Buying bitcoin and other cryptocurrencies has never been easier. There are dozens of ways to get started, yet many issues and pitfalls you need to look out for along the way.
In this article, you’ll learn the four main things you should consider before buying bitcoin or other cryptocurrencies.
With the right preparation, you’ll be able to make a safe, secure purchase and maximize the value of your investment.
1. What personal information are you willing to share?
There are many different ways to buy cryptocurrencies, and almost every method requires that you share some personal information. Therefore, the first thing you should consider is what type of personal information are you willing to share.
The most straightforward way to buy any cryptocurrency is to join an exchange, and most exchanges have a similar sign-up process. You’ll need to enter your email address and choose a username and password for the exchange to send you a verification email.
Once you receive this email and click on the verification link, you’ll have your own account with a username and password.
The next step on the most exchanges is to register a valid phone number and upload a scan item of photo ID, such as your driving license or passport. The majority of exchanges make these requirements mandatory for security purposes. It helps them comply with Know-Your-Customer (KYC) laws and helps you protect your account.
If you aren’t comfortable sharing this personal information, you may like to consider other exchanges, like BiQuick, that don’t make small purchases of less than $400.
2. Which payment method will you use?
The second thing you need to consider before buying cryptocurrencies is how you will pay. There are many different ways to buy cryptocurrencies and each method entails a different set of fees and costs. If you plan to make a large purchase, these fees can be significant.
The most straightforward way to buy crypto from an exchange is to “link” your bank and transfer money to the exchange via a bank transfer. Overall, this is the lowest-cost method of buying cryptocurrencies as the transaction fees are lower than other methods.
Some broker exchanges let you purchase crypto with a credit or debit card, which can be more convenient. However, you can expect to pay higher fees when you use a card. The exchange will charge higher fees when you use a card.
The transaction and your card issuer may charge additional fees. For instance, many credit card providers treat cryptocurrency payments as cash advances and tack on an extra charge.
If you aren’t comfortable linking your bank account to an exchange or using a card, there are other options. Peer-to-peer crypto marketplaces, like Localbitcoins, help you meet up with sellers and complete the transaction in person if you wish.
While this option can help you avoid expensive card fees, it may involve placing yourself at greater personal risk. If you do decide to buy crypto in person, registered with an established exchange that verifies all members.
3. Where will you deposit your cryptocurrency?
The third thing to consider before you buy cryptocurrencies is where you plan to deposit the costs or tokens. You’ll need a cryptocurrency wallet. The most popular types of wallets include mobile, desktop, paper, hardware, online and mobile wallets.