You’ve heard about the cryptocurrency craze, but don’t know where to begin? Don’t worry! We’ve got you covered with this beginner’s guide to buying cryptocurrency. In this article, we will discuss what cryptocurrency is, how to get started, and the risks and advantages of using it as an investment vehicle. When you have finished reading this guide, you will have the tools necessary to choose your own approach to cryptocurrency trading and investments. Let’s get started!
What is Cryptocurrency?
Cryptocurrency is a digital asset designed to work as a medium of exchange using cryptography to secure transactions, verify them and prevent counterfeiting. Bitcoin was invented in 2009 by an unknown person or group under the name Satoshi Nakamoto; since then, many have come up with different uses and systems for blockchain technology. (For a more detailed definition and other examples of cryptocurrencies, see our plain English guide.)
Popular cryptocurrencies
Bitcoin (BTC) and Ethereum (ETH) remain two of the most popular crypto-currencies on both crypto and fiat trading exchanges. However, there are currently 1,000 different cryptocurrencies in circulation, ranging from heavyweight players like BTC and ETH to more obscure currencies like Stellar Lumens (XLM). Bitcoin’s scaling issues have not slowed down growth; it remains one of – if not the - fastest-growing digital currencies.
Choosing an exchange
There are many options when it comes to buying Bitcoin, Ethereum, and other cryptocurrencies. One of them is Coinbase, a San Francisco-based exchange that offers three different products: Coinbase Pro (currency trading), Coinbase Prime (financial services), and an Index Fund. Crypto investors are drawn to exchanges because they offer convenience and security. Security is especially important in crypto investing due to its high volatility; digital assets need space where they can grow without being affected by external events. But what makes one exchange better than another?
Why can't I send cryptocurrency directly from an exchange to my wallet?
Cryptocurrency exchanges, such as Coinbase and Binance, act as custodians of your digital currency. These platforms allow you to trade fiat currencies (such as USD and EUR) in exchange for different cryptocurrencies like Bitcoin, Ethereum, or Litecoin. Although these companies provide a service that's valuable by helping you easily purchase crypto, they don't offer a way to directly send crypto from one wallet address (the public address used on blockchains that correspond with each coin) to another.
Transferring cryptocurrencies between wallets
When you’re transferring crypto from one wallet to another, you need a destination address. This is usually a long string of characters. If it’s an ERC-20 token, like Kin, it will have an extra field called burn address which you should not use. An ETH address always begins with 0x and an EOS address starts with eos.
Coinbase- Cryptocurrency Exchange
one of its main features is that it allows you to trade cryptocurrency in a very simple way, using different types of coins and trading pairs. Coinbase- Coinbase is one of today’s leading digital asset exchanges. You can access your account and conduct trades from both web and mobile devices. Once you verify your phone number, you can use any device at any time to purchase Bitcoin or Ether with a credit card or bank account.