Buying Cryptocurrency
The idea of investing hard earned money into a new form of investment may seem daunting, especially when words like “scam” and “ponzi” can often be found in the same sentence with cryptocurrency. Luckily, there are platforms that have put in security and privacy measures to help ensure protection from such actions. The path to participate in the world of cryptocurrency and make your first investment can be quite simple with just a little research and a few steps.
What is a cryptocurrency exchange?
Unlike traditional banks where government issued currency(fiat) can be deposited, withdrawn, and exchanged, in order to do the same with any digital currency, transactions need to be done differently. A cryptocurrency exchange is a platform that allows buyers and sellers to trade cryptocurrencies and digital assets to fiat currency or other digital assets.
And although there are some that may seem a little bit sketchy, many are legitimate exchanges that are insured, have regulations, or are licensed by their respective national governments. Each exchange may charge fees on transactions, but these institutions provide efficient trading markets that wouldn’t otherwise be available.
How to Use and Exchange
Many people begin their cryptocurrency journey by buying Bitcoin. For that, you need to choose an exchange that allows you to onramp your fiat. For someone in New York, they can use Coinbase, GDAX, or Gemini to exchange the US Dollar, while people in Korea can use Bitthumb, Upbit, or Korbit to exchange Korean Won. Finding a website suitable for you will entirely depend on your location and which fiat currency you intend to trade. Another point of research before selecting an exchange are the fees. The basic ones to look for are the ones that may be required during deposits and withdrawals. Depending on what type of currency is transferred into or eventually taken off the exchange, the fee attached to the transaction may be minimal, but also worth comparing (some are free!).
In most cases as preventive measures for security hacks, once an account has been created, verification of identity will most likely follow. Exchanges will vary in the levels of this security, but it could be as simple as providing an ID/passport and also allowing 2-factor authentication.
This basic, preventive verification should not be a deterrent as most people would want the least probable way of ever getting hacked.
Once you do your research and find an account that fits your requirements, a transaction can be as simple as clicking a button or as involved as setting the exact price and quantity at which you’re willing to buy or sell. Most platforms offer an interface that accommodates both new users and professionals, so options can be as simple to complex as one needs.
Storing a new purchase
After an order is submitted and fulfilled, newly acquired Bitcoin can be left on the exchange to be moved around quickly, or it can be stored away on what is known as a wallet. These can come in the form of software, hardware, and even paper, but wallets are especially recommended if owners intend to hold long-term because they remove the threat of losing everything in an exchange hack, which are known to occur from time to time.
Closing Thoughts
As more and more exchange services appear in the cryptocurrency space, you do not have to worry about the lack of options, but rather figure out which one(s) will suit your immediate and perhaps long-term needs. So whether you’re looking to buy your first Bitcoin or want to speculate on one of the thousands of other coins currently available, more than likely there is an exchange out there for you.
