What Warren Buffett Can’t Tell You About Buying the First Cryptocurrency Coins
Buying your first cryptocurrency is straightforward, when you look back on it. However, buying digital currency can seem daunting before you actually do it. Let’s break down the process, and if you follow these steps, you’ll have your first bitcoin or altcoin (or token) in no time at all. Whether you buy bitcoin, Ripple and Ethereum, or any other altcoin, the process is pretty much the same for any asset purchased through a cryptocurrency exchange.
There are two ways to buy bitcoin. You can buy it directly from someone else, or you can go to a cryptocurrency exchange. Unless you already have a friend to buy cryptocurrency from, buying from a cryptocurrency exchange is a good way to get started. One note, though: under no circumstances should you agree with a stranger to transfer money into someone’s bank account, then meet them somewhere to transfer the coins. It’s a recipe for fraud, theft, or worse.
There are many exchanges such as Binance around the world, but Coinbase is widely regarded as a good place to start. Registering on Coinbase is simple, overall. You will have to verify your identity. This is part of what’s called KYC, or Know Your Customer. KYC is important for deterring illegal activity, and laws about it are tightening around the world. In the US, you’ll need a state ID card or driver’s license, or your passport. It will take a few minutes to process the account. After that, if you want, you can input payment options such as bank account or credit/debit card numbers. When that’s done you’re ready a far as Coinbase is concerned. At this point, you could buy your first cryptocurrency, but before you do, it makes sense to find a place, or wallet, in which to put your digital currency. There are several kinds of wallets, including mobile, desktop, hardware, and paper wallets. The most popular of these are hardware, mobile, and desktop wallets. Hardware wallets are similar to USB sticks that, once disconnected from the computer, make it practically impossible to steal the digital asset data inside. Offline wallets are easier to use and are safe as well, though they cannot offer the air gap of a disconnected hardware wallet. Regardless of the type, the wallet stores your personal, private key. This is a 256-bit string that is used to access the contents of the wallet. The key to owning a wallet of any type is, actually, the private key. For security reasons, don’t have your computer save your personal key anywhere that is not secured, and definitely, never give it to anyone else! Make sure that you write down the key and keep it safe, or your digital asset will be inaccessible if something happens to the key and you have to enter it manually. Once you have a cryptocurrency exchange account and wallet, you’re ready to buy. Select the coin, enter the payment information, and the wallet information, and press the button. Congrats on your first purchase!
Now you have an option - trading on the platform (yes, you just bought it, but on some days it might jump in a 15-minute stretch) or storing it in the wallet. It’s yours - you choose!