Where to buy Cryptocurrency?

By Aleksei Lossan

What are trading platforms and what are the alternative options for getting cryptocurrency?

                                

Where to buy crypto?

Those who decide to invest in the crypto market, face the question - where to buy Cryptocurrency, as well as on what platform to subsequently exchange it for fiat money.

What are trading platforms?

The most popular way to purchase Cryptocurrency is to register on a platform. that provides its customers with the services for exchanging fiat money for cryptocurrencies, and also provides the ability to withdraw the funds. At the same time, one coin can be exchanged for another. For example, a fairly popular scheme is to buy stablecoins for fiat, and then exchange stablecoins for Bitcoin, Ethereum, or other altcoins.

Trading platforms are either centralised or decentralised. All the largest and most popular platforms are centralised. To buy crypto on such a site, a trader must register in his personal account and provide a set of documents in accordance with the KYC principle (Know Your Customer). According to these requirements, the platform will require from the new user a copy of the passport, residence permit (if the person does not reside in the country of his citizenship), and also take a selfie.

In accordance with the international standards, specific exchanges may impose restrictions on the citizens of certain states. For example, the largest exchange Binance does not allow Russian citizens to keep assets on their accounts, the total value of which exceeds the equivalent of $10,000. After the user provides the documents, the platform will ask for some time for verification. Depending on the citizenship of the user and the workload of the exchange at a particular moment, verification can take from several minutes to several days.

After the verification is passed, the user can buy Cryptocurrency. First one needs to replenish the crypto wallet with fiat money. Each site offers different methods of replenishment - often platforms work with the largest payment systems Visa and MasterCard, as well as international banking service providers, for example, Revolut. It is crucial to choose an exchange that allows you to deposit and withdraw funds from your crypto wallet in the currency of the account. Otherwise, one will have to use other platform to withdraw funds or pay additional fees for conversion. That is, if one has an account in euros, then he needs to find a platform that allows to replenish the wallet from a euro account.

An order is needed to conclude a sale and purchase transaction subject to certain conditions. The most popular are limit orders, which are executed if the price of the Cryptocurrency has reached a certain level.

Conversely, one can set a limit order to sell when a certain level is reached. Let's say, if the price of Bitcoin reaches $30,000. Such an order is called a take profit, since it implies that one has earned on the growth of the rate. If the market goes down and one wants to get rid of the coins in order not to lose even more, then he can set a stop loss order.

Automatic orders allow a trader not to constantly monitor the rate of cryptocurrencies and not to conduct transactions in manual mode. The main reason is that the crypto market is extremely volatile, and the value of a particular coin can change by tens of percent literally within one day. However, there is a type of investment aimed at long-term storage of cryptocurrency - this is the so-called hodling. Under this strategy, the investor simply stores his coins for a long period of time.

If an investor does not need daily trading, then experienced traders recommend to withdraw the assets from a platform to an external crypto wallet, preferably not permanently connected to the Internet. In this case, the coins will be better protected from scammers and hacking. Despite the fact that the largest platforms have seriously improved their security tools, the vulnerability to hacking is still perhaps the biggest obstacle for the development of the crypto market.

One of the most popular methods of fraud is the creation of mirrors of popular exchanges - the user registers on the site and is sure that he opened a wallet on one of the reliable trading platforms. For a long time, he may not suspect fraud until he tries to withdraw funds from the site. In this case, the pseudo-exchange will require him to pay some fairly substantial commission. This means that the investor has become a victim of fraudsters, and his money has already been stolen at the time of their entry into the site, and the trade was just an imitation.

In order not to get into such a situation, one needs to carefully check the correctness of the entered address of the exchange, it must be opened using the secure https protocol, and even better, download the exchange application to your phone or computer. To work in the application, one must go through the identification procedure every time, but this reduces the risk of fraud.

Alternative options for getting Cryptocurrency

In addition to buying on a platform, there are alternative ways to receive Cryptocurrency that do not require the user to deposit funds to the wallet or go through the verification procedure. However, they all involve some effort.

Mining, games, airdrop

  • Mining

Mining involves the extraction of cryptocurrency, most often as a result of solving a complex mathematical problem. This mining method is called Proof-of-Work. This is exactly how Bitcoin mining works. The main obstacle is that over time, solving the problem and getting Bitcoin becomes more and more difficult.

The emission of BTC is arranged in such a way that the volume of mining should sharply decrease over the years. If the first miners could get cryptocurrency using a regular computer, now BTC mining requires full-fledged crypto farms, consisting of tens or hundreds, and sometimes even thousands of devices. Moreover, the economics of mining works in such a way that for the process to be profitable, the miner must have access to cheap electricity. For an individual, the solution to such a dilemma is almost impossible.

Proof-of-Stake is considered an alternative method of mining cryptocurrencies, when the user, with his consent, temporarily blocks coins in exchange for staking, that is, this is the process of freezing a certain number of cryptocurrencies and verifying transactions on the network, as a result of which, over time, the user receives back not only the invested coins, but also an additional profit. This is how the second Cryptocurrency in the world, Ethereum, has been working since September 2022, however, in order to earn coins in this way, one must already have some amount of crypto. In fact, such a scheme is very similar to a bank deposit.

  • Games

An alternative way to get crypto is to participate in games, such as online casinos. One can get paid in cryptocurrency (usually satoshi, one hundred millionth of a Bitcoin) for performing certain actions and achieving certain results. To earn substantial profits, investors are advised to register on several such platforms at once.

This also includes the so-called Bitcoin faucets, when the user receives Cryptocurrency in exchange for completing tasks, such as viewing ads, completing a survey, or checking captcha. However, in this case, we are mainly talking about microscopic amounts. At the same time, the withdrawal of funds can only be allowed when the amount of remuneration reaches a certain level, and in fact it is very difficult to achieve this.

  • Drops

One of the most popular ways to get Cryptocurrency for free is an airdrop, when the user is simply given coins as part of an advertising campaign. This method appeared due to the fact that advertising of new Cryptocurrency projects is not welcome on social networks. Therefore, the creators of new currencies decided to use influencers - popular users of social networks and offer them coins for free in exchange for some kind of promotion.

In fact, it is like a test drive, only in the crypto market. There are two main difficulties in this case. Firstly, in order to get coins for free, it is desirable to be a popular user. Secondly, it is impossible to earn the most popular coins like Bitcoin or Ethereum this way. And there is a great chance to get shitcoins in your piggy bank - coins that have no real value. Thirdly, the so-called ‘finfluencers’ are getting more liable for such financial promotions as regulation of these financial advertisements gets more severe throughout countries trying to regulate cryptocurrencies.

The material provided on this website is for information purposes only and should not be regarded as investment research or investment advice. Any opinion that may be provided on this page is a subjective point of view of the author and does not constitute a recommendation by Currency Com or its partners. We do not make any endorsements or warranty on the accuracy or completeness of the information that is provided on this page. By relying on the information on this page, you acknowledge that you are acting knowingly and independently and that you accept all the risks involved.
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