Since the boom (and bust) of December, many tech-savvy individuals are asking how to buy cryptocurrency. The short answer is through a cryptocurrency exchange, but that’s definitely oversimplifying it.
Cryptocurrency exchanges are platforms for buying and trading cryptocurrencies. Users can trade resources, cash or credit for the desired cryptocurrency such as Bitcoin or Ethereum.
Since there are hundreds of different cryptocurrency exchanges running today, causing this emerging market to expand rapidly with little regulation. As a result, we think it’s necessary and fair to give users a voice in policing them. This will help users easily identify exchanges with fair and just practices. It will also help point out which are difficult to use and may be better suited.
Best place to buy cryptocurrency
We’ve added 50 of the largest and most commonly used cryptocurrency exchange platforms running today. Coinbase is one of the top-200 websites in the U.S., according to Alexa.com. Binance, Poloniex, and GDAX are all top-1,000 websites as well. These sites see millions of daily users and millions in 24-hour trading volume.
There’s no shortage of interest in setting up accounts and purchasing cryptocurrency on a crypto exchange comparison, but users should know what they’re signing up for. They should also know best practices to avoid scams and deter cybercriminals.
The best places to buy cryptocurrency will be trusted online providers and discussed on multiple mediums. Real user reviews on G2 Crowd will provide practical insight into each exchange’s platform and features. Users can freely call out shady business practices and identify the safest and most reliable trading platforms.
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How to buy cryptocurrency with USD
Many cryptocurrency exchanges support common payment forms such as debit purchases and bank linking. Most sites will require you submit personal credentials such as a bank statement, a photo of your driver’s license or some other commonly used verification document.
On the other hand, some exchanges only allow users to deposit funds and purchase currency using cryptocurrency. Traditionally, sites that support altcoin purchases are less likely to accept fiat money, cash or credit, deposits. Poloniex, Bittrex and Bitfinex are a few examples. (Interestingly, Poloniex was recently purchased for $400 million by mobile payments app Circle.)
As a result, you will have to turn your USD, EUR or other currency into digital coin before getting started. This can be done either by transferring coins from a fiat-friendly site or depositing funds from a local source. But there are also non-online options for purchasing cryptocurrency. Sites such as LocalBitcoins.com allow you to find people near you selling cryptocurrency for in-person cash transactions. Some cities also have Bitcoin ATMs available to visit in person and purchase.
The big three
The “big three” in terms of cryptocurrency traditionally refers to Bitcoin, Ethereum and Litecoin. It should be noted, though, that as of March 5, 2018, Litecoin has a smaller market cap than both Ripple and Bitcoin Cash.
The easiest, though not necessarily the safest, way to begin buying cryptocurrency is by signing up for an exchange (like Coinbase) that supports debit card purchases. Aside from Coinbase, most cryptocurrency exchanges don’t allow users to purchase currency using debit cards.
Other cryptocurrency exchange platforms that support debit purchases include Cex.io, Bitstamp, and SpectroCoin. Other payment methods depend on the exchange, but the most common payment forms are bank account linking and wire transfers, as well as existing cryptocurrency funds.
When purchasing Bitcoin, Ethereum or Litecoin:
- Read fine print on fees
- Research cryptocurrency wallets
- Set up two-factor authentication on exchanges
- Back up your wallet or store coins on a hardware wallet
- Share your wallet credentials with anyone
- Reuse wallet addresses
- Buy from sites you’ve never heard of
- Fall for scams like “bitcoin doublers”
How to buy Altcoins
Everyone is searching for “the next Bitcoin.” But identifying trends and predicting a coin’s likelihood to boom is difficult, and many intelligent people are working on it. In the meantime, I’ll give a quick guide on purchasing alternative coins.
Since fiat-friendly altcoin exchanges are rare, you’ll likely have to follow the “How to buy cryptocurrency with USD” steps and turn your cash into coin. With hundreds of coins on the market traded every day, researching various possible investments can be exhausting.
Since many people are asking how to buy Ripple, how to buy Stellar, or how to buy Iota, let’s play out a scenario and take a look at one example of buying altcoins.
How to buy Ripple (XRP):
Ripple is a little trickier than Bitcoin or Ethereum. It’s not available on Coinbase as of this writing, but many prospective buyers are looking to get their hands on it. Luckily, some commonly used sites including Kraken and Bitstamp.
But is it possible to buy Ripple with Coinbase? The quick answer is no, not alone. But if you’re willing to go through a few steps, it’s doable without too much confusion.
If your current cryptocurrency exchange doesn’t support Ripple purchases, the first step is setting up an account with a platform that does. Other coins may list exchanges supporting their currency on their own website. If they don’t, Coinmarketcap.com offers an easy tool to help. Each coin’s page has a “Markets” tab that identifies supported exchanges and where that coin is traded most often.
Once your new account is created, you’ll have to deposit funds; it may take time to validate new bank accounts or fulfil other verification processes. Sometimes you can skip validating a bank account by simply transferring some of your current cryptocurrency portfolio to the new platform. You’ll likely have to do the same thing to withdraw, but it can speed up the initial purchase.
But that’s all it really takes to add some XRP to your wallet. If you’re considering investing, other notable cryptocurrency exchanges that support Ripple (XRP) include Coinone, Bitso, Coincheck and Korbit.
When purchasing altcoins:
- Research coins and historical trends
- Understand the fees
- Be patient with investments and set goals
- Follow the “Dos” for traditional coins
- Get FOMO (fear of missing out)
- Go “all in” on one altcoin
- Buy unknown coins or use unfamiliar exchanges
- Follow the “Don’ts” for traditional coins
Every component of the cryptocurrency market is becoming more important to businesses each day. Companies can use these platforms to purchase cryptocurrencies, process payments on products or complete purchases of their own. Businesses may be mining their own coins to sell on the market or stocking up in case of a ransomware attack.
It’s tough to understand how or if companies can be taxed on cryptocurrency assets. As a business, it would be wise to contact a legal expert before investing. It’s also a fairly unpredictable investment, so don’t throw all your eggs into one basket.
Exchanges are the easiest and most frequently used medium for businesses to begin investing in cryptocurrencies. They can also be used as practical platforms for international trading to cut down on transactional fees. People and companies are finding creative new uses for bitcoin every day. Some are questionable, like using visitors’ computers to mine, but others are innovative, like using the energy from mining to heat your home.
If you use a digital currency exchange, give us your insight on our Cryptocurrency Exchange category page. Help make the internet a safer place for individuals and businesses hoping to jump into the cryptocurrency marketplace.
Looking for cryptocurrency exchanges? Check out the best cryptocurrency exchanges according to G2 Crowd’s real-user reviews.