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How To Buy Cryptocurrency: Beginners Guide to Investing in Bitcoin & More

FINANCE

MICHAEL OWEN, Lead Finance Writer

January 9, 2018

The rise and popularity of cryptocurrencies has taken the world by storm, I don’t think anyone could have imagined how powerful the cryptocurrency train would be. We can prove this by examining the price of Bitcoin in September 2017, which was approximately $3,000, then fast-forward 3 months and suddenly a single Bitcoin is worth $16,000. Many people overlook the technology behind many of these cryptocurrencies and take them for face value. Blockchain is what makes these digital assets value and how they are applied.

Blockchain technology acts as an public database that is decentralized in nature, meaning that the data held within it isn’t housed and stored in one central location. This has extreme benefits, because it makes it increasingly difficult for cyber attackers to potential damage or corrupt the data. The whole point of a public ledger system is that everyone on that network has a copy of the ledger, so all transactions can be verified and continually reconciled.

Now that we’ve gone over why cryptocurrencies have become so popular, and the technology behind them is what is going to build the future, let’s go over how you can actually buy some of these cryptocurrencies.

Purchasing cryptocurrencies is easier than you think!

Firstly, you’re going to need a place to store these coins, and in this case one of the best ways to do that is to get yourself a wallet. Or more specifically an offline wallet. This type of storage is a device that looks much like the USB drives that we store documents on, however these wallets are far from USB drives. They are becoming increasingly popular, because they have found themselves to be a very good defense against thieves. There are a number of very good offline wallets that you can purchase from the likes of Amazon.com but it is up to you to do your own due diligence and find out which one is right for you. Some of the main advantages to owning an offline wallet is the fact that:

  • These offline wallets are immune to computer viruses that steal from software wallets.
  • Your private keys are stored in a protected area called the microcontroller and they are prevented from being extracted from the device as plain text.
  • Mainly, they can be used securely as opposed to paper wallets, or local wallets.

Secondly, you need to make an account on an exchange such as Coinbase. These exchanges allow you to deposit fiat currency and swap it for cryptocurrencies, however, you can only swap your normal currency for the likes of Bitcoin, Ethereum, Litecoin and Bitcoin Cash. Once you have made your account and gone through the verification process, you can move on to creating an account at an official cryptocurrency marketplace like Binance.

Binance has a huge list of cryptocurrencies that are available to purchase. The process of purchasing the cryptocurrencies are very simple, all you do is search for the respective currency you want and it will show you a live chart, as well as giving you the option to purchase various quantities.

However, it is extremely recommended that you carry out a sufficient level of research in order to find the best exchange and marketplace, as many of these platforms charge a fee for the conversion.