In little more than a decade, Bitcoin has grown from an almost worthless virtual token into what is now known as “digital gold”. Introduced to the public in 2009 by Satoshi Nakamoto (a pseudonym for the person or team behind the project), Bitcoin (BTC) initially received little attention and remained so for the first few years. There were just a few crypto enthusiasts who believed in the future of cryptocurrency and invested in the cryptocurrency project. Notably, at first, Bitcoin was not recognized as a new form of money by many large companies. However, as cryptocurrency became more widely used, its value began to gradually increase. This is why many people remember 2 pizzas bought in 2010 for 10,000 coins as one of the greatest follies of the 21st century.
The real boom in the crypto space came in 2017 when the price of Bitcoin reached almost $20k. For many people who have never been interested in cryptocurrency, this event could not go unnoticed. Many media outlets began to talk about “digital gold” and the promising technology behind it. Notably, many smaller crypto projects such as Ethereum, Litecoin (so-called altcoins) and others emerged trying to capture at least some of the glory of the crypto market pioneer. Relatively recently, in 2021, Bitcoin reached its current record price of nearly $70k. However, due to the Russian Federation’s invasion of Ukraine and the ensuing global economic downturn, the crypto market has turned into a bearish trend. While Bitcoin is now trading at a price comparable to its peak in 2017, it is too early to write it off. Moreover, Ethereum is preparing to move to a new consensus mechanism, and this has led to increased interest in the coin and an increase in its value. So, we’re here to tell you what cryptocurrency is, whether it’s worth buying Bitcoin and altcoins today, and about the best ways to buy cryptocurrency.
What is Cryptocurrency in General?
One of the reasons why the cryptocurrency is still not ubiquitous is because it is a much more complicated form of money to understand compared to regular money (fiat currencies). If you think of BTC and a crypto wallet as something like PayPal’s e-wallet, you are wrong. Cryptocurrency is a digital asset and a new form of money that uses a fundamentally new concept. Thus, according to an official document published in 2008 by the team that created Bitcoin, a cryptocurrency is an electronic cash system operating in a peer-to-peer network. When saying peer-to-peer network, BTC developers meant blockchain, a decentralized distributed ledger where tokens circulate. A peer-to-peer network is a system that allows a cryptocurrency to work just like a currency issued by a bank, but without the involvement of any central or controlling authority.
So, cryptocurrency is much more than just money protected by advanced cryptographic algorithms. In essence, it is money that operates in a fundamentally different environment than the traditional banking system. One important feature of Bitcoin and other cryptocurrencies is that they contain a built-in mechanism that prevents double usage, a serious problem with digital money. All transactions conducted within the blockchain network are irreversible so fraudsters cannot make changes to existing records or add new ones artificially. Given features such as decentralization, anonymity, fast and secure transactions, Bitcoin proved to be a very viable project. And new crypto projects began to emerge in its wake. According to CoinMarketCap, there are now 18,000+ tokens, and that number continues to grow. However, Bitcoin, Ethereum, Tether and a few others are still the market leaders in terms of capitalization and exchange rate.
Cryptocurrency for Beginners – How Bitcoin and Other Cryptos Work
Regardless of the purpose for which you want to buy Bitcoin or another cryptocurrency – whether to use it as an investment tool, store wealth, trade, or simply use it as a means of payment – the first thing you need to know is how crypto works. Once someone sends you tokens, you get a private address where you can access your digital assets. However, in order to make any transactions using tokens, you need a crypto wallet, which is special software that allows you to manage your crypto savings. Unlike PayPal, Skrill or any other traditional payment service, a crypto wallet doesn’t actually contain cryptocurrency. It’s just a kind of gateway for your tokens, which are stored as records in a blockchain. A crypto wallet is a bundle of public and private keys used for authentication of the user and secure transactions.
