So, you should now be familiar with the basics of how cryptocurrency exchanges work.
The next logical step is to actually buy some cryptocurrency.
I'm going to run you through the basic process of buying cryptocurrency. However, before I do, I need to say that this is not financial advice.
We don't recommend any specific cryptocurrency or recommend you hold any. Crypto is extremely volatile and you need to know what you're buying and the implications of the purchase before doing so.
We are not recommending you buy crypto, we're simply providing a step-by-step of the process needed to purchase crypto.
You should do your own research on the actual currency you buy and make sure you're comfortable and happy with the investment.
With that being said, let's get into the details.
Choosing your cryptocurrency is the first key step. Don't buy something simply because it comes up on a site's home page or your mate Dave from down the pub has recommended it.
Do your research and know what you're buying into.
Make sure that you're comfortable spending (and potentially losing) the money.
We recommend using some detailed tracking and research tools for crypto to get the best results. Use these to find potentials you're comfortable with.
Investing in cryptocurrency is risky, and it’s important to understand the risks before laying out your cash.
Cryptocurrency prices are much more volatile than other assets like stocks, so investors should be prepared for significant price swings.
Additionally, regulatory changes could have a major impact on the future value of cryptocurrencies, with the worst-case scenario being that they become illegal and worthless.
Despite these risks, many investors are still attracted to the potential upside of investing in crypto.
If you decide to invest, it’s essential to do your research and carefully evaluate any digital coin before buying it.
Pay attention to transaction fees when making crypto purchases as well since these fees can vary widely among currencies. With proper research and due diligence, investing in cryptocurrency can be a rewarding experience if done correctly.
Once you've done your research and have narrowed down what you want to buy, you need to know where to buy it.
The first consideration should be whether to use a centralized or decentralized exchange.
As you're reading this piece, I'm going to assume you're new to the world of crypto and so I would recommend using a centralized exchange.
If you're in the US, Coinbase is a popular exchange many use.
For those outside the US, Binance is often one of the popular choices.
If you don't want to use a centralized exchange or the CEX doesn't have what you want to invest in, you could use something lie Uniswap.
As mentioned in the prior piece on CEX vs DEX, there are be nefits and risks to b both types of exchanges.
To buy cryptocurrency through a centralised exchange, you’ll need to first choose which exchange you want to use.
We have a list of the best exchanges here for you to look through real user rankings.
We'll run through the basic steps and then create some detailed guides to two specific exchanges.
The basic step to buying crypto through a centralised exchanges are...
Well done, you've just bought some cryptocurrency.
With that being said, let's look at 3 specific examples and how to buy cryptocurrency on them/.
We're going to look at Binance and Coinbase for centralised exchanges.
Binance has a US operation, but Coinbase seems to be the preferred exchange in the US.
For outside of the US, Binance is by far the most popular.
Oh, and I'm going to assume you've already done your research and know what you want to buy and are happy with the risks.
Also, going to assume you've set up accounts, completed KYC, and have a payment service linked to the site.
Head to Binance and click on "Buy Crypto" int he top navigation bar.
You'll see the above options pop up.
Choose the payment option you've approved with Binance. I use Credit/Debit card.
Enter the currency you're paying in and the crypto you want to receive. Then add the amount of what you want to pay/receive.
Click continue.
You'll then be given an overview of what you've requested.
If all looks good, click continue.
The final stage will one again ask if this is what you want and add in the various fees associated with the trade.
Double check everything and, if you're happy, click continue.
Complete the transaction to have bought your crypto.
Head to the Coinbase site and log in.
Look for "Buy & Sell" in the top nav bar and click it to bring up the below modal popup.
Enter the amount of fiat you want to spend or the amount of crypto you want to receive.
Also make sure the currencies are correct.
Once you've put in the details the button will change to a "preview buy" button.
Click it when you're ready and you'll be given the full run down of costs including fees.
If you're happy, go ahead and action the trade to buy crypto from Coinbase.
Uniswap is a little different as it's a decentralized exchange. Which means you're not exchanging fiat for crypto, but are exchanging crypto for crypto.
It will also require you to have a crypto wallet.
For ease's sake we won't go into setting one up here. But we would recommend using MetaMask extension for your basic, day-to-day hot wallet (also look at getting a good cold wallet for storage).
Step 1. Sync your wallet with Uniswap
Look for the "Sync wallet" button in the top nav bar and click it to see the below.
Click the wallet you use and approve the syncing to Uniswap.
Once it's synced, you'll see the below page.
Step 2. Add funds to your wallet
This is a sort of optional step.
if you have the funds already in your wallet to trade, move on.
If not, here's how to add funds to your MetaMask.
Click the "buy" button in Metamask.
You'll be presented with a few options.
Choose the one that's easiest for you and buy the amount you need in your wallet.
Once the funds are in your wallet, you'll want to action the exchange.
Step 3. Choose the currencies you want to exchange
From here, choose the currency you want to exchange.
For example, I have some left over FTM in my wallet and I might want to exchange it for ETH.
So I pop the details int he wallet and am given a basic overview of the costs.
Click on the "Swap" button that shows up.
This will open up your MetaMask for your to "sign" and approve the trade.
Once done, you'll have exchanged your crypto on a decentralized exchange!
You now know the basic process for buying crypto on a centralized exchange or swapping it on a decentralized exchange. Before I sign off, let's cover a few basic Qs people ask about buying crypto.
There are plenty of options available to buy crypto. It really depends on the platform you go with as some have specific rules.
Generally speaking you can usually use...
Sometimes (but not always) you can also use a deb it card.
And of course, if you're just looking to trade you only need funds of some currency in your exchange or self-custodial wallet.
There are several costs and fees to keep in mind.
As mentioned above, most exchanges allow debit and bank transfers, but some also allow you to fund a purchase with your credit card.
Exchanges' fees vary depending on what you're buying and how you're buying it, so it's important to review these details carefully before making any purchases.
Fees may include...
Generally speaking, the fees will be low percentages of the trade - for example 1 - 2% of the traded amount.
Again, this differs by exchange.
However, they generally have maximum and minimum amounts.
For example, Coinbase has a minimum charge of $1.99 to buy crypto.
And for most users who aren't big traders, they allow deposits of up to $1000 / day.
You'll need to check with your exchange the limits they implement.
No.
If you have a large amount of crypto, be safe and get yourself a cold wallet (I use a Ledger Nano X) to keep your assets safe.
The last thing you need is to lose your assets because the exchange experiences a problem.
Not your keys and all that.
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