How Do You Buy and Sell Cryptocurrencies: Over the last few months, so much focus has been on the crypto world. Analysts have shed so much light on what Cryptocurrencies are and how they can be used. In addition, the process of buying and selling Cryptocurrencies has also been simplified. Some of the important factors that you should consider before you buy or sell the virtual currency include: • Type of Cryptocurrency • Payment method • Cost of Fees • Location and Regulations • Security of the exchange.
Cryptocurrencies are bought and sold via an exchange. For you to either buy or sell the virtual coins, you need to set up an exchange account and store the virtual currencies in your digital wallet. Specifically, the wallets tend to store the private keys and public address. Hence, you are able to securely interact with the blockchain. The various forms of wallet are:
Software wallet- It is recommended for active buyers and sellers due to their easy access using a phone or laptop and quick transaction time.
Hardware wallet- It is a safer way to store any amount of virtual currency compared to the software wallet. The private keys are stored in a device that is offline as it is disconnected from the internet. Thus, it cannot be hacked. Paper wallet- It maintains the full immunity feature. The paper wallet involves writing down or printing your private and public keys.
Steps in Buying and Selling Cryptocurrencies:
To effectively buy or sell a Cryptocurrency, you need to familiarize yourself with the Cryptocurrency exchanges. These online websites allow you to exchange your local currency for Cryptocurrency. There are different types of exchanges available each differing from their levels of security to the different payment methods they accept. The most general steps to follow before buying or even selling a digital coin include:
Step 1: Registration
The first step before you can start trading is signing up. At this step, you have an option to create either a business or private account. You will be required to provide details such as your full name, phone number, and email address among others.
Step 2: Verification
The second step entails verification of your identity. During the verification process, the user needs a passport or driving license.
Step 3: 2-step Authentication
At this step, the user is required to set up a 2-step verification. This is useful in securing the account and putting off hackers.
Step 4: Connect Your Bank Account, Debit Card, or Credit Card
This step involves linking your bank account, debit card, or credit card to your exchange account. This enables you to exchange digital currency into and out of your local currency.
Step 5: Buy or Sell the Cryptocurrency
This is the main step, which involves trading with the Cryptocurrencies. Now, you can freely trade your local currency from your bank account for the Bitcoin or altcoins that you desire.
Various types of Cryptocurrency Exchanges:
Coinbase is the most popular Cryptocurrency exchange. This exchange allows three payment methods: debit/credit card, bank account and wire transfer. Coinbase has increased its popularity over time due to an easy-to-use interface and the local currency wallet feature. The feature allows the consumer to place the fund in their national currency using it to buy the digital currency later. Coinbase is the fastest Cryptocurrency exchange in terms of transferring money from your bank account. However, it lacks basic features and charges high fees. Currently, Coinbase supports coins like Bitcoin, Bitcoin Cash, Ethereum, Zcash, Basic Attention Token, Ox and Litecoin.
Binance is another well-renowned Cryptocurrency exchange that is fast growing. The exchange creates a platform that allows buying and selling of an extensive range of reputable coins. Binance has recently increased its popularity due to its high liquidity feature. In addition, the exchange supports multi-language.
With Robinhood, a finance app with an already established extensive market, it has taken the crypto world by a storm. The Cryptocurrency exchange plans to extend its no-fee trading policy to Cryptocurrencies. Currently, their funding options remain to be through bank accounts with a fast approval rate. Additionally, Robinhood allows you to trade Bitcoins, Ethereum, Litecoin and Dogecoin.
Gemini remains to be one of the most regulated Cryptocurrency exchange platforms. The Cryptocurrency exchange lacks limits on deposits or withdrawals for any accounts. Gemini allows users to deposit fiat currency and trade Bitcoin, Bitcoin Cash, Ethereum, Litecoin and Zcash.
Bittrex is another online Cryptocurrency exchange that offers access to Ethereum, Bitcoins among other digital currencies. The Cryptocurrency exchange enables access depending on the level of verification the users have obtained. The enhanced level is the highest level of verification implying the users at that level will have the most freedom in withdrawing Cryptocurrencies to their wallets. The other levels include basic and unverified. All the transactions of the Bittrex are controlled by the Blockchain network.
Tips on How to Buy and Sell Cryptocurrencies.
1. Ensure you consider more than one exchange. Whenever you are buying or selling your Cryptocurrencies ensure you put into account factors such as variety of payment methods, lower fees and user-friendly interface.
2. Do not be in a rush to exchange your digital coins. When you have the digital coins, you can opt to use to buy goods because more business entities are accepting cryptocurrencies.
3. Choose the popular coins, trading platforms and exchanges. As a new trader in the Cryptocurrency world; you should trust the market dynamics. Later you can use the experience gained to make competent decisions.
Disclaimer: I own a portion of a Bitcoin, as I also believe this may be the next evolution of currency.