Never Too Late: Where To Buy Your First Cryptocurrency

Never Too Late: Where To Buy Your First Cryptocurrency

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This article will help you understand why, where and how to buy your first cryptocurrency. It is written for a new cryptocurrency buyer and for someone who understands only the basics of investing.

In this article, we will discuss reasons to buy Bitcoin or any other cryptocurrency and explain the concept of a cryptocurrency exchange. Finally, this article will provide some advice on how to choose a good exchange to buy from.

Your Reasons For Buying Cryptocurrency

Initially, it is important to know what your reasons for buying cryptocurrency are. Three possibilities that people may be buying cryptocurrency for are: short-term speculative trading, alternative currency use for transactions, and long-term investment.

Reason 1: Short-term outlook

Short-term speculative trading means buying with the intention to sell again relatively soon. You, as the buyer, will be watching the market – more specifically, the exchange rate as compared with a national currency of your choice – and making informed guesses about when exactly to buy, how much to buy, and when to sell. At the time of sale, you will have to make a decision about how much of your stock to sell off.

For example, if you think today is the highest value it will be in some time, you may want to sell off 50% or even more of your stock. The amount you choose to sell should depend on your confidence about your predictions of the market. Remember that speculation is akin to gambling, which means that it is very risky. Many cryptocurrencies are highly volatile, so their value can change very, very quickly indeed. If you go for speculation, you may prefer a highly volatile currency such as Bitcoin Cash or even TRON, the most volatile of the top 50 cryptocurrencies.

Reason 2: Payment method

Another real-world scenario for cryptocurrency is to use it in a similar way to how you might use cash or a debit card. This means that you use your cryptocurrency for online purchases, or if you are owning a mobile software wallet, you can even opt for it when you visit stores in person. If you want to use cryptocurrency for frequent, small transactions, it is recommended that you choose a cryptocurrency with lower volatility, short transaction times, and low transaction fees, such as DASH or Ripple.

Reason 3: Long-term outlook

The final use of cryptocurrency that will be discussed in this article is long-term investment. This use of cryptocurrency is akin to a mutual fund, which is where you invest in order to withdraw your funds at a much later date, possibly for a beneficial purpose such as a college fund, an international trip, or a new house. You can make either one lump-sum investment or many smaller investments. It is likely that over time, as more and more people invest in cryptocurrency, the volatility will eventually decrease. It may surprise you to know that the least volatile cryptocurrency is Bitcoin, unless you include cryptocurrencies that are directly backed by fiat currencies, such as AlloyCoin and Tether.

What Is A Cryptocurrency Exchange?

A cryptocurrency exchange is best understood as an online platform where you can exchange one cryptocurrency for another, or one cryptocurrency for an accepted fiat currency (national government-issued money, such as US dollars). In this way, it functions similarly to a kiosk at the airport where you can exchange US dollars to British Pounds, or vice versa.

Most exchanges will buy and sell at the market rate, with a fee or premium generally calculated as a percentage of the amount exchanged. For example, CEX.IO charges up to 0.25% fee for trading activities. The other fees on the exchange include 25 US cents plus 3.5% to deposit with VISA card, and a standard $3.80 withdrawal fee. Meanwhile, with MasterCard, the deposit fee is the same, but the withdrawal fee is $3.80 plus 1.2% of the withdrawn amount. Other examples of well-known exchanges include Coinbase, GDAX, Kraken, and Poloniex. But do remember to check whether your chosen exchange offers the coin you are looking for before buying any cryptocurrency.

It is advised that you always transfer any coins you buy from an exchange to a wallet private key of which you personally control. A private key functions as an access code to your cryptocurrency, and knowledge of this private key allows a person to withdraw from that wallet – so protect the key code carefully!

How to Choose a Good Exchange – Principles to Look for

When choosing an exchange, there are some factors to consider. Those include the reputation, fees, payment methods, verification, allowed countries, and exchange rates. It is important to choose an exchange with a good reputation (as shown by reviews), transparent and clear fees you are ready to pay, with a payment method that you have access to, and an exchange that is available in the territory in which you reside. Verification means that the exchange only allows users that show their ID to make new accounts, withdrawals and deposits. While this can be an administrative load, it does help to protect against fraud and theft. Finally, some exchanges offer better fees than others.

CEX.IO has been around since 2013 and has over one million customers. While many exchanges have been robbed in high-profile thefts, sometimes with hundreds of millions of dollars’ worth of cryptocurrency stolen, CEX.IO can boast of a 0% theft rate. It supports 99% of the world’s countries, has 4 payment methods, and is registered as a Money Services Business at FinCEN and a legal entity with the UK government. Currently, you can buy and sell Bitcoin, Ethereum, ZCash, Dash, Bitcoin Cash, Stellar Lumens, Ripple, and Bitcoin Gold on CEX.IO.

Remember, the best place to buy your first cryptocurrency is from a reputable and well-secured exchange that has good security protocols and sound trading policies. So, be sure to begin your investment journey armed with sound knowledge about cryptocurrency and how it works.