The Definition: Cryptocurrency
Cryptocurrency is just a medium of exchange. They are a way of transferring out a transaction digitally. The reason cryptocurrency stands out from all other forms of currencies is due to its independence. Currencies are not controlled by the government. That is why we would like to provide information on how to buy Bitcoin and other Cryptocurrencies to make sure that the opportunity is available for everyone.
Why is this decentralization so important?
To understand why decentralization is important let's consider the Dollar which is considered Fiat money. The dollar is unlimited by quantity which means that the government can decide to print as much as it wants whenever needed and inflate the money supply on the market.
Flooding the market with printing more money is that it will drop the value of each dollar. Unlike the dollar, there is only a specific amount of cryptocurrency you cannot print or exceed the amount created.
Taking control of your money is a big reason to why many decided to purchase cryptocurrencies. If you are interested as well continue reading, we will be explaining how to buy Bitcoin and other forms of Cryptocurrencies, and also provide information on investing and selling your cryptocurrency.
Principles Of Investing And Disclaimers
Before we begin I would like to note some things that are important to keep in mind.
Although owning cryptocurrencies protects you from inflation of Fiat money you can never really guarantee the value of your cryptocurrency. It is a volatile market depending on the community and the basic demand and supply market. However, it is well known that cryptocurrency has the potential of doing what the internet did to newspapers to fiat money.
Purchasing cryptocurrencies is a form of investing. Once you are a holder of cryptocurrency you will be considered a virtual asset holder. This means that we advise you to only purchase what you can afford to potentially lose.
Do not rush to invest in the markets. Always try to buy when the market is low and never when it is sky rocketing. For example events and news like COVID-19 opens up a nice window to invest because of how low the cryptocurrency prices get.
This is not financial advice. This article is meant to make it easier for you to understand how you can purchase cryptocurrencies if you chose to do so.
How To Purchase Cryptocurrency
FIAT to Cryptocurrency Exchanges
Exchanging fiat currency for cryptocurrency is usually the easiest way to buy cryptocurrency, it can even be done by your phone! Fiat currency can be any currency that is issued by a government like USD and EUR.
The first step in buying cryptocurrency using this method is to choose a Broker exchange.
Broker exchanges are similar to the currency exchange shops that you find at airports. They let you exchange your local currency for cryptocurrencies. The following are different cryptocurrency brokers that you can choose from:
Coinbase is secure and accepts bank transfers, credit/debit cards, and PayPal. Before you buy check their fees on the payment. Their fees depend on which payment method you choose. Coinbase is available in approximately 32 countries.
Gemini is another platform we trust. It has a clean, easy-to-use interface that beginners can quickly get the hang of. However, it is based only in the US.
Pros of Buying Cryptocurrency from a Broker:
- It's Quick And Easy
- Trusted And Secure Method
Cons of Buying Cryptocurrency from a Broker:
- High Transaction Fees (3% - 10%)
- You Need To Verify Your Identity With KYC
- Not Available In All Countries
Buying from Peer to Peer markets
Peer-to-peer exchanges are a great alternative to the broker exchange method of buying cryptocurrency. Most people chose peer-to-peer exchange since they either don’t have a broker exchange available in their country or want to avoid the fees that companies like Coinbase charge when buying cryptocurrency.
Peer-to-peer exchanges allow users to buy and sell cryptocurrency from each other directly. In order to start buying cryptocurrency on a peer-to-peer exchange we suggest following the following steps:
Step 1: Research and find trustable Peer-to-peer exchanges like LocalCryptos.com or LocalBitcoins.com
Step 2: Find a listing that you want to buy from or sell to. There are sellers that set a price for how much they want to sell their cryptocurrency. Think of it like eBay.
Step 3: If your request is accepted, the amount of whichever cryptocurrency you ordered will be sent to the website’s escrow (escrow- a secure place that stores the amount of crypto until the terms and conditions are met ). This protects both the seller and the buyer.
Step 4: After the amount is placed in escrow follow the steps that they give you to insure that the terms and conditions will be met and the amount of cryptocurrency you plan on purchasing will be released.
Step 5: When the seller gets a confirmation that the money you sent is coming their way, they will confirm the exchange and you will receive your cryptocurrency.
Pros of Buying and Selling Cryptocurrency From a Peer-to-Peer Exchange:
- Flexibility- When buying from a peer-to-peer exchange you have the possibility of being able to buy cryptocurrency in cash
- Depending on the seller, some will allow you to buy cryptocurrency without using your ID
Cons of Buying and Selling Cryptocurrency From a Peer-to-Peer Exchange:
- Takes time to find a seller
- There is a chance of falling to fraud and untrusted sellers so chose wisely
When Should You Sell Your Cryptocurrency?
The number one thing we suggest when purchasing Cryptocurrency is to have patience. This is just like another investment. It takes time to show returns based on the market. Don’t approach it with the mentality of investing today and making a million tomorrow.