Millions of people are suddenly interested in digital currencies, thanks to their recent surge in popularity. So, what is cryptocurrency? In a nutshell, it’s a digital or virtual currency that uses cryptography for security. Bitcoin, Litecoin, Ethereum, and ripple are all examples of popular cryptocurrencies.
If you’re new to crypto, learning how to buy bitcoin New Zealand and other cryptocurrencies like Dogecoin and Ethereum can be daunting. Indeed, they are quite an enigma to decode.
Fortunately, learning the ropes is relatively simple. Follow these five steps to begin investing in cryptocurrency.
Your Building Blocks to Bitcoin
Take note of the main aspects when establishing your ABCs to bitcoin. You need to get familiar with and know how to interpret brokers and crypto coins. Also, be fluent in creating online accounts and comparing cold and warm wallets. All these ahead!
Select a Broker or a Crypto Exchange
Crypto exchange and a broker are different platforms. A cryptocurrency exchange is a marketplace where buyers and sellers can exchange cryptocurrencies. On the other hand, cryptocurrency brokers simplify the process of purchasing cryptocurrency.
Exchanges frequently have low fees, but they also have more complicated interfaces with multiple trade types. And advanced performance charts, which can be intimidating to new crypto investors.
The convenience comes at a cost, as the beginner-friendly options are significantly more expensive. Than purchasing the same cryptocurrency through each platform’s standard trading interface.
To save money, you could aim to learn enough to use traditional trading platforms before—or shortly after—purchasing your first cryptocurrency.
If you’re new to here, make sure your exchange or brokerage supports fiat currency transfers and purchases in US dollars. Although, some exchanges may only allow you to buy cryptocurrency with another cryptocurrency.
When this happens, you’d have to find another exchange to purchase the tokens your preferred exchange accepts before you could start trading cryptocurrency on that platform.
Some brokers charge more than exchanges. Others claim to be “free” while profiting by selling information about what you and other traders are buying and selling to large brokerages or funds or failing to execute your trade at the best possible market price.
While brokers are undeniably convenient, you should exercise caution when using them because you may face restrictions when moving your cryptocurrency holdings off the platform.
You cannot transfer your crypto holdings out of your account; sometimes, this may not appear to be a big deal.
However, advanced cryptocurrency investors prefer to keep their coins in crypto wallets for added security. For added security, some people opt for hardware crypto wallets that are not connected to the internet.
Make and Verify an Account
You can open an account with a cryptocurrency broker or exchange once you’ve decided on one.
Depending on the platform and the amount you intend to purchase, you may be required to verify your identity. This is a necessary step in preventing fraud and complying with federal regulatory requirements.
You may be unable to buy or sell cryptocurrency until the verification process is completed.
In addition, the platform may request a copy of your driver’s license or passport and a selfie to prove your appearance matches the documents you submit.
Make a cash deposit to invest
To buy this cruncy, you must first ensure that you have funds in your account.
You can fund your crypto account by linking your bank account, authorizing a wire transfer, or even paying with a debit or credit card.
Depending on the exchange or broker and your funding method, you may have to wait a few days before you can use the money you deposit to buy cryptocurrency.
Make Your Cryptocurrency Purchase
You’re ready to place your first cryptocurrency order once you have money in your account.
There are hundreds of cryptocurrencies to choose from, and once you’ve decided which cryptocurrency to buy, enter its ticker symbol—Bitcoin, for example, is BTC—and the number of coins you want to buy.
Most exchanges and brokers allow you to buy fractional cryptocurrency shares and own a sliver of high-priced tokens like Bitcoin or Ethereum that would otherwise cost thousands of dollars.
Choose a Storage Method
Cryptocurrency exchanges are not protected by the government and are vulnerable to theft or hacking.
You could even lose your investment if you forget or lose the codes to your account, as has happened to millions of dollars in Bitcoin.
That is why having a secure storage location for your cryptocurrencies is critical.
As previously stated, if you purchase cryptocurrency through a broker, you may have little to no control over how your cryptocurrency is stored. However, you have more options if you buy cryptocurrency through an exchange:
Keep the cryptocurrency on the exchange.
When you purchase cryptocurrency, it is typically stored in a crypto wallet linked to the exchange.
If you don’t like the provider with whom your exchange partners, or if you want to move it to a more secure location, you can move it away from the exchange and into a separate hot or cold wallet.
You may have to pay a small fee depending on the exchange and the size of your transfer.
These crypto wallets run on internet-connected devices such as tablets, computers, or phones. Hot wallets are convenient but more vulnerable to theft because they are still connected to the internet.
Cold crypto wallets are not connected to the internet and are the most secure way to store cryptocurrency.
They are external devices, such as a USB or hard drive. However, it would be best to exercise caution when using cold wallets. If you lose the keycode associated with them or the device breaks or fails, you may never be able to recover your cryptocurrency.
While this could happen with specific hot wallets, some are run by custodians who can assist you in regaining access to your account if you are locked out.
Last minute accounting
Cryptocurrency can be highly volatile. Therefore, it remains a high-risk investment. This means you should invest with caution and care.
Before investing in cryptocurrency or individual companies with a significant stake in it, as with any investment, consider your investment goals and current financial situation.