Buying crypto is a much easier process than it was a few years ago; back in the day, people had to go as far as mailing physical money across the country (or world) to score some BTC.
Today, buying crypto is as simple as signing up for an exchange, going through the basic KYC (Know Your Customer) questions that exchanges must collect by law, linking your payment information, and buying your crypto of choice. You don’t need a high degree of sophisticated crypto and blockchain knowledge to purchase Bitcoin or any other coin.
When evaluating places to buy cryptocurrency today, you should consider the following factors:
- Can you trust the exchange? Most popular exchanges today are trustworthy, but things can get a bit seedy if exploring the more unknown exchanges. Coinbase, Gemini, Kraken, and UpHold are all solid options.
- How many different types of cryptocurrencies does the exchange offer? Some exchanges only offer a few dozen, whereas others offer hundreds of cryptocurrencies.
- What are the transaction fees?
- Sign-up bonus offers? Why not make some extra money signing up for a platform you want to use anyway? Don’t get too excited though, most of these are just like $10 to $20 or so.
In this article, we’ll guide you through some of the easiest ways on how to buy crypto and how to store your funds and keep them safe and sound. The most common way to start is through a cryptocurrency service platform, such as a centralized crypto exchange; we’ll review a few.
Before You Buy Crypto
The crypto market has thousands of different cryptocurrencies for buying, selling and trading. If you’re starting your crypto journey, the vast majority are a hard skip.
Lesser-known coins are subject to more extreme volatility and can be wiped out of the market in a blink. A large chunk of them might act as the flagship token of unreliable and unknown projects that serve no real purpose to the sector besides being a get-rich-quick scheme. On the other hand, the top 10 currencies have the largest market caps and the strongest communities.
How to Buy Crypto Using a Crypto Exchange
One of the easiest ways to buy crypto is through a well-established cryptocurrency exchange, like Binance or Coinbase.
Crypto exchanges allow users to buy, sell and trade digital assets. Some of these might have a broader display of products/services, such as staking, yield farming and crypto lending. But these companies are more directed towards experienced users as they convey a higher level of risk. For now, you should stick with more beginner-friendly exchanges such as Coinbase.
Before opening an account in any exchange, make sure it has a solid reputation in the space. You can narrow down if the platform is right for you by reviewing certain factors including:
- Security: has the exchange been hacked before? What security methods does it leverage? Does it have insurance/has most assets in cold storage (storing funds offline to mitigate cyber-attack risks)?
- Fees: does the exchange has simple and transparent fees? Or rather a complicated fee structure or hidden costs? How competitive are these fees compared to others?
- Supported assets: This shouldn’t be an issue for beginners, but it’s good to know how many currencies the exchange supports since not all list the same assets.
Now that we have that in mind, it’s time to open your account.
All exchanges have different registration protocols, so the information you need to provide varies. Generally, you need to provide your email and full name, type a password, and submit a government-issued document, like a passport, social security number or an ID card, to verify the account.
After your account is fully verified (some exchanges first require proper verification to allow you to start placing orders), you must link a payment method.
You can connect your bank account or use credit or debit cards (if the exchange supports their card deposits). Both options carry an underlying transaction fee (some exchanges may charge a deposit fee) though bank transfers are usually cheaper than card deposits.
Once you have funds in your account, you can place a buying order. This process differs depending on the exchange. Generally speaking, most platforms will allow you to use your USD funds to buy Bitcoin, Ethereum, or any other available crypto by simply entering the amount in dollars you want to buy in crypto.
Some other exchanges, like Kraken and Binance, present more buying options such as limit orders and market orders. The first allows you to place a purchasing order when the cryptocurrency hits a specific price, while the latter means you’re purchasing the asset at the current market price.
How to Buy Crypto With PayPal
PayPal allows users to buy crypto assets. You can purchase crypto directly via in-app using your PayPal balance, bank account or debit card linked to your PayPal account. Another way is sending funds from an external wallet.
For example, you can send crypto from your Binance account to your PayPal account:
- First, head to the Crypto Hub section on PayPal and copy the address from one of the available cryptocurrencies: Bitcoin, Ethereum, Bitcoin Cash and Litecoin.
- Once you have selected the currency you want to receive, paste the address onto Binance and confirm the transfer of tokens.
It’s the same process the other way around:
- On your Binance account, head over to Wallet and click on Deposits.
- Copy the Binance address of the cryptocurrency you want to receive.
- Go to PayPal’s crypto section, choose the asset you want to send, paste the Binance address, and click Send.
