What is cryptocurrency? How to buy cryptocurrencies?
It seems that everyone is talking about cryptocurrency and bitcoin: “Bitcoin is the future currency”, “Bitcoin is a bubble”, “Ethereum will soon overtake Bitcoin”, “Have you heard about this new ICO?”
The cryptocurrency community and the blockchain technology are growing in an extreme pace, so what all the fuss is about?
Bitcoin is a digital decentralized currency first introduced in 2008 by unknown person or group of people under the name ‘Satoshi Nakamoto’. Ten years later and Bitcoin managed to go from technically 0$ of worth up to almost 20,000$. In this time frame the cryptocurrency space grew from one single cryptocurrency to over 1,500 cryptocurrencies, from no exchanges to over 100 exchanges, from no use at all and ignorance to probably the most important and talked about invention since the internet!
So why bitcoin and blockchain is so revolutionary? Well, bitcoin made it possible to transfer value (money) between people from all around the world (as long as the person have internet connection) at relatively low cost and a relatively high speed WITHOUT any central organization or administrator (bank for example) that controls it. The blockchain eliminates the need of an intermediary that usually will charge you a fee for making the transfers.
So how can people trust each other without any intermediary? Here the miners come into play – in order to verify the transfers between people the ‘miners’ which can be anybody with an internet connection (even you) use computer processing power to solve mathematical problems which verify that the transactions are legit. It means that instead of one big central organization we get a decentralized wide community that rely on mathematical consensus.
Okay so now that you know a little bit more about bitcoin and blockchain I bet you excited to become part of the revolution! How can you buy cryptocurrencies?
As I mentioned above there are over 100 different exchanges where bitcoin and other altcoins are traded. The catch is that many of them allow you to trade bitcoin for different altcoins and vice versa but don’t allow you to trade them against fiat money (USD\Euro\whatever your local currency is). So I will cover first the exchanges that allow you to buy bitcoin and other major cryptocurrencies such as Ethereum using fiat money and then I will cover exchanges that allow you to trade major cryptocurrencies against less known altcoins.
Just so you know, many exchanges ask for a lot of private information – some exchanges ask for a photo of your ID and some can even ask for a photo of you holding your ID(!), be sure to read about the exchange before providing any private information about yourself. But don’t be worry the legit exchanges do it to protect you and others from scammers and will do nothing with your private information.
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The next 3 exchanges are some of the best out there, through this exchanges you can buy bitcoin or other major cryptocurrencies using fiat money, let’s begin:
Coinbase
One of the biggest exchanges with over 20 million customers, based in San Francisco – it supports 32 different countries. You can buy
Bitcoin\Bitcoin Cash\Ethereum\Litecoin by a bank transfer which will include 1.5% fee and 5-7 days until your funds will be available or by a credit card which will include 4% fee and your funds will be available instantly (Transfer times depends on the on the blockchain itself).
Using this link you will get 10$ if you purchase at least 100$ of cryptocurrency: coinbase.com
LocalBitcoins
LocalBitcoins is a great site available in all countries
where you can find people who are selling bitcoins in
your area, you can use any payment method (you can even meet with the person and buy it from them with cash)
and the fee that they charge is only 1% (the sellers determine the prices though so even if
the fee seems low the seller can ask for much higher
price than other exchanges offer so be aware of that)
Check it out: localbitcoins.com
Cex.io
Also a great exchange with over than 2 million users. Cex.io supports a lot more countries than coinbase does. You can buy Bitcoin\Ethereum\Bitcoin Cash\Bitcoin Gold\Dash\Ripple\Stellar\Zcash using with a bank transfer which include no fees or by your credit card which include a fee of 3.5% + 0.25$.
Check it out: cex.io
Okay so now that you got your bitcoin or other major cryptocurrency let's cover some exchanges where you can trade those coins for less known cryptocurrencies:
Binance
Binance is a great exchange! It's based in Hong Kong and available for all countries. The exchange has a high trading volume and large variety of coins. They are very active on the social media and have a decent customer support.
This exchange is growing very fast and has already over 5 million users!
If you are a beginner you should check it out, it's very user friendly.
binance.com
Bittrex
Bittrex is also a good exchange. It's Based in the US and available for most countries.
The exchange has lower volume compared to Binance but still is pretty high. The variety of coins is very large and you
can find a lot of coins that are only listed on Bittrex. The exchange is less active on the social media and their customer service is pretty slow.
This one is also user friendly and I myself find the charts much better than on Binance.
You can check it out here:
bittrex.com
Bitfinex
Bitfinex in my opinion is the best exchange!
Unfortunately Bitfinex does not support users from the US and they recently updated their minimum deposit to 10,000$(!) but if you are not from the US and have more than 10,000$ to invest I highly recommend you to check them out.
Bitfinex has one of the largest volume of all the exchanges, they are very active on the social media and have a decent customer service. The variety of coins is not very large but they have 2 main advantages in my opinion:
The first is their charts - they use the charts of TradingView which are awesome and very convenient, and the second and probably the best thing is - you can margin trade(!) - while on different exchanges you can only buy coins and hope they will rise on Bitfinex you can actually short them and make profit when coins are going down. Bitfinex also allow you to use up to 3.3X leverage on your money (which is very risky and I recommend you avoiding using leverage especially if you are a beginner).
Note 1 - If you very eager to trade on Bitfinex but don't have enough money for their minimum deposit requirement you can try and search for people who are selling their account - many people opened accounts before Bitfinex updated their minimum requirement and some of them are willing to sell them to people in your situation.
Note 2 - Bitfinex was hacked in 2016 - 72$ million worth of bitcoin was stolen! But, it's important to know that Bitfinex credited all the users that lost money with BFX tokens equal to the amount they lost and since the hack Bitfinex claim that they significantly improved their security.
You can visit their site here:
bitfinex.com
Some Helpful tips:
- Create account at the exchange as soon as you can! Even if you are not interested in buying/trading bitcoin or other cryptocurrencies right now I recommend you to open account right now, it doesn't cost you money and if you wait exchanges can add different requirements as Bitfinex did with their minimal deposit requirement of 10,000$ which didn't existed before. Also, many people usually open accounts when they want to buy bitcoin/altcoins because of some news or because the prices are going up. This was the case in the last rally of bitcoin to 20k and I personally some people who missed that rally because they been waiting for their accounts to be verified by the exchanges. The verification process can take a lot of time - days and even weeks and in the last rally so many people wanted to join the party that many exchanges couldn't manage the pressure - the verification process took much longer and some exchanges didn't even allowed new users to register (some people took advantage of the situation and offered accounts for sale - sounds crazy huh?).
- Create several accounts in different exchanges - there are some reasons you may want to have more than one account:
- Variety of altcoins - different exchanges may have different altcoins - there is no worse feeling than seeing a coin going up but not having the option of buying it because it doesn't listed on your exchange
- Maintenance - sometimes exchanges may be offline for maintenance - the process can last few hours and sometimes even days - if you have only one account at a single exchanges you will be unable to trade through the whole maintenance time.
- Safety - it may sound gloomy but exchanges can be hacked. It don't happen very often but it happened enough times to be concerned. When you use multiple accounts with different exchanges you split your money and reduce the risk of losing all your money in case one of the exchanges get hacked.
- Read my other post about 'Cryptocurrency Security' to keep your coins safe.
Hope this information was helpful!
Good luck!
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