In addition to cryptocurrency wallets, there are also cryptocurrency exchanges that act as intermediaries between parties to buy or sell tokens. They operate as marketplaces where you can also buy tokens for fiat money or other virtual coins, exchange one cryptocurrency for another, or sell tokens for fiat money. Every time you want to pay with crypto for a product or service, you are essentially agreeing to have a certain amount of coins debited from your crypto account and then credited to the merchant’s account. Each transaction is encrypted with the sender’s private key and enters the distributed ledger as a record. To validate the transactions, there are special nodes in the network called miners. Their task is to verify the private keys. As a result of the verification, a new block of transactions appears in the blockchain and the network is updated. Notably, miners are involved in issuing cryptocurrency, a process that differs from how national currencies are issued. Each time a new block appears in the network as a result of the miners’ work, the blockchain generates a certain amount of coins to be credited to the miners’ account as a reward for its work. All of the above is done automatically without any third-party intervention.
Why is Crypto so in Demand Today?
Although the cryptocurrency market has declined due to negative political and economic developments in the world in 2022, Bitcoin, Ethereum and many other tokens are still highly popular. According to experts, the number of registered crypto wallets has increased significantly in the last 12 months. This indicates that people have become increasingly aware of the value of virtual coins. The predictions of skeptics and pessimistic people about Bitcoin have not come true. Cryptocurrency is hardly another economic bubble, and it proves its viability every day. So, let’s find out 3 main reasons why Bitcoin and other cryptos are rapidly gaining popularity today:
- Utility derived from the technology on which the crypto operates. Although blockchain was originally introduced as a decentralized ledger where tokens circulate, today it has many other applications. From automated software apps and smart contracts used in finance to gaming, blockchain has the potential to significantly improve the efficiency of processes across industries. In addition, a growing number of companies are accepting crypto payments.
- A promising investment vehicle. While Bitcoin is good as a way to pay for goods and services, it is also called ‘digital gold’ and for good reasons. Bitcoin has properties similar to precious metals such as gold and is therefore widely used as a way to store wealth or as an asset that can increase in value. From a niche product to a digital asset that has attracted the attention of millions of investors and traders worldwide, it took Bitcoin only a few years to reach such heights.
- The belief that Bitcoin and altcoins are the future of the financial system. Businesses from various fields are actively adopting blockchain technology to improve various processes and operations. Since cryptocurrency is based on blockchain, it may well become a common payment method.
However, while Bitcoin is spreading rapidly, it is not at the pace that some crypto enthusiasts expect. Bitcoin and other cryptocurrencies have some issues hindering global adoption, and we discuss them below.
How to Get into Crypto – Pros and Cons of Digital Assets
Bitcoin is the largest and most successful cryptocurrency today, even though its price has dropped dramatically from what it was in 2021. As the original token at the heart of the crypto industry as such, it has the best adoption rate and the largest network. In second place is Ethereum, an up-and-coming crypto project that has greatly expanded blockchain capabilities with support for dApps, smart contracts and NFT. So, buying Bitcoin and Ethereum seems like the best idea. However, before investing in cryptocurrency, you should learn about all its advantages and disadvantages. So, let’s start with the pros:
- Lack of entry barriers. According to statistics, around 1 billion people worldwide have no identity documents. And that means they have no access to traditional banking services. In addition, many people with ID are denied access to traditional financial products due to poor credit history and some other reasons. Bitcoin is a new kind of money that is available to anyone who has a device connected to a global network. With crypto, you don’t have to go to the bank and prove your identity.
- Security. First of all, the cryptocurrency transactions, performed within a peer-to-peer network (without intermediaries like centralized cryptocurrency exchanges) are anonymous. This means that it is extremely difficult for attackers to link transaction data to your identity. Second, crypto operates in an environment protected by strong cryptographic methods. As history shows, most crypto thefts were committed due to the negligence of crypto wallet owners themselves who revealed their private keys to attackers.
- High transaction speed. When you transfer funds from one bank card to another, the waiting time to complete a transaction can be up to 3 business days. As for crypto transactions, they are much faster. Usually, it takes only about 10 minutes for a new block of transactions to be added to the blockchain.
- Low fees. In most cases, the cost of transferring funds using cryptocurrency is much lower than with traditional financial instruments, especially when it comes to international money transfers.
Given the above, Bitcoin and some other highly rated cryptocurrencies look like very promising financial vehicles. Behind them is a robust system that works as perfectly as it might appear at first glance. However, from some of the advantages of BTC and altcoins – such as decentralization or anonymity – some drawbacks follow that you should be aware of. So, here are a few disadvantages of crypto that you should take into account before investing:
- Lack of insurance for the tokens you hold. For example, funds you hold in banks are subject to compulsory insurance. If the bank loses your money for any reason, you are guaranteed a portion of your funds. If bitcoins are lost or stolen, you have no one to turn to for help because the tokens circulate in a decentralized environment with no central regulator.
