Everything should be governed by ONE major rule- Either you do it well or don’t do it at all. Even with its glamor, the nascent digital currency market is capable of driving you crazy. Not with the profits but with the losses incurred when learning how to buy cryptocurrency for the first time.
How careful you are at this stage can make a mammoth difference between enjoying and regretting why you let the thought of investing in digital currencies cross your mind.
Now that you are here, we shall take a step by step analysis of how to buy cryptocurrency on any exchange. As a bonus, we shall briefly discuss the pitfalls to watch out for when taking your first move into cryptocurrency land.
How to buy cryptocurrency on any exchange
Although different cryptocurrency exchanges have localized rules and regulations for anyone seeking to use their platform to purchase crypto, a bigger portion of these rules are common in all the platforms. Below are FOUR things you will encounter on any crypto exchange.
How to buy cryptocurrency: Account opening
With regulators tightening their watch on virtual currency exchanges for money laundering and terrorist financing, each platform requires that a new user creates an account. During this process, the exchange will require that you use your real (government known) names, an accessible email, your cell phone number, residential address, etc.
The next step in the account opening process is the verification stage. Here, the crypto exchange will require you to upload a government-issued document such as a driver’s license, passport, national identity card, etc.
The last and equally crucial part of the cryptocurrency exchange account opening process is the 2-step verification. This will greatly determine how easy or hard hackers can gain access to your account and subsequently lose everything. Since you are planning to board the crypto train and buy cryptocurrency, once hackers have your coins, there is no way to recover them. Gone means Gone.
The 2-factor verification method is whereby to log in to your account, you have to provide authentication from two sources. For example, after entering your email and password, the exchange will send a code to your phone (on the number you registered with) and after entering the code on its field will you be given entry into your account.
Resetting your password and account details will also require you to have access to both the verification methods.
How to buy cryptocurrency form any exchange: Storage
Now that you have your account, the next concern is where to store your coins. cryptocurrency wallets. Wallets come in three different forms, hot, software, and cold. The difference in all these three forms is evident in the way you store and access cryptocurrency.
This wallet is always connected to the internet, it’s very easy to set up, but unfortunately, it’s the least secure.
With this type, you will have to download an application either on your computer or your mobile device. Although it has a greater security level that the hot wallet, it still lacks optimum security.
This is the safest cryptocurrency wallet available today and it should be your ultimate choice when you want to buy cryptocurrency. This wallet is in the form of a USB drive which is specialized to store virtual currencies. It is only brought online (connected to the internet) when you want to transfer or store coins.
NOTE: Not all cryptocurrency wallets are capable of storing more than one coin in the same wallet. Some may only store, ether, bitcoin, NEO, etc.
How to buy cryptocurrency from any exchange: Choice of cryptocurrency
Cryptocurrency exchanges have differing number of coins listed. Therefore, you should closely inspect the number of coins listed to ascertain that the one you want to buy or trade-in is listed.
How to buy cryptocurrency from any exchange: Cryptocurrency exchange
Although this point may be off the topic, it is very important.
If it’s your first time to buy cryptocurrency, always chose a reputable cryptocurrency exchange with lots and lots of positive reviews. Respected platforms have a user-friendly interface which will help you enjoy the process of buying your first crypto. Coinbase leads the pack of respected and user-friendly crypto exchanges for those within its geographical reach (United States of America).
How to buy cryptocurrency from any exchange: Pitfalls
Surprisingly, all the above points are the same mistakes new cryptocurrency traders make when they are buying cryptocurrency for the first time. i.e, they use the wrong exchange, they don’t follow all the steps when opening an account, they assume any exchange will have their preferred coin listed by default, etc.
Another major pitfall that causes traders to lose millions of dollars is buying into scams. In the cryptocurrency space, not everything their quacks like a duck is actually a duck.
Additionally, when just getting your feet wet in the cryptocurrency market, buy one or two cryptocurrencies and build your portfolio as you learn the ropes on this other part of the world.
See you on the other side!