We have had a few requests asking how to purchase Cryptocurrency, so we thought we’d do a quick post for those interested.
There are different ways and different platforms to purchase Bitcoins and ‘alt Coins’ (alternative currencies such as Ethereum, Ripple and Litecoin) Cryptocurrency.
The majority of people buying and selling Cryptocurrency prefer to use exchanges. On a Cryptocurrency exchange you can purchase Bitcoins and alt coins using your fiat currency (USD, Sterling Etc). Some Cryptocurrency exchanges will only allow you to purchase ‘alt coins’ using Bitcoin. You will first have to purchase Bitcoin and exchange it for alt coins if you so wish.
I find the easiest and most user-friendly exchange for beginners is ‘Coinbase.’ Once you’ve opened an account with Coinbase you will have to verify your ID and enter your Bank details in order to make purchases.
You can access Coinbase on your browser or via your phone using an their app. Coinbase currently supports Bitcoin, Ethereum, Litecoin and Bitcoin Cash (available from January 2018). If you want a wider variety of ‘alt coins’ you will have to use more advanced platforms.
Coinbase is a great platform for beginners; once you are acquainted with Coinbase you can then move on to more advanced platforms such as GDAX, Bitfinex, Bitstamp or Poloniex.
Your purchases on Coinbase and other platforms are stored in ‘wallets.’ See below for more information on wallets.
BUYING A CRYPTO USING TWO PLATFORMS
As you’re getting used to Coinbase you may decide to purchase an ‘alt coin’ that is not available on the Coinbase platform. You can purchase Bitcoin using Coinbase and then transfer that Bitcoin to another platform, for example, Bittrex and trade the Bitcoin for your desired ‘alt coins.’
Do i need to buy a whole bitcoin?
There is a misconception that in order to purchase Cryptos you have to buy a whole coin. You can decide, for example, to purchase $10 worth of a Bitcoin if you so wish. (For some of the Cryptocurrencies that are of much lower value, you may need to purchase a whole coin or multiple coins, depending on the platform you use.)
What are wallets
Wallets are where you store your Cryptocurrency. You will need a different wallet address for each Crypto you have. For example, you cannot put Bitcoin into an Ethereum wallet and vice-versa. There are many different types of wallets:
Wallets which you download and install on your computer. They will only be accessible on your computer. However, if your computer gets hacked or breaks down, you could lose your wallet with the Cryptos.
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Accessible anywhere, which makes it great for easy access, but again if it gets hacked you could lose your Cryptos.
Your private keys get stored onto a special USB. In order to transfer Cryptos you plug the USB into any computer, enter a pin and make the transaction. Different hardware wallets offer different facilities, so make sure you conduct your research before purchasing one.
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Probably the most secure way to store Cryptos. It can literally be a piece of paper with your Private and Public keys written down on it.
We shall post more about Wallets and how they work in the near future.
Example of transferring between Wallets
Using the Coinbase example; once you open up a Coinbase account it will automatically create wallets for you (Ethereum, Litecoin, Bitcoin and Bitcoin Cash). When you purchase a Crypto on Coinbase it will deposit that Crypto into the correct wallet.
In order to be secure, you might prefer to use ‘hardware’ wallets instead of an on-line wallet (which could potentially get hacked). For example, you could purchase 1 Bitcoin on Coinbase and then transfer the ‘private keys’ to a ledger wallet.
For more information see Coinbase’s post on how to transfer into another wallet.
Using etoro instead
Etoro has attracted many individuals who are interested in buying Cryptos. Their platform is fairly easy to use. Etoro also offers a ‘demo’ mode which you can use prior to depositing your money. If you do open up an etoro account then I would recommend using the demo mode first in order to famailiarise yourself with the platform.
Due to its ease of use, many use etoro for buying an selling Cryptos on a daily basis. When you buy on etoro they hold the coins for you in a wallet in which you currently cannot access. This means that you cannot transfer to or from your wallet. You simply buy and sell Cryptos without transferring between wallets.
Etoro also has its own app so you can monitor your cryptos performance on the go.
We hope this simple guide assist you. We shall post further information in the near future. In the meantime, we hope you all have a great Christmas.
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We are not investment or financial advisors and are here to provide news and our opinions. Please be fully informed regarding the risks and costs associated with trading the financial markets and the Cryptocurrency market, it is one of the riskiest investment forms possible.