After the creation of Bitcoin in 2009, we have witnessed a massive rollout of different digital assets over the years. Most of these tokens have followed in Bitcoin’s footsteps in terms of achievement. However, no asset has been able to come close, save for Ethereum, the second most successful digital asset. During this period, the digital asset world has evolved from the assets used for payments and exchanges to other things. With new use cases springing up, traders are entering the market to scoop up most of the tokens of their choice. In this article, we will be taking you through the steps to undergo before you dip your feet in the crypto market.
What are Cryptocurrencies?
Cryptocurrencies are currencies that are based on a digital ledger. By virtue of this, it is hard to counterfeit since they are secured using cryptography. The majority of the digital assets in the market are decentralized. This means they are all developed on a distributed ledger technology called the blockchain. One great feature that cryptocurrencies have is they do not conform to the control that physical cash undergoes. This means that they are immune to the government or individual control, manipulation, and interference.
How do Cryptocurrencies work?
Getting a cryptocurrency might be easy or hard, depending on its algorithm. In some cases, such as Bitcoin, getting one Bitcoin is hard because it undergoes a proof of work algorithm. This means that miners have to solve complex mathematical problems to get one Bitcoin. In some other cases, some tokens are gotten through proof of stake. This means that users must stake a small amount to compete for huge rewards. These activities help secure the network, and in return, the users get rewarded. However, one can choose to buy digital assets from exchanges, which has been one of the easiest methods of getting one. However, not all exchanges have all the tokens in the market, but research can get the token he wants to buy. Cryptocurrencies were designed mainly for payments but have outgrown. With this, firms have continued to adapt them as means of payments or statements of account.
Steps to undergo before buying crypto
As mentioned earlier, mining crypto is one of the most challenging activities to get a piece of the digital asset. Besides solving these mathematical problems, the energy expended has been frowned at by most people. In a bid to save you from the stress of having to mine a digital asset, you can purchase one from a trusted crypto exchange. Below are the steps you can undertake before purchasing your first digital asset.
Learn about the crypto market
The crypto market is very diverse, and it takes a lot of research and studying before one can get a hold of it. The market is divided into various sectors and houses different tokens. Ideally, even expert traders have not fully grasped how the crypto market works. This means that it would be more tasking for new traders to learn about the market. However, with great research and dedication, you could be on your way to enjoying massive profits in the crypto market.
Research tokens to purchase
Trying to check out the market for a soft landing is one thing, but choosing a token to purchase is another. The crypto market houses diverse tokens across the many sectors in the market. This is because most of the tokens have different use cases that make them distinct. Also, they have different factors that determine the flow of their price. However, it would be best to focus and not leave anything to chance when checking out the tokens.
Register with an exchange
Once the time for research is over, you need to knock yourself back into reality. This next step is where things get interesting. Since you can’t mine a digital asset, you will need to purchase the ones you choose. With that, you will need to register with a crypto exchange. Crypto exchanges are the intermediary between traders and digital assets. They sell digital assets to traders while taking some percentage as their reward for providing such services. You will need to research which exchange better suits you. After this, you will register with the exchange and undergo all the verification checks to become a bonafide exchange user.
Verify your account
Registering an account is one of the few steps you need to go through before buying your first digital asset. This is because the market is vast, and exchanges need to make sure they can cover for all their users. There are mandatory checks before a user can be finally onboarded on a crypto exchange. To carry out transactions on a crypto exchange, you will need to verify your details. Exchanges also require users to do a deep verification to extend or increase their transaction limit per month. Once all this is achieved, you can now begin the process of buying your first digital asset.
Buy a crypto wallet
Some traders prefer to carry out their trades on various centralized exchanges, while some are opposed to those activities. Each trader must know what suits them in the market and stick to it. For example, some traders prefer to hold the keys to their wallets rather than give them up to an exchange. Although it is good to use a centralized exchange, hack risks and other issues will surface. Some traders prefer to buy an offline wallet to store their digital assets. Although there are a few wallets in the space, the honorable mentions are still Ledger and Trevor wallets.
Step By Step Guide To Purchase Crypto
Dipping your feet into the crypto world cannot go without touching the critical ingredient you need to get started. Although most people have fumbled up the steps, we are here to guide you on the right path. Buying your first crypto might look tasking, but this article will simplify it in a way that you will understand. Notably, we will be using Bitcoin as an example in this case. Below are the steps you need to undertake to buy your first digital asset:
Choose your Exchange
As mentioned above, choosing your exchange is one of the most integral aspects of dipping your feet in the crypto market. The exchange you choose will determine the type of service you will be open to. This will shape your view of the market. So you should do your research and choose a crypto exchange that will simplify the process. Popular crypto exchanges such as Binance and Coinbase provide different services but with the same aim of attending to your crypto needs. Although their interfaces suit experts the most, they have a better way of onboarding new users and making them feel at ease.
Create your Account
This is the next step you will undergo after researching and picking the crypto exchange of your choice. To carry out any service on the platform, you will need to register your account. Most of the time, many of these exchanges require your details and other details when you sign up to use their platforms. This is because they have to follow basic regulations. Because of this, you must register your account with your actual name. Also, make sure all the spellings are correct pending verification.
Verify your account
After you have registered your account, the next step would require you to verify all the details you submitted during registration. This is done to ensure that you are who you claim you are. Also, some crypto exchanges do this to help their users increase their daily transaction limits. For example, the higher the verification you undertake, the more amount you can transact in a day. However, you will need to verify all your details before you can carry out any transaction.
Deposit Funds
With verification done and dusted, you can now move to buy your first digital asset. However, note that most centralized exchanges automatically provide you with wallets of known digital assets on verification. Also, some will allow you to import your already existing wallets provided you have somewhere. You will need to send in the fiat equivalent of the number of digital assets you want to buy. You should note that you must add a transaction fee to the fiat currency you are depositing on the exchange. This will enable you to buy the exact amount of digital assets that you intend to buy. Most exchanges allow users to deposit in dollars, euros, and even the native fiat currency of the country they reside in. Some exchanges also allow peer-to-peer deposits.
Buy your crypto
Once you are done with depositing your funds, and it has reflected, you can now move to buy the digital asset that you want. Presently, the market has many digital assets that you can choose from. For the sake of this tutorial, we can use Bitcoin. If you’re ready to purchase Bitcoin, you need to click on the asset and buy button on most exchanges. Meanwhile, some exchanges will need you to create an order for the purchase. Creating an order means buying the digital asset at a price limit. Once the asset price hits the limit, it will automatically be sent to your wallet.
Conclusion
Entering the crypto market can be a bittersweet experience for most traders. This is because of the highs and the lows of the crypto market. The market is volatile but known traders have been able to maneuver their ways to make more profit than losses. One important thing is that both new and old traders should ensure that they purchase digital assets based on their research. Traders should also avoid the Fear Of Missing Out (FOMO) syndrome. Once all these are checked, you are ready to go as a new trader in the crypto market.