- Irreversible transactions mean that you cannot get your coins back if you send them to someone else by mistake. This means that you will not be able to reverse or cancel the transaction. Refunds are only available if you have a bona fide network member who decides to return the mistakenly sent tokens voluntarily.
- You may lose access to your crypto savings forever. Your bitcoins or altcoins are secured with private keys. If you forget or lose your private key, you will lose access to your crypto savings forever. Notably, about 3.7 million bitcoins are considered lost forever due to the carelessness and negligence of their holders.
- Price volatility. Cryptocurrencies are highly volatile digital assets with values that can fluctuate significantly over short periods of time. For example, Bitcoin, which was worth around $70,000 in the fall of 2021, is trading at around $20,000 at the time of writing. That is, BTC has fallen 3.5 times from its record value. Moreover, no one can give an accurate prediction as to what the price of the digital asset will be even in the short term.
Finally, even Bitcoin is still not a widely accepted currency. From a legal perspective, the treatment of cryptocurrency varies from country to country, and you need to take this into account before you buy some coins with fiat money.
Picking the Best Way to Buy Crypto
In the early days of the crypto industry, when Bitcoin was only of interest to geeks and those who could see the promise of the coin immediately, there were only a few ways to buy Bitcoin that were not at all secure. While today you can still buy tokens by arranging a face-to-face meeting with a holder, there are many other more reliable and safer methods. For example, there are crypto exchanges and mobile apps with which you can access digital assets in just a few clicks. However, you should be prepared to lose your anonymity because most brokerage platforms and exchanges adhere to KYC practices. So, here are some legal ways to buy crypto you should know about:
- Cryptocurrency exchanges. These are online platforms J2TX that focus exclusively on digital assets. They offer convenient tools for dealing with crypto. By opening an account on Coinbase, KuCoin or Binance, you can buy tokens with fiat money, exchange cryptocurrencies and sell them for local currencies. There are both decentralized exchanges that allow users to remain anonymous, as well as centralized ones that adhere to KYC practices. While the latter take away your anonymity, they offer a more secure environment for operating with digital assets.
- Brokerage platforms. Unlike crypto exchanges focused solely on tokens, brokerage platforms offer a much wider range of financial instruments including stocks and bonds. Good examples of brokerage platforms are Robinhood and J2TX.
- Mobile applications. To be precise, apps are not a separate option but just an additional feature to access cryptocurrencies. Most decentralized and centralized crypto exchanges as well as brokerage platforms have native apps allowing crypto enthusiasts to access tokens right on the go. Typically, apps have somewhat reduced functionality compared to their parent websites.
- Bitcoin ATMs. Another way to buy Bitcoin and altcoins for fiat money is to find a crypto ATM near you. However, BTC ATMs are not in high demand among serious crypto investors for several reasons. Firstly, ATMs charge too high a fee, which can be 10% of the transaction amount or even higher. Secondly, BTC ATMs impose rather strict limits on the maximum amount per transaction. Finally, bitcoin ATM networks are still underdeveloped, so finding the nearest kiosk can be difficult.
So, if you want to buy cryptocurrency, there are many different ways available to you today. As digital assets proliferate, the number of crypto exchanges and brokerage platforms is increasing. However, there are a few big players that have been in business for about as long as the crypto industry itself has existed. Below, we’ll talk about how to choose a really reliable place to buy crypto. For now, let’s take a look at a few things to consider for anyone looking to invest in tokens:
- Centralized exchanges provide their customers with a tool to store purchased tokens. Most often, these are cold wallets that do not communicate with the network on a regular basis. Since the majority of token thefts have occurred from hot wallets connected to the global network on a regular basis, cold counterparts are much more secure. However, if you are acquiring impressive amounts of digital assets, there is nothing better than your own personal cold wallet with robust security.
