The Ultimate Tech Guide on How to Purchase Cryptocurrency

by ddos · Published · Updated

Before you can explore the world of cryptocurrency, you need to purchase some, which can be tricky if you aren’t well-versed in the world of blockchains, exchanges, and crypto in general! There are so many options, but which one is the best? Each cryptocurrency has its benefits, and each has its drawbacks. The two most prominent, Bitcoin and Ethereum, are incredibly popular and form the basis of most other cryptocurrencies. However, with the proliferation of coins and tokens, you have many more options to choose from. In this article, you will learn the most common ways to start investing, including how to research a token, select a viable marketplace and learn crypto trading strategies

Research The Tokens You Want To Invest In

The first step you will take on your crypto adventure is to research the tokens you want to invest in. Currently, there are over 18,000 different tokens available on the market, meaning that you will have to spend some time researching which token is best for you. This step becomes even more vital as more tokens come online every week. While most of these will be worthless at best or a pump and dump scheme at worst, some could be worth your attention. 

For example, the latest entry and a somewhat lateral step is the introduction of the $APE coin from the NFT pioneers that brought you Bored Ape Yacht Club! Many people wonder how to buy APE as it has the potential to increase dramatically over time as its value becomes more apparent. A token like this has an advantage over its peers because it connects with the developers existing NFT offerings and has potential use in the metaverse. However, the critical takeaway is that you must carefully vet every option you are interested in to reduce the amount of risk you take on. There are several ways you can go about this, including:

  • Understand its purpose for existing: During Your initial research stages, you will quickly discover that most new coins have simply been developed for the purpose of investment, not utility. These coins tend not to hold up over time and should be avoided. Instead, examine why the currency has been developed and what the creators have in mind for its use.
  • Read the whitepaper: A cryptocurrency whitepaper is a document that explains a specific cryptocurrency’s technical details and its goals. It should outline the features and benefits of the coin and any risks or limitations.
  • Examine if it has any real-world use: When something has no real-world application, it usually doesn’t last very long. Only select coins with some kind of utility as these tend to grow over time. 
  • Take a closer look at the developers: Getting to know the people behind the token will tell you a lot. You can tell how serious they are and if they have ulterior motives and their roadmap for the coin. 
  • Check which blockchain tech it uses: Most new coins use the Ethereum blockchain these days, but it could be worth checking other blockchains to see if they provide additional benefits (staking being the most obvious example).

Select An Exchange That Lists Your Chosen Crypto

Once you have created a shortlist of cryptocurrencies you want to invest in, the next step is to select an exchange. A cryptocurrency exchange is a digital marketplace where traders can buy and sell cryptocurrencies. There are many cryptocurrency exchanges in the market today, each with its own advantages and disadvantages. Some of the top exchanges are:

  • Bitfinex
  • Bittrex
  • Kraken
  • Poloniex
  • Coinbase
  • Binance

Although selecting an exchange might look daunting, you can make things easier by seeing if they list your selected tokens. For example, if you are interested in purchasing $APE, you should find out which exchanges list it and proceed from there. But what do you do once you have selected a marketplace and are eager to begin trading? 

Sign Up For An Account

Before starting trading, you will have to sign up for an account. This isn’t an issue in most cases, but since most exchanges implement Know Your Client (KYC) standards, you will have to provide them with a range of information. This includes images of your passport, social security number, and other documents supporting your claim that you are who you say you are.

Connect Your Payment Provider

The exchange will ask you to connect a payment option after it has verified your identity. A debit or credit card can be connected to most exchanges, or your bank account can be directly connected. When buying cryptocurrency, it is not recommended to use a credit card because volatility could result in higher overall purchase prices. You might be left with having to pay more back to your bank than the underlying asset is worth.

Deposit Your Desired Amount Of Fiat

After connecting your payment method, you can deposit however much you desire into your account. This typically involves entering the exchange’s bank details and then manually wiring the money. 

Place An Order

It can take anywhere from minutes to days for your money to be deposited; it depends on your bank and exchange. However, you can begin trading and purchasing coins as soon as your account is credited. Each exchange has slightly different steps for this process, but it typically involves navigating to their trade page, selecting the pair you want to trade (e.g., USD/ BTC or GBP/ APE, etc.), and then placing the order. At this point, you should understand the exchange will likely take a small cut of the asset you are buying as a fee. Moreover, the fee and length of time it takes to facilitate the trade will depend on the token’s blockchain. 

Withdraw Your Crypto To A Wallet

Once you have bought your first token, you have two options:

  1. Leave it on the exchange
  2. Withdraw it to a wallet

Using a wallet ensures that your tokens are secure if the exchange is hacked. Many options are available, ranging from apps you use on your smartphone to physical drives that only work when plugged into your computer. Nevertheless, no matter what option you choose, you should take care when withdrawing; you will need to use a long string of numbers and letters called an address. Any mistake could result in your newly purchased cryptocurrencies ending up in a random person’s wallet.

Although most people are now aware of cryptocurrencies and have a vague idea of what they are, most are unsure how to purchase some. Hopefully, this post has provided you with enough information to get you on your way to buying your very first tokens.