How and Where to Buy Bitcoin and Ethereum

There comes a point in a person’s life when they decide they want to buy cryptocurrency. You either see it as an investment, something cool to be apart of, or a hedge against the current system. Whatever your reason, you will soon realize there are a lot of different options and the choices can be complicated. Today’s post will help simplify the process and outline some options.

First things first, we need to understand what an exchange and a wallet are in the world of cryptocurrency. An exchange is where you can convert USD (or other currencies) to a particular cryptocurrency, such as Bitcoin or Ethereum. A wallet is where you store cryptocurrency. You can think of your wallet as a bank account. There are different versions of wallets for short term and long term holdings. An exchange is where you exchange your cash for cryptocurrency, very similar to services like E-Trade where you convert your money into stocks.

You may have heard about bitcoin hacks. Well, bitcoin has never been hacked, rather exchanges like Mt. Gox and Bitfinex were hacked. Exchanges should be seen as a short term holding place for trading between currencies. All long term holdings of cryptocurrencies should be done within a wallet.

When purchasing crypto, the first decisions you need to make revolve around how much do you want to invest overall, how large and how frequent are the installments, and which cryptocurrencies do you want to purchase? You can find a list of cryptocurrencies here.

Let’s assume you want to purchase Bitcoin and/or Ethereum, I would recommend using Circle, Coinbase, or Kraken. Circle is very similar to Venmo, but they support bitcoin alongside USD. Plus, it’s integrated by iMessages so you can pay your friends via text. My favorite feature is that there is no exchange fee between USD and bitcoin.

If you’re considering purchasing ether and bitcoin, then consider using Coinbase. Coinbase makes it really simple to setup an account and only charges a 1.5% exchange fee. You can also purchase via credit card for a slightly higher fee. As long as you are purchasing less than $2500 of cryptocurrencies at a time, this is a sound option. The only thing to look out for is Coinbase has sold Ethereum at a premium compared to other exchanges. Then again, they do have the simplest purchasing process.

For both Coinbase and Circle, I have outlined the pay structure below:

Coinbase:

1. Convert USD to BTC — 1.5%
2. Convert USD to ETH — 1.5%
3. Credit Card fee — 3.99%
4. Verify identity to increase $25 daily purchase limit

Circle:

1. Convert USD to BTC — 0%
2. Verify identity to increase ~$291 weekly purchase limit

If you’re looking to deposit more than $2500 or want to purchase any type of cryptocurrency beyond just bitcoin or ether then I would consider using Kraken. The process is a bit more complicated, but the fees are less. The process includes verifying your identity, setting up your bank account information, and then making a wire transfer (~$35 charge) directly to Kraken. Next, take the USD and convert to the cryptocurrency of choice. For some currencies it’s required that you do so only through bitcoin instead of directly with USD. Since Kraken is an exchange, once you have the desired amount of each currency you should store it outside of Kraken in a wallet like Coinbase or Circle.

Kraken:

1. Wire Transfer to Bank ($35)
2. Purchase cryptocurrency — ~$5
3. Withdraw ETH — $.06 per transaction
4. Withdraw BTC — $.30 per transaction
5. Exchanging between currencies — Negligible

To conclude, as the purchasing process becomes more simple, cryptocurrencies will become more popular and the price will adjust accordingly. Also, it’s important to note that you can purchase fractional amounts of any cryptocurrency. For example, you can buy .1 bitcoin for around $60. Lastly, be sure to check out the links above where you can get a $10 of bitcoin for signing up.

Good luck!

Spencer

Originally published at cryptobuzz.co.