The process to Buy Cryptocurrency
Cryptocurrency is entirely different from traditional currency. The latter gives a physical possession of things, while the former gives a digital wallet. Those aware of the crypto world would know what a crypto wallet consists of. It usually comes with an address, a public key, and a private key. So, how do you buy cryptocurrency or precisely a crypto wallet? Here’s how.
Buying any cryptocurrency involves a series of steps. Let’s get to the details.
- Choose the Medium
Any purchaser will first begin by choosing how you want to buy cryptocurrency. As in, you need to choose a broker or a crypto exchange for the purchase. The purpose is the same either way, but some aspects differentiate the two.
Exchange – platforms providing different cryptos. Here, you can have wallet storage, interest-bearing accounts, etc. Here you can have various currencies to choose from.
Broker – online brokers show different ways to buy cryptocurrencies along with different other assets like stocks, etc. Here you’ll have low trade costs and limited currency types.
There is an undeniable convenience with brokers but, we cannot guarantee their credibility. So, it is best to choose an exchange to make the purchase.
- Create your Account
You’ll need to create an account by signing up with the exchange or broker you chose. Established and large exchanges usually ask for your identity verification to prevent fraud. You may also need an identity based on the package chosen. You can start using the account after proper verification in most cases.
- Make a Deposit
Once you created an account and the exchange or broker verifies the same, you’ll need to make a deposit. It can either be through a wire transfer, linking the bank account, or anything as asked by the source. Remember the trading fee when making a deposit or a withdrawal. Ensure that your account has sufficient funds for these.
- Place the Order
It is now time to place your cryptocurrency order. Numerous cryptocurrencies like bitcoin, altcoin, Ethereum, etc., are available for trade. You can choose the currency you’ll need and place your order. One thing to note here is the availability of the currency. Not every source offers all the cryptocurrencies available in the market. So, it is best to verify this with the source before initiating the process.
- Select the Storage
Most people consider the process complete as soon as they place the order. However, you’ll need to choose the storage to ensure security. Since there is no governing authority for cryptos, it is upon the buyer to take care of their assets. Brokers usually don’t give this option and leave their assets vulnerable. Exchanges come in handy and provide the following options –
- Exchange– you can leave your assets in a crypto wallet linked to the exchange.
- Hot Wallet– here, you’ll store the wallets online and access them through internet-connected devices. This method is a little risky.
- Cold Wallet– here, the wallets are in external devices like hard drives, etc. This is the most secure way to store your assets.
You can now start trading after this process and improve your assets.