There is a lot to learn just covering the basics of cryptocurrency and how to buy your first bitcoin. Even though you may have told yourself you can handle the risk and volatility, when you finally attempt trading cryptocurrency on an exchange, your stomach may tell you otherwise. Volatility is what traders rely on to make money, and on any given day individual cryptocurrencies could be going up or down anywhere from 5 – 50% (or more). There may be a hundred or more cryptocurrencies trading on a particular exchange, and each one may have multiple trading pairs. Without a little practise beforehand, the experience can be so overwhelming, you may feel like giving up before you even start. What you need is a controlled place to practise that doesn’t involve risk to your money.
Exchange Security Tips
- Always have up to date antivirus software installed on all devices.
- If you are concerned about linking a bank account or credit card to an exchange, use a separate account or card that doesn’t have a very high spending limit.
- For added security, use a separate email address to register at each exchange.
- Protect your email address! Keep it as private as possible and use a strong password with it.
- Do not open any links from random emails that ‘appear’ to be sent from your exchange. Sign in to your exchange account directly on their website, and see if there are any issues with your account or if they have posted any notices.
- Do not lose the information needed to log in to your exchange accounts, as it can be very expensive to retrieve. It could end up costing you 0.1 bitcoin to retrieve and keep you from your account for a couple of months.
- There have been numerous security breaches – Do not leave large amounts of cryptocurrency on an exchange!
- If you are going to actively trade cryptocurrencies, and can afford it, use a new secure computer for this purpose only.
- Trade at your own risk…
How to Choose a Cryptocurrency Exchange?
Not all exchanges are created equal. Some only list bitcoin and possibly a few other cryptocurrencies, while others may have over a hundred listings. There are exchanges that allow you to fund your account (often meaning to buy bitcoin first) using one or more of the following: linked bank account, Interac, debit card, VISA, MasterCard, e-Transfer, bank wire or draft, money transfer, Flexpin, SEPA, Payeer, OKPAY, and more. Other exchanges don’t have any type of fiat funding, and only allow listed cryptocurrencies to be transferred in. From there they can be exchanged for another cryptocurrency or used in trading.
- What are you buying bitcoin for? Is it an investment, or do you plan to participate in active trading? Did you buy it in order to exchange it for other cryptocurrencies? If so, you will need an exchange that sells the different currencies you want. Do you want, or need to be able to deposit money directly into your exchange account? Not all exchanges have this option. If you bought it to actively trade cryptocurrencies, check to make sure the exchange has the trading features you want such as stop-loss or limit orders and margin trading.
- Where is the exchange located? Your location may limit you from opening an account in certain countries. Are you comfortable with where it’s located?
- Is the exchange regulated? If an exchange is operating in a country that requires regulatory compliance, it is a lot less likely they will ‘disappear’ with the bitcoin in tow. If you had to verify your identity with government issued ID, they are likely following some sort of regulations.
- Does the exchange have a good security record? Check out how they keep customer deposits of cryptocurrency safe? How have they handled security breaches in the past? Do they offer any guarantee? Are they insured?
- Is customer service important to you? Some exchanges fail brutally in this department, so if you are new to the industry, you may want to stick with the exchanges that are a little more helpful.
- Internet search – Once you narrow it down to exchanges that suit your location and trading needs, a lot of questions can be answered with a google search. People that have been burned by exchanges with poor customer service, security issues, missing funds etc, are very vocal with their displeasure!
There are cryptocurrency exchanges all over the world, most of them operating with very little oversight. There are 170 exchanges listed on CoinMarketcap alone, with new ones popping up every week. Choose wisely. Below are some of the more popular ones.
Any information such as individual cryptocurrency mentions or buy/sell recommendations in the videos listed, are not to be interpreted as advice in any way on the part of DNotesEDU. Videos were chosen ONLY on their quality of exchange explanation.
Instant Buy Options:
These are by far the easiest way to buy bitcoin for beginners. The fees are quite a bit higher than those charged by the exchanges that sell bitcoin, but for getting started or buying small amounts once in a while, check one of these out.