Before Your First Purchase of Cryptocurrencies
The first contact with the world of cryptocurrencies can cause some feelings of discomfort and confusion because the technology of digital currencies is still quite new. The experience of buying cryptocurrencies is also not exactly user-friendly.
Before buying, it is appropriate to get familiar with some of the basics, so you may want to read about:
- What is Bitcoin?
- What are cryptocurrencies?
- What is a bitcoin wallet – a crypto wallet?
- How do crypto exchanges work? (Coming soon)
Tip: It is also advisable to realistically align your expectations and explore your options. Seriously think about how many funds you can safely invest without much damage in the case of a market drop. It is generally recommended that you don’t invest more resources than you are willing to lose.
How to Buy Bitcoin and Cryptocurrencies Online
The first question you might have is where do you even buy bitcoin and other cryptocurrencies? There are many different online platforms and exchanges. The vast majority of these platforms work in a fairly similar fashion, and we will take you through the most common of processes that you will encounter by using an online exchange.
Step 1: Select your exchange and sign-up
Some examples of reliable exchanges:
Learn more about online platforms in “Comparison of online exchange offices and stock exchanges” (coming soon).
Step 2: Open your user account
Once you’ve reviewed potential crypto trading platforms and selected the one best fitting to your needs, you will have to create an account. You will need a valid email address and maybe a mobile phone for additional security.
Tip: When opening a user account, please note that the demand for cryptocurrencies is in exceptional increase and it is a common occurrence that online platforms won’t be able to accept new users. The waiting period for new accounts can last from a couple of days to a couple of weeks. If you want to get into the game quickly, then you will need to try out different platforms and see which one is currently accepting new users.
Step 3: Verification
To prevent money laundering and to ensure a higher level of security, you will need to verify your personal information on most exchanges. You will do this by scanning or photographing your personal document (ID card, driver’s license, or passport) and uploading it to your user account. In some cases, you will also need to add a photo of your face. Each platform should guide you through the necessary verification procedure.
Some platforms require verification only in case of higher deposits and/or withdrawals.
Step 4: Select your payment method
To buy bitcoin or other cryptocurrencies, you will need to fund your account with fiat currency (crypto-to-crypto exchanges are a different story). In our case, that is in euro. On these exchange platforms, you can select among different deposit methods, most of which are quite standard:
- SEPA transfers. They are subject to low commissions and can take up to three days (depending on where the exchange’s bank account is being held) and the date of the deposit (transfers are made only during the workweek).
- Credit or debit card. Suitable for quick purchases, but charges for credit card purchases can be quite high.
- Paypal account. An unpopular payment method between the platforms and is therefore rarely offered.
Tip: Your chosen payment method should be an important factor when choosing an exchange. No exchange offers every single payment possibility out there.
Step 5: Buy bitcoin
Once you have found your desired platform, opened a user account, authenticated your identity, and deposited some money, you can finally turn your focus to the “how to buy bitcoin” part.
Usually, you will have to navigate to the “buy” section of the exchange and enter the amount of fiat currency to buy bitcoin with. The platform will automatically calculate the exact amount of BTC that you will receive when the order is executed. You may also enter how many bitcoins you want to buy and the platform will calculate the required fiat value at the current rate at the selected time.
After confirming the purchase and receiving your bitcoin, you can transfer them over to your private wallet (read more about crypto wallets here).
Before buying cryptocurrencies, keep in mind that most stock exchanges and exchange offices have restrictions on the purchased amounts. Restrictions exist both in terms of the lowest and the highest possible amount.
For example, on most platforms, it is impossible to spend over 50,000 EUR. This number can be gradually increased with the continuous use of the platform, trading, and additional identification. Major purchases are possible on major stock exchanges, but those are usually less user-friendly.
Step 6: Bitcoin wallet – crypto wallet
After your purchase, it is advisable to transfer your cryptocurrencies to a crypto wallet. A Bitcoin wallet or a crypto wallet will save your private key on it. With this private key, only you can access your coins and only you can control them.
Some platforms will claim to have a secure storage for your account, while others will not. Learn more about bitcoin wallets & crypto wallets here.
How to Buy Bitcoin on ATMs
Bitcoin and other cryptocurrencies can also be bought with cash in a more traditional way. You can do this from various vendors at numerous locations. Read more about this in the article: Purchase cryptocurrency on an ATM (coming soon).
This type of purchase mainly takes place without special authentication and allows the purchase of bitcoins for pre-defined and limited values (20, 50, 100, 200 EUR). At the time of purchase, you will receive a certificate of purchase or a coupon.
The text above is of informative nature and does not apply as a recommendation for an investment. It does not express the personal opinion of the author or service. Any investment or trading is risky, past returns are not a guarantee for future returns – risk only those assets that you can afford to lose.
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If you are interested in purchasing bitcoin, you can use Kriptomat. A regulated and licensed platform which is fast, safe and easy to use.