I know you’ve been hearing about cryptocurrency for a while now, if so the next thought that will come into your mind will be how to buy Bitcoin which is the most popular cryptocurrency right now on earth. But should you really start with Bitcoin? What are the chances that Bitcoin will make you rich? What are other alternative cryptocurrencies one can invest in?
In this post, I’ll not just share with you where and how you can buy cryptocurrency, but I’ll also reveal to you what you should know before investing in any cryptocurrency.
In my previous post, I explained what cryptocurrency is and why it has been popular over the years.
Let’s go straight to the point.
Step by step Guide on How to buy cryptocurrency
1. Choose a good Crypto Exchange
To purchase cryptocurrency, first, you need to pick which crypto exchange you want to use. Not all crypto exchanges are allowed in some countries, so you need to use an exchange that is available for your country. for instance, if you are in Nigeria it will be difficult to use exchanges like Coinbase Pro, crypto.com etc. meanwhile Binance, Okex, Roqqu, Kucoin, Hotbit are popular crypto exchanges for Nigerians.
I know you might be wondering what a crypto exchange is.
What Is a Cryptocurrency Exchange?
A cryptocurrency exchange is a platform where buyers and sellers meet to trade cryptocurrencies. Exchanges often have low fees, but they tend to have more complicated interfaces with various trade types and advanced performance charts, which can make them difficult for crypto newbies.
Some of the most well-known cryptocurrency exchanges are Coinbase, Kucoin and Binance. While these companies’ standard trading interfaces may confuse beginners, particularly those without basic trading knowledge, they also offer user-friendly secure purchase options.
You can check out my previous post on the best crypto exchanges you can use wherever you are in the world.
2. Create and Verify Your Account
Once you decide on the cryptocurrency exchange to use, you can register to open an account. Depending on the platform and the amount you want to buy, you may have to verify your identity. This is an essential step to prevent fraud and meet federal regulatory requirements.
You may not be able to withdraw out your cryptocurrency until you complete the verification process also known as KYC. The platform may ask you to submit a copy of your driver’s license, national ID or passport, and you may even be asked to upload a selfie to prove your appearance correspond with the documents you submit.
Read also: What is Cryptocurrency?
3. Deposit Cash to Start Buying Crypto
The third step is to deposit cash in your exchange account to start buying crypto. You might deposit funds into your crypto account by connecting your bank account, paying with a debit or credit card or allowing a wire transfer. Depending on the exchange you are using and your funding method, for some exchanges you may have to wait a few days before you can use the money you deposit to buy cryptocurrency, while exchanges like Binance allows you to use your deposited funds for purchase instantly.
Take note of this: Some exchanges allow you to deposit money from a credit card, but doing so is extremely risky in most countries — and expensive. Credit card companies process cryptocurrency purchases with credit cards as cash advancements. This means that they’ll charge higher interest rates than regular purchases, and you’ll also have to pay additional cash advance fees. For example, you may have to pay 3% of the transaction amount when you make a cash advance.
This is aside from any fees that your crypto exchange may charge; these can run up to 5%, meaning you might spend up to 8-10% of your crypto purchase on fees.
If you are from countries like Nigeria, China etc. that restrict the usage of bank credit cards for crypto transactions, don’t bother using your credit or debit card to avoid your losing your bank account.
Nevertheless, another best way to deposit funds in your exchange account is via P2P. Though not all platforms allow P2P (peer to peer) transactions. Crypto exchanges like Remitano and Binance are the best for p2p transactions.
How to Deposit on Binance via p2p
Follow the below steps and tips in order to successfully buy USDT, BTC BNB or ETH on Binance without getting scammed.
a. open your binance app (I’m using app in this post because 99% of those reading this have Binance apps and majority don’t have PC, nevertheless, the procedures are same on PC, though the interface is different).
b. tap on P2P trading
c. Select the coin you wish to buy from the top options, if you want to buy other alt coins that are not in the above options, you can buy stable coins like busd, usdt or buy btc if the currency is paired to btc.
d. select the vendor you want to buy from depending on the quantity he or she has and the price he’s selling and tab BUY.
e. put in the price you wish to buy, if you want to buy all then tab ALL, then tab buy USDT. (Note that you have to buy stable coin of $10 and above in other to be able to spot trade with it).
f. Tab Chat send the seller a message or to get the sellers phone number. its always adviceable to hear from the sekker before sending money to his or her account.
g. then tab Transfer page below to see his or her banj account details. (while making payment, make sure you don’t include any crypto-rlated words like crypto, btc, usdt).
h. after making payment to the sellers account, come back to binance and tab paid and wait for some while for the sekker to confirm and release the crypto to your Binance account.
once the seller confirm from his end, the crypto you bought will reflect in your Funding wallet in Binance.
4. Place Your Cryptocurrency Order
Once there is money is in your account, you can now place your first crypto currency order via spot trading. There are hundreds of cryptocurrencies to choose from, ranging from well-known names like Bitcoin, Ethereum, Dogecoin to more obscure cryptos like Shiba Inu or AVAX.
When you decide on which cryptocurrency to purchase, you can search its symbol—Bitcoin, for instance, is BTC.
With most exchanges, you can purchase fractional shares of cryptocurrency, allowing you to buy a fragment of high-priced tokens like Bitcoin or Ethereum that otherwise take thousands of dollars to own.
Below are the 10 biggest cryptocurrencies based on their market capitalization:
MMS Cash Token (MCASH)
Binance Coin (BNB)
5. Select a Storage Method
Cryptocurrency exchanges are not backed by protections like Banking Protections, and they’re at risk of theft or hacking. Your investment can even be gone forever if you lose or forgot your recovery phrase to access your account. That’s why it’s so important to have a safe storage place for your cryptocurrencies.
As stated above, if you’re buying cryptocurrency via an exchange, you may have little to no choice on how your cryptocurrency is stored. If you purchase cryptocurrency through an exchange, you have more options:
- Leave the crypto on the exchange. When you buy cryptocurrency, it’s typically stored in a so-called crypto wallet attached to the exchange. If you don’t like the provider your exchange partners with or you want to move it to a more secure location, you might transfer it off of the exchange to a separate hot or cold wallet. Depending on the exchange and the size of your transfer, you may have to pay a small fee to do this.
- Hot wallets. These are crypto wallets that are stored online and run on internet-connected devices, such as tablets, computers or phones. Hot wallets are convenient, but there’s a higher risk of theft since they’re still connected to the internet. e.g are Trustwallet, MetaMask, Slope Wallet etc.
- Cold wallets. Cold crypto wallets aren’t connected to the internet, making them your most secure option for holding cryptocurrency. but they also have their disadvantages as well. They are external devices, like a USB drive or a hard drive. You have to be careful with cold wallets, if you lose the keycode associated with them or the device corrupts or fails, or you misplace it, you may lose your cryptocurrency forever.
How do I decide which cryptocurrency to invest in?
This is one of the basic question most crypto noobs do ask. most people get confused about the crypto asset they should invest in.
- The first thing you should know before buying any crypto asset is that you are buying the market cap at the moment not the coin price. therefore before jumping into any crypto project check its market capitalization at the time you wish to buy. that will determine if the coin is cheap enough to buy or not.
- check the use case(s). one place you can see that is on their website and their whitepaper.
- check the numbers of people that are interested in the project.
I believe you’ve now seen for your self how to buy your first cryptocurrency and how to determine the crypto to invest in. and the last tips are also the basic things any crypto newbie should note before investing in any crypto project.