So, you have been reading a lot about crypto and figured out that it is time for you to buy some. But there are numerous doubts that arise here, and this is actually the point where many people give up on the idea.
Let’s be honest – buying cryptos is a risk. The only way to lower the risk is by knowing more and educating yourself, but it is by no means a way to completely remove that risk. Therefore, let’s begin the education process by answering several questions that bother every crypto newbie out there.
Which Crypto Should I Pick?
The first thing to do is to pick the right crypto for you. The general rule here is to go for one of the major coins. Newbies usually buy Bitcoin, Ethereum, Litecoin, Zcash, XRP, etc. Popular cryptos are more widely-used, which means that if you plan to buy something online using crypto, you are likely to do so with Bitcoin rather than, say, Stellar Lumens.
One more thing – in order to enter the crypto market, you need to buy a coin which you can trade for other cryptos. The rule here is similar – you are more likely to trade a minor coin for Bitcoin than for other minor coins.
Finally, the major coins are worth more, and more money is invested in them. Therefore, it is always a good idea to invest in one and hold until its price goes up.
What is the Right Cryptocurrency Exchange for Me?
The rule with choosing an exchange is similar to the rule of picking your first crypto – the more popular, the better. Currently, one of the most popular crypto exchanges, which is also the safest for newbies, is definitely CEX.IO. Although it will charge fees which are slightly higher than on other exchanges, it is very beginner-friendly and will allow you to buy crypto for fiat currencies with your credit card.
There is one small trick about the exchanges though; not all of them are available worldwide. In this regard, it is useful to highlight that CEX.IO is an international cryptocurrency exchange, supporting 99% of countries over the world – something that a few platforms can boast of. However, it is worth checking whether this exchange will work for you as there’s still 1% of the countries restricted by CEX.IO.
What are Cryptocurrency Wallets?
Wallets are simply online (or offline) pieces of software (or hardware) where you can store your cryptocurrency. The most common option is an online wallet, which is mostly similar to PayPal – you have cryptos and can see them via your browser or a special piece of software.
But this is often not the safest way out there. Many people opt for hardware wallets which store funds even if you are not online. These devices often come in a form of the USB and offer the maximum protection.
Are There Any Fees?
Although blockchain is a technology which overall aims to abolish fees for any kind of crypto transfers, fees still exist on all exchange platforms. It doesn’t matter whether you will trade one coin for the other, or buy crypto for fiat (or make any kind of trade), you will still have to pay a small fee. These fees are often not that high, and even if they are, they will not set you back unless you are trading huge figures.
For a complete beginner, it is safer to trade with slightly higher fees on secure platforms than risk on those which are less secure and offer lower fees.
What is the Wallet Address?
Wallet Address is also known as a Public Key, and it is a set of random characters which are the address to your wallet. It is something that you send to the parties from which you require payments. It is something like your bank account number.
There is also a Private Key, this is something that only you can know in order to access your wallet. Think of it as a PIN. However, it is not often used, and in order to log into your wallet, you will often need to type in the password and even undergo the 2-factor-authentication.
What are Altcoins?
Once you buy your first major crypto, you can either buy something with it, hold it, or exchange it. The fun actually starts with the last option, when you decide to go one step further into the crypto industry and to trade different minor cryptos, which are also known as Altcoins.
Now, there are more than a thousand altcoins, and every now and then new ones pop up. They are often connected to the ICOs.
Should I Invest in ICOs?
ICO stands for the Initial Coin Offering and the principle is very similar to the Initial Public Offering. The main difference is that you do not actually get the ownership right and the voting right. Investing in ICO means crowdfunding a startup that is based on the blockchain technology and has a coin of its own.
This means that if you like the idea behind some company and believe that it will work, you can buy their coins for a certain amount of money (ICOs mainly accept cryptocurrencies but not fiat). Sometimes, these coins will work as shares, and sometimes just as a main currency of the ecosystem within a project. There are some very successful companies that actually started out as ICOs.
The Bottom Line – Research
These were just some of the basic concepts that you need to know before buying your first crypto. Nevertheless, there are many other things that you need to be aware of, but it cannot all fit into one book, let alone article. You want to start reading more about the crypto that you want to buy first and then make sure to research about the exchange that you will use for buying. Just take it slow and step by step!