How To Buy Cryptocurrency
Individual Cryptocurrency Coin Buying Guides
Interested in buying cryptocurrencies but feel like you want to know more before you make up your mind? Don’t worry because you’ve come to the right guide.
Cryptocurrencies didn’t get the name “digital gold” for nothing, and there must be a good reason why more and more investors and companies are finding new ways to include this revolutionary technology in their businesses.
This guide will tell you where and how to buy cryptocurrencies, why so many people are joining the crypto market, and what to keep in mind if you want to make the most out of crypto trading.
Where to Buy?
Crypto exchanges are specially designed trading platforms where you can buy, sell, trade, and transfer cryptocurrencies. Depending on your trading needs, you might be looking for fiat to crypto exchange, if you don’t have any digital coins to start trading, or crypto to crypto exchange, if you already have some experience and want to gain access to lesser-known tokens.
In the USA, one of the most popular and beginner-friendly crypto exchanges is Coinbase. You can easily convert your USD for the most prominent cryptocurrencies: Bitcoin, Bitcoin Cash, Ethereum, Litecoin, and Ripple. The platform has first-rate security methods, an easily navigable interface, and some of the lowest transaction fees in the industry.
Find Out More About Crypto
When the first cryptocurrency was introduced in 2009, it took some time before it gained a head of steam and the world recognized its multifaceted potential. It wasn’t until 2017, the turning year for the crypto industry, that Bitcoin’s price jumped from around $572 (identified in August 2016) to $4,764 (August 2017)!
That summer saw Bitcoin’s market capitalization skyrocketing, resulting in a wave of new trading platforms. Members of the crypto community couldn’t resist but dub the summer of 2017 – “the summer of crypto love”. Over the next two years and a half, cryptocurrencies have been introduced not only in the financial industry but in retail, health care, travel, the insurance industry, and more to come.
The History of Cryptocurrencies
For years back, people have had the impression that our traditional financial system is getting outdated and falls short of this tech-savvy age we’re living in. While banks still remain the most popular intermediaries for our money transactions, it takes days for international transfers to be completed, the service fees are outrageously high, and sometimes we feel that they know more details about us than our closest friends.
This is what prompted software engineers in the late ‘80s and early ‘90s to start working on a new technology that would completely digitalize our financial system and help us get rid of the middleman. After a couple of attempts, some more successful than others, an individual or group of individuals under the pseudonym Satoshi Nakamoto published the whitepaper “Bitcoin: A Peer-to-Peer Electronic Cash System”. The paper includes a detailed explanation of the new blockchain technology and how it can be used to verify money transactions paying with the first digital coin, Bitcoin.
Cryptocurrencies in the USA
Governments around the world see the decentralized nature of cryptocurrencies as their biggest threat and challenge. While they have nothing against digitalization and innovations, they fear that cryptocurrencies will be abused more than they’ll be used for benevolent causes. As a result, the laws regarding digital coins are quite tight in most countries.
The US government has been facing the same problem which is why there’s still no consistent approach in all of the US states. At the end of 2019, the US Congress proposed a new bill, the ‘Crypto-Currency Act of 2020’, that gives the job of creating regulatory laws to the Commodity Futures Trading Commission (CFTC), the Securities and Exchange Commission (SEC), and the Financial Crimes Enforcement Network (FinCEN).
Until recently, traders didn’t have official instructions on whether regular taxes applied to virtual currency transactions. Finally, it was decided that cryptocurrencies are also personal property and they’re now equally taxed as other property transactions. Companies and individuals are now obliged to pay taxes on every sale or purchase made through or on cryptocurrencies.
Investing in Cryptocurrencies
As we enter 2020, cryptocurrencies continue to be among the number one investments in the financial industry. It’s not a secret that many people have made a fortune thanks to crypto trading but there were cases where people lost a great deal of money too.
This is due to the unpredictability and volatility of the crypto market, a common thing for markets that are just now expanding. Any market based on speculations rather than certainties can result in great losses and failures. If you plan on using cryptos in daily transactions you can end up disappointed as their prices drop just when you need them most.
Should You Invest in Cryptocurrency?
There are many reasons why you should consider investing in cryptocurrencies. Some coins like bitcoin, for example, have a limited supply, meaning that there’s a total of 21 million bitcoins in the world. Because of that, investors choose to store bitcoins and hold on to them until the coin’s value increases even more against the major fiat currencies like the US dollar.
Others decide to use digital coins for daily transactions since bitcoins, in particular, are accepted in certain retail shops, travel agencies, flight companies, grocery shops, etc.
You can also invest in cryptocurrency because you believe in the underlying philosophy of money digitalization. Maybe you’re an opponent of the immense power enjoyed by central authorities and believe that digital coins will help us take that power away from them. Or you’re afraid traditional currencies will soon become obsolete so better start hoarding bitcoins before everyone else joins the train.
Whatever your reasons, we would advise you to read as many guides as possible in order to get fully immersed in how the crypto market works before getting involved in it yourself. Don’t underestimate the weight of your choices when trading cryptos and make sure you’re comfortable with the hazards commonly associated with it.
What Cryptocurrencies are There?
According to CoinMarketCap, there are more than 5,000 cryptocurrencies that crypto traders can invest in. Despite the great choice of digital coins today, Bitcoin stands heads and shoulders above the rest of them. Its current value is $9,790 and has a market capitalization of around $180 billion! Besides, bitcoins are becoming widely accepted as a regular payment option when shopping.
The second place based on prominence and performance goes to Ether, also known as Ethereum, the name of its blockchain. This coin has a market cap of over $24 billion and current value of $222. The best thing about this cryptocurrency is that it performs a utility function and allows for other cryptos, smart contracts, and DApps to be built on top of it using its blockchain code.
What to do When You Have Bought Your Cryptocurrency
Once you buy cryptocurrencies you will need a place to store them and keep them safe until you decide to sell / trade them. You can either store them on the digital wallet designed by the crypto exchange that you’re using or if the exchange doesn’t come with a wallet, there are many third-party platforms where you can sign up for one.
However, you should be aware of the risks of storing digital coins online. Crypto exchanges and online platforms are frequent targets for hacker attacks because people know they keep large sums of money. Always check whether the provider you’re using has cold storage where it keeps the majority of customer funds. This way it’s almost impossible for hackers to steal your money.
The safest option at the moment is to invest in a hardware wallet, a new type of bitcoin wallet that stores your private key in a secure hardware device. You can check our crypto wallet guides alongside the guide on how to buy Bitcoin, for more information.