Cryptocurrency is a digital currency that can be used in place of traditional money. A cryptocurrency is a digital or virtual currency designed to work as a medium of exchange and use cryptography to secure its transactions, control the creation of additional units, and verify the transfer of assets. Cryptocurrency is a type of crypto token that uses blockchain technology as a way to secure and verify transactions on the network.
Financial advisors like SoFi say, “Crypto is decentralized, meaning that it is not controlled by a central authority like a bank or government.”
Now that you know what cryptocurrency is, it’s time to figure out what cryptocurrency you actually want to buy. You first need to decide on the type of digital currency you want to invest in.
Many different types of cryptocurrencies are available today and have different characteristics (e.g., Bitcoin vs. Litecoin). Some are more privacy-focused, while others are purely utilitarian coins built upon a particular use case, such as Ripple, which aims at banking integration or Steemit, which is used as a compensation system for content creators on their platform.
A wallet is a software program that you can use to store, send, and receive cryptocurrencies. There are different types of wallets, but the basic purpose is always the same: to keep your cryptocurrency safe. Having one is important because it gives you control over your money and lets you make transactions without needing to rely on an exchange or third-party service. As long as your private keys are safe, only someone with access to them can access your coins in the event of theft or loss.
The first step in buying cryptocurrency is to choose a payment method. There are several options you can use, including:
- Bank transfer
- Credit/debit card
- Cryptocurrency (for example, Bitcoin)
Where can you buy cryptocurrency? If you’re just starting with cryptocurrency, choosing the right exchange is important. Hundreds of exchanges are currently available to buy cryptocurrency, but many aren’t trustworthy.
Here are some questions to ask yourself when choosing an exchange:
- Do I want to buy Bitcoin or Ethereum? If so, which one?
- Will your country allow you to purchase cryptocurrency on this exchange?
- Does it use the payment method of your choice (credit card, PayPal)?
After you’ve submitted your application, you will have to wait for approval. This can take up to several days or weeks, depending on the company and the type of verification required.
When it comes time to submit your documents, there are three general types:
- Proof of identity (or “selfie”)
- Proof of address (typically a utility bill)
- A document that proves your income
If you’re new to the world of cryptocurrency, buying your first coins can be a daunting task. This guide has helped clear up any confusion and guided you toward purchasing your own crypto. Remember that no matter what type of cryptocurrency you choose, there will always be a place where it can be purchased! Happy trading!