Learning how to buy cryptocurrency can seem like a complicated and confusing process. It doesn’t have to be though, as it is much easier when you are presented with several options. Buying cryptocurrency is getting easier by the day and the process has been made a lot simpler over the last few months.
There are certain things every aspiring cryptocurrency trader and investor needs to effectively buy cryptocurrency.
- A cryptocurrency exchange account
- Personal identification documents
- A secure connection to the Internet
- A valid means of payment
- Personal crypto wallet outside of the exchange account
Now that we have that out of the way, we are going to consider four options by which you can seamlessly buy cryptocurrency.
A Cryptocurrency Exchange
Exchange platforms are the easiest medium by which you can buy cryptocurrency. Exchanges such as Binance, KuCoin, Coinbase, BuyCoins, Crypto.com are examples of cryptocurrency exchanges that have built a level of credibility in service provided over the years. You must be very careful when deciding on the cryptocurrency exchange you want to use.
The following factors are necessary to be put into consideration when deciding on an exchange to transact on.
- How secure is the crypto exchange?
- How low are the exchange’s transaction fees?
- How many payment options are offered?
- How long does it take to verify and activate an account?
- How many cryptocurrencies do they have listed?
- Do they list the cryptocurrency I want to buy?
It’s also a good practice to check for user reviews related to the exchange from various online forums related to cryptocurrency. This will give you a good idea of how friendly the exchange website is to use.
PayPal Payment Processor
There are two ways to buy cryptocurrencies using PayPal. The easiest and most convenient way is to directly buy cryptocurrencies using your PayPal account. The other option is to use the balance of your PayPal account to purchase cryptocurrencies from a third-party platform. The second option is not as easy and convenient as the first one because only a few third-party platforms allow users to buy cryptocurrencies with PayPal as the payment option.
One disadvantage to buying cryptocurrencies directly through PayPal is that you cannot transfer the cryptocurrency out to an external crypto wallet. This is one drawback you must consider when making your decision.
Cryptocurrency Bitcoin with Credit Card
Buying cryptocurrency through credit cards is similar to how you buy cryptocurrencies through debit cards. You will need to enter your credit card details into the secure payment gateway with the exchange platform or online trading firm and authorize the transaction after providing your card pin or an OTP.
Although not all cryptocurrency exchanges conduct crypto transactions using credit cards due to associated processing fees and the risk of fraud, this is usually in the best interests of customers. This is because credit card processing attracts extra charges onto such transactions, which can be very expensive.
Peer-to-Peer Exchange Platforms
Peer to peer exchange is a decentralized trading platform that matches up buyers and sellers anonymously and facilitates all aspects of the transaction. Peer-to-peer exchanges remove the middleman and allow users to buy and sell cryptocurrency from each other directly.
After registering on this platform, you can post requests to buy or sell any cryptocurrency of your choice, including the amount you would love to trade and the payment method you have offered to carry out the transaction.
Typically, users browse through listings of buy and sell offers, choosing those trade partners with whom they wish to transact with. While P2P exchanges do not offer the same anonymity as decentralized exchanges, they allow users the opportunity to shop around for the best deal. Many of these exchanges also provide rating systems so that users have a way to evaluate potential trade partners before transacting.
A word of warning: Only ever invest money you can afford to lose. Crypto investing (like all investing) comes with risk.