, wire transfer, and even online money transfer services. Make sure to confirm your payment and the amount of coins you intend to purchase before clicking submit.
Here are some of the payment methods available for purchasing cryptocurrency depending on the platform:
- Credit Card
- Debit Card
- Bank Transactions
6. Designate your coins
Each crypto wallet is assigned an address that allows cryptocurrencies to transfer digitally. In your exchange platform account, you can transfer the counts in your account to your wallet’s address which you can then access with a private key. Make sure not to store too much coins in one wallet since it can still be subject to tampering and other malicious activities.
Depending on your wallet type, you can then proceed to using your crypto coins as you please. For instance, if you have an online crypto wallet, you can use the amount of coins you store in them to buy various items on shops that accept cryptocurrency as a means of payment. If you are looking to save your coins and do not wish to access them until absolutely necessary, you can store them in hardware wallets which you can also take with you on-the-go.
Certain factors should be taken into consideration such as the equipment you will need as well as the exchange platforms when it comes to buying cryptocurrencies. Since cryptocurrency are still subject to miscellaneous fraud, investors are advised to practice precaution before they start to buy and sell these financial assets.
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