If you’re reading this chances are that you are already curious about cryptocurrencies and maybe you are considering investing in them. But what are cryptocurrencies? Should you buy cryptocurrencies? Where can you buy cryptocurrencies and how? The purpose of this guide is to answer all of those questions.
What are cryptocurrencies?
Cryptocurrencies are a form of exchangeable cryptographic electronic money based on blockchain technology. They are not issued or backed by any governments but, instead they are designed as a free, global currency that can be used to buy and goods and services anywhere in the world. The designers hope and expect that, eventually, they will replace currencies such as the Dollar, the Euro or the Pound. Examples of cryptocurrencies currently available are Bitcoin, Ethereum, Litecoin, Dogecoin and Omni to name but a few. But new cryptocurrencies are emerging all the time.
Should you invest in cryptocurrencies?
Right now, Bitcoin is the most famous of the cryptocurrencies. If you had invested just $1000 in Bitcoin back in 2009, your investment could now be worth $10,000. But, of course, past performance is no guide to future success so before you buy cryptocurrencies you should do your research and decide if this is right for you. The golden rules for investors looking to buy cryptocurrencies (or any investment) are:
- Forget about getting rich quick
- Don’t invest any money that you need to live on
- Always do your research first
Read more: 8 Books Every Beginning Investor Should Read
Where and how you can buy cryptocurrencies?
You could start by heading over to Coinbase which is very popular and easy to use exchange which is widely trusted and where you can buy cryptocurrencies. Coinbase has charts showing the historic prices of various cryptocurrencies, including Bitcoin, Ethereum and Litecoin. They also have an app which you can download to your phone.
You will need to open an account with Coinbase and agree to their terms and conditions. But once you have done that, you are ready to buy cryptocurrencies. You can use your debit or credit card for small transactions or link to your bank account for larger transactions. To buy cryptocurrencies can choose the cryptocurrency from a dropdown list and how much of it you wish to buy. You will pay the equivalent in your local currency plus a small fee to Coinbase.
You can also invest in cryptocurrencies through Kraken. Kraken is a little more complicated than Coinbase but, on the plus side, you can buy cryptocurrencies like Ripple and Stellar through Kraken which you currently cannot buy through Coinbase.
You will have to sign-up through their website and provide your name, address and phone number and you may also need a valid government ID such as a passport and proof of residence. Once your account is verified, in order to buy cryptocurrencies, you will need to wire transfer money to Kraken from your bank account. Once you have done that you simply choose the cryptocurrency you wish to buy from their dropdown list, the amount you want to invest and hit the green button to confirm.