Using crypto: Buying

Buying

WHAT SHOULD I CONSIDER FIRST BEFORE BUYING?

Buying cryptocurrency is a reasonably straight-forward process, though research and preparation are required before purchasing in order to find the best fit.

Like fiat currency, there is a wide variety of many different cryptocurrencies available to purchase.
Unlike fiat currency though, each cryptocurrency is programmed and designed for serving its own purpose.

Before picking a cryptocurrency to purchase, buyers need to have a wallet and an understanding of the varieties available.
Some wallets are better suited to some cryptocurrencies over others and the ultimate use of the funds should be considered when deciding on a wallet type.

An important factor to consider is the locations from which cryptocurrency is purchased and stored, as countries have differing cryptocurrency regulations.
This is particularly the case regarding tax and ownership laws.
Payment methods also vary depending on where and how purchases are made.
Most online sources for cryptocurrency offer regular payment options such as credit, transfer or cash.
However, it is important to check these details and shop around for the ideal payment options, as not all sites offer uniform payment methods and quite often attach extra fees.

While cryptocurrency is still in its infancy as a tradable commodity, it’s still a form of currency.
It is always recommended speaking to financial advisors or cryptocurrency experts before investing.

WHAT IS A DIGITAL EXCHANGE?

There are a handful of common choices when it comes to deciding where to buy cryptocurrency - a digital exchange, a cryptocurrency broker or ATM and P2P options.

Purchasing on a digital exchange is the most popular method, attracting cryptocurrency buyers with convenience and simple set up options.
These locations function like a stock exchange and usually accept regular credit card and bank transfer payment options.
Attached to these exchanges are varying levels of security, although most follow the same verification steps before purchases can be made.

The buyer’s details must be provided for identification purposes, such as full name, phone number and email address, as well as official identification like passports or drivers licences.
These details are specifically for verification purposes providing security for buyers’ accounts.
They are not attached in any way to the wallets being used to store the cryptocurrency purchase details at the exchanges.

There are several factors involved with choosing an exchange to begin purchasing cryptocurrency.
Different types of cryptocurrencies can be bought and traded at exchanges, much like stock trading platforms.
But while certain currencies can be bought and traded for others, it is important for buyers to check if their specific cryptocurrency is available for purchase at particular exchanges.

Other factors to consider when deciding between different exchanges are the different levels of security, transaction fees and account activation waiting times.

digital exchangedigital exchangeA platform allowing users to trade cryptocurrencies for other assets, such as conventional fiat money or other digital currencies.

WHERE ELSE CAN I BUY CRYPTOCURRENCY?

Cryptocurrency brokers offer an alternative option to exchanges in that they offer a more tailored experience for specific clients looking to make larger transactions.
Transactions are conducted on a dealer network known as an OTC market OTC marketOver-The-Counter Market, a form of cryptocurrency trading done usually between just two parties and away from exchanges. (over the counter) rather than a cryptocurrency exchange, meaning individual buyers and sellers are connected rather than relying on a large pool.

There are many benefits to trading cryptocurrency through brokerage compared to exchanges, including added levels of security, faster sales settlements and more consistent methods of purchase.
However, the level of service offered and guarantees coming with using broker services also means paying higher fees than a regular exchange.

ATM machines for purchasing cryptocurrency are a relatively new option and provide perhaps the best option for fast access to cryptocurrency.
These ATMs are still rare to find with only around 3500 located around the globe only generally offering a limited few cryptocurrencies.
However, the ease in which a cryptocurrency ATM can be used is generating growing appeal among new cryptocurrency enthusiasts.
Buyers simply deposit cash into the ATM and create a wallet and corresponding private key offering access to the funds purchased.
There are some irregularities coming with these machines including varying levels of identification verification and large discrepancies in transaction fees.

WHAT’S A PEER-TO-PEER PURCHASE?

Perhaps the simplest way to buy cryptocurrency is P2P (peer-to-peer), where buyers and sellers can exchange directly.
Buyers and sellers can connect through P2P exchanges, where they can find listings outlining the type cryptocurrency they want, the quantity and the sale parameters.
This is especially useful for those wanting to avoid third-party transaction fees or disclosing their identities.

P2P’s point-of-difference is its lack of reliance on third-party verification to have transactions confirmed and completed.
The issues of security and verification are addressed with the use of an escrow, or a neutral and secure location.
Funds negotiated in a transaction are sent from the seller to the escrow, where they remain until it determines whether the buyer complies or fails to meet the terms and conditions of the deal.
If the buyer meets the demands, the funds are released to the buyer, if they fail, they are returned to the seller.

There are many factors needing to be considered when determining the method of buying cryptocurrency for the first time.
A new holder buys their first cryptocurrency is dependent on their personal preferences regarding public versus private sales, an independent or guided shopping experience and likely long-term or short-term use.

EscrowEscrowA middle man of sorts, designed specifically to be a neutral holder of cryptocurrency funds during a transaction.

FAQ

What should I do before buying cryptocurrency?
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Buying cryptocurrency is a reasonably straight-forward process, though research and preparation are required before purchasing to find the best fit. Like fiat currency, there is a wide variety of many different cryptocurrencies available to purchase. Unlike fiat currency though, each cryptocurrency is programmed and designed for serving its own purpose.

Where can I buy cryptocurrency?
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There are a handful of common choices when it comes to deciding where to buy cryptocurrency - a digital exchange, a cryptocurrency broker or ATM and P2P options.

How do I buy cryptocurrency?
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There are many factors needing to be considered when determining the method of buying cryptocurrency for the first time.How a new holder buys their first cryptocurrency is dependent on their personal preferences regarding public versus private sales, an independent or guided shopping experience and likely long-term or short-term use.

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