Note that PayPal generates a new address for each deposit. You could reuse an old address to send and receive crypto. However, it’s not recommended due to privacy and security reasons. For example, since the blockchain is transparent, a hacker could know the number of funds you have if you constantly use the same address, who you frequently transact with, and more. So an attacker might attempt to steal your private keys using several hacking methods.
Alternative Ways to Buy Crypto
There are a few ways to buy Bitcoin or other cryptocurrencies besides cryptocurrency exchanges and payment processors.
P2P (peer-to-peer) marketplaces are a popular way to buy Bitcoin but without the anonymity of decentralized exchanges. In a P2P marketplace such as LocalBitcoin, users can choose from a list of buyers and sellers and pick the person they wish to transact with directly.
Another method is buying crypto through online brokers such as Robinhood. But keep in mind some brokers that support crypto might not allow you to send your funds to an external wallet. This means your broker holds the private keys —a secret alphanumeric code that proves ownership of an asset— of your crypto and not you. This poses a risk —no matter how safe your broker, centralized or decentralized exchange is, they are always subject to cyber-attacks. We’ll expand on this point in another section.
Storing your Crypto Safely
If you bought Bitcoin or crypto, the best security practice is to store them outside any institution or protocol. Crypto wallets are usually the way to go, but it’s wise to differentiate between a hot wallet (online) and a cold wallet (offline).
Hot wallets (software wallets) connect to the internet via devices such as smartphones or computers. They are convenient to buy, sell, swap and store crypto assets directly on your phone or pc as they generate the private keys within those devices. However, hot wallets require implementing numerous security protocols since they pose several risks. For instance, your phone, computer or tablet gets stolen, hacked, or lost 2) the hot wallet suffers a security breach and your funds get compromised.
Cold wallets (hardware wallets) are small devices similar to a pen drive that doesn’t need an internet connection to store your crypto. Therefore they are usually considered the safest method to safeguard your crypto and stand far away from cyber-attacks. Some popular options are Trezor and Ledger, the leading hardware wallets in the market.
Remember the old crypto adage: not your keys, not your coins.
Final Thoughts: How Easy is to Buy Crypto?
If you’re new to the crypto space and you want to get your hands on some cryptocurrency, you might feel overwhelmed by the number of crypto assets and the technical jargon in the market. But it’s way easier than it seems. As we previously said, you don’t need a high level of knowledge on all things crypto —just some basic guidelines to start your crypto journey.
Whether you choose to buy Bitcoin or any other coin, you should always do some research about the exchange or platform. Ask yourself:
- Does the firm allow you to send your funds to external wallets?
- Has it been hacked before?
- Do they provide cold storage or leverage industry-standard security protocols?
It’s important to learn how to use a hardware wallet as it can help you in the future if you decide to move your funds offline.
Frequently Asked Questions (FAQ)
Can I Buy Crypto With Credit Card?: Buying with a credit card is the same as using a debit card or automated clearing house (ACH) transfers. Just enter your credit card info and authorize the transaction. But not many exchanges allow users to buy crypto using credit cards since card transactions are more expensive since they have several underlying processing fees which the platform passes on to you.
Is cold storage better than hot storage?: software wallets, while they can run multiple security protocols to safeguard your account, are always at risk of falling against sophisticated hacks and other types of attacks that could compromise users’ funds. Hardware wallets provide a higher level of security since they stand far from cyber-attacks.
Why is it discouraged to buy lesser-known assets?: If you’re a beginner in the crypto space, you’re exposed to several risks: people shilling worthless tokens, scammers trying to lure you into Ponzi schemes, and more. Most people in the crypto industry would advise you to go with the projects and cryptos that already have a proven record of transparency in the space, and have a product/service that provides something valuable to the industry instead of mere marketing strategies to get rich quick.
What are some of the most trusted cryptocurrencies in the market?: pinpointing the previous question, you can find a diverse library of crypto assets that are trusted by the crypto community in general. Some of them are:
- Bitcoin (BTC)
- Ethereum (ETH)
- Cardano (ADA)
- Solana (SOL)
- Binance Coin (BNB)
- Polygon (MATIC)
- Avalanche (AVAX)
- Aave
- Polkadot (DOT)
What are the best exchanges to buy crypto from?: There are several cryptocurrency exchanges with a solid reputation in the industry, such as Kraken, Coinbase, OKX, Gemini, and Huobi.
The post What Are the Best Ways to Buy Crypto in 2024 appeared first on CoinCentral.
