How Do I Buy Cryptocurrency?
There are two main reasons to purchase your own cryptocurrency such as bitcoin or ether. You can purchase cryptocurrency because you like what you know about how this decentralized system of financial transactions works and you want to start buying products and services with cryptocurrency. The second reason to buy cryptocurrency coins is because you believe that the value of the currencies will go up over time and you’d like to make an investment, much like you would if you were buying gold or silver. Regardless of why you want to own cryptocurrency, the method of purchasing is the same.
Buying cryptocurrency is a relatively straightforward process. You will need to find an exchange and set up an account. Cryptocurrency exchanges allow you to exchange fiat money (government-backed currencies) for cryptocurrency. They also allow you to exchange one cryptocurrency for another cryptocurrency. You can find a list of the major exchanges here: https://cryptocoincharts.info/markets/info
There are a wide variety of exchanges. Some, such as Bittrex are geared to highly technical trading, while others, such as Coinbase, are more suited to those just getting started. As an exchange, Coinbase has the following advantages:
- You can send and receive cryptocurrencies, trade for fiat, and instantly purchase Bitcoin, Ethereum, and Litecoin from linked bank accounts and credit cards.
- Coinbase is based in San Francisco and active in 32 countries.
- It is the world’s largest bitcoin broker.
- The interface is simple and easy-to-use.
- Your deposits are insured.
- You can utilize Coinbase as a software wallet to store, buy and sell bitcoins. We’ll get more into wallets and how best to store your coins in an upcoming lesson.
One downside is that you can only buy the following cryptocurrencies with Coinbase:
- Bitcoin (BTC)
- Litecoin (LTC)
- Ethereum (ETH)
- Ethereum Classic (ETC)
- Bitcoin Cash (BCH)
Coinbase has relatively modest fees, but it is not free. It’s free to deposit currency into your coinbase account, but they charge a small percentage to complete purchases. You can probably follow all of the prompts and set up an account on your own, but if you’d like some guidance, you can watch the video of follow the screen shots below.
Getting Started With Coinbase
Please note that Coinbase has been overwhelmed recently with very heavy traffic and when we put together the screenshots, there were several times where the system froze and we had to return to the setup later.
This video discusses how to set up your Coinbase account and start purchasing cryptocurrency. The screenshots below also provide a step-by-step overview for setting up your Coinbase account.
2. But wait! Isn’t cryptocurrency supposed to be all about privacy? Why do I have to give Coinbase all of my information? While the actual transactions that you make with cryptocurrency are more private than those made through a bank, signing up with Coinbase requires multiple steps where you will be required to validate your identity.
3. Be sure to check your junk mail if you don’t see the verification email from Coinbase.
4. Verify your identity.
5. After you complete Step 4, you should see this ‘Success’ screen.
6. We ran into this error message when we clicked continue. This is likely due to the exceptionally high traffic on Coinbase right now. We took a break and a few hours later Coinbase sent an email allowing us to pick up where we left off.
7. The least expensive and most flexible way to connect to Coinbase is through your bank account. The fees charged per transaction are much lower, and in some countries this will be your only option. For a list of fees charged by country, please click here. Here are the fees for US-based transactions:
Bank Account: 1.49%
Credit Card/Debit Card: 3.99%
Once you choose an account and provide your account information, Coinbase will make a series of charges under $1 that will automatically disappear. You’ll have to look at your account and verify the amounts posted in order to complete this step.
8. The next steps involved additional ID verification. You’ll be asked for the front and back of your driver’s license and also a selfie.
10. Your dashboard will look like this.