Cryptocurrency transactions usually involve buying, selling, or trading on a beginner level. If you’re new to the crypto world, you can buy cryptocurrencies on a cryptocurrency exchange platform.
A cryptocurrency exchange platform is a place where numerous cryptocurrencies along with their prices are enlisted. You can either buy, sell or trade cryptocurrencies on it. These platforms are similar to your traditional stock exchanges.
In stock exchanges, there are different companies listed along with the price of one share. Here you can buy, sell, or trade stocks of various companies. Similarly, with cryptocurrency exchanges instead of trading shares/stocks of various companies you are trading with cryptocurrencies.
These transactions are verified and validated by people on the network. These people are known as miners.
So if you’re a beginner, here’s how you can buy your first cryptocurrency.
How To Buy Your First Cryptocurrency?
- Research on the kind of cryptocurrency that interests you. As I mentioned in the previous lessons, there are different types with different purposes. Find out which excites you the most. Also, see how its prices are performing (surging or dipping) and then decide the crypto you want to buy.
- Find out what exchange is the best option. Usually, you need to consider the trading prices, security, customer support, and, most importantly, how easy it is to use. A few examples of crypto exchanges are Binance, Paxful, LocalBitcoins, etc.
- Now, signup or register yourself on the platform. You can mostly sign up using your email ID or phone number. However, certain exchanges require you to verify yourself with a KYC (Know Your Customer) process. The platform wants to ensure that you are an authentic user and asks you for verification documents like your driver’s license or government-issued ID. Once the verification is complete, you’re eligible to buy your first cryptocurrency.
- There’s usually a Buy tab present on the exchange. Now you can buy your first cryptocurrency by depositing fiat/real-world currency into the platform’s wallet. The deposit amount usually has a daily/monthly limit and what type of currency the platform supports. So bear this in mind while choosing the exchange as well.
There’ll also be a fee that you need to pay for depositing an amount. This fee varies from platform to platform.
5. Once you’ve deposited the amount, you can now select the cryptocurrency you want to buy. There are usually three types of orders via which you can do so:
- Market orders mean that you will immediately buy/sell the cryptocurrency at the best price available at the time.
2. Limit orders mean that you set the maximum price you want to buy/sell the crypto asset.
3. Stop orders mean that once the crypto asset’s price reaches a certain amount, you can buy/sell it.
6. So once you’ve placed the order and paid the transaction fee, you will receive your cryptocurrency in the wallet. And voila! You’ve just bought your first cryptocurrency.
The process for selling is similar to this. You can sell your crypto to the exchange or trade with another cryptocurrency.
However, you can also directly send or receive cryptocurrencies from other people. For this, you’ll need a virtual wallet where you can store your cryptocurrencies. You can then send or receive the assets by knowing the other person’s wallet address.
This way, you can transact with crypto assets as a beginner. However, the deeper you delve into this subject, the better you’ll understand the market, how different assets perform, the different ways of trading, and a whole lot more!