What is a Cryptocurrency?
Cryptocurrency is a type of digital asset used as a medium of exchange. The most famous one is Bitcoin. Other common terms for cryptocurrencies are digital tokens or digital assets. They are all stored in distributed ledgers called blockchains. Each blockchain has its own digital token. In the case of Bitcoin, it is the Bitcoin token. Other examples are Ethereum, Litecoin, Monero, Dash, Zcash, etc. Each digital coin has its properties and functions. This tutorial will focus on Bitcoin but could be used for any other cryptocurrency.
Where to buy Bitcoin & other Cryptocurrencies:
There are different places where you can buy bitcoin and other cryptocurrencies (see figure). You can choose between:
Cryptocurrency exchanges (online):
Bitcoin ATMs (you put money inside and can load your bitcoin wallet)
Bitcoin Voucher Cards (ie. Austrian Post office, House of Nakamoto, Azteco London)
Buy it personally from other people
To buy bitcoin you can use standard payment methods including bank transfers, credit cards, cash or Paypal. They all have their pros and cons. Bank transfers are slower compared to other methods; credit cards have high transaction fees, paypal has transaction limits, and cash does not get the best exchange rates. The following figure will give you the brief overview of the ways you could buy cryptocurrency and the possible payment methods.
The best way to start buying Coinmarketcap is by opening a wallet with one of the large cryptocurrency exchange websites. To open an account each user needs to provide an official document ID. At the exchange, you can buy most of the popular coins and hold them in the same wallet. It is convenient and will save you a lot of time. The type of wallet is called an online wallet, and people rely on the exchange to keep their funds safe. After you bought your first bitcoin or any other cryptocurrency, you should consider transferring the funds to a more secure wallet, which is controlled only by you. There are different ways you can purchase cryptocurrency. For the sake of simplicity let’s concentrate on Bitcoin.
Coinbase is the most popular Bitcoin online exchange in the US. It operates in a number of European countries as well and provides best in class user experience and usability. It should be pointed out that Coinbase is one of the few exchanges which insures all the funds stored on its platform. In the case of a security breach, the insurance policy should cover the losses. The company offers a mobile app as well. You can purchase Bitcoin via bank wire or a credit card.
Anycoindirect is a European cryptocurrency exchange. It does not provide a dedicated online wallet. Customers use their bank account to send money to the provider. After the money is received, users get the amount in Bitcoin transferred to the address they have provided.
Cex allows for buying bitcoins with credit card or bank transfer. The exchange has worldwide coverage and offers a trading* platform with the ability for margin trading as well.
Shapeshift is a different type of exchange. The platform is aimed at users who hold a portfolio of different cryptocurrencies. The idea behind the exchange is to swap easily coins for other coins, without even needing to register an account. It offers a high degree of privacy. If you own already bitcoin this is a great place to buy other cryptocurrencies.
LocalBitcoins is a P2P(Peer-to-peer or Person-to-Person) Bitcoin exchange. Buyers and sellers agree on trade terms. The exchange connects local people who want to trade bitcoins. Payment methods are determined by the sellers, you can buy coins with Paypal, via bank wire or even with cash. The platform can offer high degree of privacy.
Kraken is US based cryptocurrency exchange and trading* platform. It operates in Europe as well. It offers bitcoin margin trading. Bank transfers are the only way to buy bitcoins from Kraken.
Bitrush is a cryptocurrency exchange that currently operates in Europe. People can buy coins instantly with creditcard, iDEAL, Bancontact and MyBank.
Bitstamp is the first regulated and licensed virtual currency exchange in the EU. Users can deposit their funds via bank transfer and buy bitcoins. Bitstamp is also a trading* platform.
Gemini is a cryptocurrency exchange and trading platform. Currently, it operates only in the US. It allows both individual and institutional customers to buy, sell, and store digital assets. Additionally, the platform FDIC-insurees up to $250,000 per beneficial owner(US dollars only). You can buy bitcoins via bank deposit.
OkCoin is one of the biggest Chinese exchanges and trading* platforms
Coinmama is a Bitcoin broker that specializes in letting you purchase bitcoin with a debit or credit card.