How to buy cryptocurrency...

 If you are new to the world of cryptocurrencies, knowing how to buy Bitcoin, Dogecoin, Ethereum and other cryptocurrencies can be confusing at first.

Fortunately, the chords are very easy to learn. You can start investing in cryptocurrency by following these five simple steps.

Remember: investing in cryptocurrency is purely speculative, and your capital is at risk. You may lose some or all of your money.

Moreover, cryptocurrency trading in India is largely unregulated, and if something goes wrong – for example, the company goes bankrupt – you will not have the right to resort to compensation.

1. Choosing a broker or crypto exchange

To buy cryptocurrency, you first need to choose a broker or a crypto exchange. Although this allows you to either buy cryptocurrency, there are key differences between the two that should be kept in mind.

What is a cryptocurrency exchange?

A cryptocurrency exchange is a platform where buyers and sellers meet to trade cryptocurrencies. Exchanges often have relatively low fees, but they tend to have more complex interfaces with multiple types of trading and advanced performance charts, which can make them intimidating for new crypto investors.

Some of the most famous cryptocurrency exchanges are xirex, coindex, XPay and onocoin. While the standard trading interfaces of these companies can overwhelm newcomers, especially those with no experience trading stocks, they also offer easy-to-use buying options.

However, you have to pay for convenience, since the options that are convenient for beginners are much more expensive than buying the same cryptocurrency through the standard trading interface of each platform. To save costs, you may want to learn enough to take advantage of standard trading platforms before making your first cryptocurrency purchase – or shortly thereafter.

Important note: As a beginner in cryptography, you will need to make sure that your chosen exchange or brokerage company allows transfers in fiat currency (for example, GBP and INR) and purchases made using GBP. Some exchanges allow you to buy cryptocurrencies only using another cryptocurrency, which means that you will have to find another exchange to buy tokens that your favorite exchange accepts before you can start trading cryptocurrencies on this platform.

What is a cryptocurrency broker?

Cryptocurrency brokers eliminate the complexity of buying cryptocurrencies by offering user-friendly interfaces that interact with exchanges for you. Some charge higher fees than exchanges. Others claim that they are "free", making money by selling information about what you and other traders buy and sell to large brokerage firms or funds, or by not executing your trade at the best possible price in the market.

Although this is undoubtedly convenient, you should be careful with brokers, because you may face restrictions on transferring your cryptocurrency assets from the platform. With some, for example, you cannot transfer your crypto assets from your account.

This may not seem like such a big deal, but advanced crypto investors prefer to store their coins in crypto wallets for greater security. Some even opt for offline wallets to encrypt devices for greater security.

2. Create and confirm your account

Once you have decided on a broker or a cryptocurrency exchange, you can register to open an account. Depending on the platform and the amount you plan to purchase, you may need to verify your identity. This is an important step to prevent fraud and comply with regulatory requirements.

You may not be able to buy or sell cryptocurrency until you complete the verification process. The platform may ask you to provide a copy of your driver's license or passport, and you may even be asked to upload a personal photo to prove that your appearance matches the documents you provide.

3. Deposit cash for investment

To purchase cryptocurrencies, you will need to make sure that you have funds in your account. You can deposit money into your crypto account by linking your bank account or making a payment using a debit card. 

4. Place your cryptocurrency order

As soon as funds appear on your account, you will be ready to place your first order for cryptocurrency. There are hundreds of cryptocurrencies to choose from, ranging from well-known names like Bitcoin and Ethereum to more obscure cryptocurrencies like Theta fuel or Hulu.

When you decide which cryptocurrency to buy, you can enter its indicator code – bitcoin, for example bitcoin - and how many coins you would like to buy. On most exchanges and brokers, you can buy fractional shares of cryptocurrency, which allows you to buy some of the expensive tokens, such as bitcoin or ethereum, the possession of which costs thousands of rupees.

5. Select the storage method

Cryptocurrency exchanges are not supported by the Reserve Bank of India and they are at risk of theft or hacking. You may even lose your investment if you forget or lose tokens to access your account. That's why it's so important to have a secure place to store your cryptocurrencies.

As mentioned above, if you buy cryptocurrency through an intermediary, you may have little or no choice in how to store your cryptocurrency. If you buy cryptocurrency through an exchange, you have more options:

Leave the cryptocurrency on the exchange. When you buy a cryptocurrency, it is usually stored in a so-called crypto wallet attached to the exchange. If you don't like the provider your exchange cooperates with, or you want to transfer it to a safer place, you can transfer it from the exchange to a separate hot or cold wallet. Depending on the exchange and the size of your transfer, you may have to pay a small commission for this.

Hot wallets. These are crypto wallets that are stored online and run on devices connected to the Internet, such as tablets, computers or phones. Hot wallets are convenient, but there is a greater risk of theft since they are still connected to the internet.

Cold wallets. Cold crypto wallets are offline, which makes them the safest option for storing cryptocurrencies. They take the form of external devices, such as a USB drive or a hard drive. However, you need to be careful with cold wallets: if you lose the associated key code or the device breaks or fails, you will not be able to get your cryptocurrency back. While the same can happen with some hot wallets, some of them are managed by guardians who can help you get back into your account if you are blocked.

Alternative ways to buy cryptocurrencies

Although buying cryptocurrencies is the main trend at the moment, it is a volatile and risky investment option. If investing in cryptocurrencies on an exchange or through an intermediary does not seem to you the right choice, here are some options for indirect investment in bitcoin and other cryptocurrencies:

1. Wait for crypto exchange-traded funds (ETFs)

Exchange-traded funds are popular investments that allow you to acquire access to hundreds of individual assets in one fell swoop. This means that they provide instant diversification and are less risky than choosing individual investments.

There is a huge demand for cryptocurrency ETFs that allow you to invest in several cryptocurrencies at once. Investors from India need to open a global account or invest through brokerage platforms through a channel approved by the Reserve Bank of India. To invest in cryptocurrency ETFs abroad, investors need to transfer funds according to an edited conversion scheme.

2. Invest in cryptocurrency-related companies

If you prefer to invest in companies with tangible products or services that are subject to regulatory oversight, but still want to have access to the cryptocurrency market, you can buy shares of companies that use or own cryptocurrencies and the blockchain that manages them. You will need an online brokerage account to purchase shares of listed companies, such as:

Nvidia (NVDA) this technology company develops and sells graphics processors that underlie the systems used for mining cryptocurrencies.

Maidan (Maidan) this provider of payment services for small businesses has bought bitcoin for millions of dollars since October 2020. In February 2021, the company announced that bitcoin accounts for about 5% of the funds on its balance sheet. In addition, the Square Cash app allows people to buy, sell and store cryptocurrency.

As with any investment, be sure to consider your investment goals and current financial situation before investing in cryptocurrencies or individual companies that have a significant stake in them. Cryptocurrency can be very volatile - one tweet can cause its price to fall – and it's still a very speculative investment. This means that you should invest carefully and prudently.