For those who are used to regular investments, cryptos might seem like an enigma. You don’t really get shares per se, instead, you get “tokens” or “coins”. You can’t get them on the regular stock exchange or through your average broker. Some of these tokens don’t go far beyond an idea and don’t have financial statements backing them, a board of directors, or any type of governance in some cases.
Getting your hands on coins isn’t always as straightforward, and these matters can be even more complicated depending on the coin in question and where you’re located. However, once you understand the basics of buying and selling cryptocurrencies, the process becomes much easier. Here is how you can get started.
Understanding Exchanges
The easiest way to buy cryptocurrencies is through an exchange. Cryptocurrency exchanges are exactly what they sound like, a place where you can sell and trade your coins on the open market. Each exchange has its own set of rules as far as what your account limit is, what coins are supported, and what kind of verification process you’ll have to go through to be able to trade.
Note that not all exchanges will allow you to trade your dollars for cryptocurrency. Some cryptocurrency exchanges will only allow you to buy using other cryptocurrencies. This is why many people decide to invest in Bitcoin and Litecoin first and invest in other cryptos using them.
If you aren’t sure which crypto currency exchange to pick first, you can check this great guide from Crypto Head. They run down the main features of each exchange along with a detailed review.
What Should You Look for in an Exchange?
Before you pick a particular exchange, there is a specific set of features that you should look out for first. One of the most important is which coins are accepted by the exchange. Most exchanges will accept the big names like Bitcoin, Litecoin, Ether or Monero. But if you’re into more obscure coins, then you’ll have to go with an exchange that offers support for a larger variety.
Other important factors you have to look at are what level of security they offer and the number of daily transactions you’ll be allowed. Look for an exchange that has at least 2 factor authentication for added safety.
Get a Hardware or Software Crypto Wallet
Know that storing your cryptocurrencies on an exchange should only be a temporary solution and that you should invest in a good software or hardware wallet to store your cryptos safely. If you’re going to go for an online solution, make sure that they have the proper security measures in place and that they have a solid reputation. Hardware wallets are a much safer option, but they are also more expensive. However, this is a small price to pay for the added safety they offer.
Buying cryptos isn’t that complicated once you have the basics down. However, before you pick an exchange, make sure that you check their reputation and make sure that you take the proper precautions to save your coins off-exchange as soon as possible.