- Distribute your crypto savings between wallets of different types. So, if you’ve bought an impressive number of tokens to store your wealth, then transfer most of them to a cold wallet. Leave some in the hot wallet to conduct various transactions, such as trading crypto if you are a trader. By spreading your savings across multiple wallets, you will ensure that most of your crypto savings are safeguarded.
- Some crypto exchanges keep cash balances in bank accounts. This means that these funds are insured. If the tokens are lost or stolen, you stand a chance of getting reimbursed for some of your crypto savings stored in the exchange account. However, to benefit from this opportunity, you should choose a reliable brokerage platform or crypto exchange with years of experience in the market.
Keep in mind that while brokerage platforms and crypto exchanges commit not to disclose your personal and payment information to third parties, all data is stored on servers on the Internet. This means that the security of your data depends on several factors, including the complexity of the password and how it is stored. We recommend enabling two-factor authentication to secure both your personal data and your crypto savings.
How to Get into Crypto Space Safely – Thing to Consider When Picking Crypto Platform
There is no perfect place to buy Bitcoins and altcoins. However, you can find a good platform that meets high requirements. So, to find the best way to buy crypto, you need to consider a few important attributes. Firstly, make sure that you are dealing with a licensed broker to be certain that you will not be scammed. Secondly, check out the user reviews. People are used to seldom praising what they like, but they are more than willing to write negative reviews for web services that might have given them a bad experience. So, here are some important factors to consider when choosing the best way to buy crypto:
- Supported digital assets. While Bitcoin and Ethereum are cryptocurrencies listed on any exchange, there are many other promising tokens such as Litecoin, Binance Coin, Solana and others that could prove to be good investments. Familiarize yourself with popular and some of the rare cryptocurrencies and the projects behind them to choose the most promising option. Then make sure that the platform of your choice supports the coin you are interested in.
- Usability. There are exchanges and brokerage platforms with tricky navigation and lots of unnecessary interface elements that can confuse the novice. Give preference to a website or mobile app with functionality that you fully understand.
- Commission. This is one of the most important criteria to consider if you want to find the truly best way to buy crypto. The higher the fee, the more you will spend to pay for the services you receive. In terms of transaction fees, Bitcoin ATMs are probably the least profitable options. However, the fees can vary from platform to platform. Do some research to find a reliable platform with a simple user interface and support for multiple digital assets.
- Guides and tutorials. A really good broker or exchange strives to create a coherent ecosystem where members can access any information about the cryptocurrency world. Even if you already understand how Bitcoin and other tokens work, you always want to stay on top of the latest news and updates. So, a platform with a good information base is what you need.
- Customer service. As nothing is perfect in this world, crypto platforms are also prone to various failures. Therefore, before opening a profile on a particular website, check how responsive the support team is.
You may also get some kind of tempting offer as a new user. For example, newcomers to J2TX benefit from a commission-free first transaction. However, all sorts of bonuses and promotions are not the main things to consider when choosing the best way to buy crypto.
How to Buy Tokens at Crypto Platforms
Before you buy cryptocurrency, you need to consider the advantages and disadvantages of the digital assets described above. If you are willing to risk your money to invest in highly volatile assets, then start by choosing a good place to buy. Above we have listed all the important criteria to consider for choosing a good crypto platform. Although exchanges and brokerage platforms vary, the process of buying Bitcoin and altcoins is about the same for all of them. Here are a few steps you need to follow to access tokens:
- Open an account. If you choose a centralized exchange or brokerage platform, the registration process can take some time as you need to provide quite a lot of personal information and verify it. Most centralized crypto platforms adhere to KYC practices in order to combat cybercrime. Be prepared for the exchange staff to ask for digital copies of your identification documents like passport, driving license, ID or residency permit. In addition, you must confirm the payment tool you use (e.g. bank card).
- Make a deposit. Most websites and apps support several payment methods including bank cards and e-wallets. Find out about the fees of your payment service to choose the cheapest option. For example, credit card transfers can incur a fee of up to 5% of the transaction amount, so it’s not the best choice.
- Choose a coin to buy. There are usually several options available to you, such as “buy Bitcoin for USD”. Specify the option that suits you and confirm the payment to get the coins into your exchange account. Keep in mind that you can only buy a fraction of a Bitcoin instead of buying an expensive whole coin.
- Choose how you want to store your cryptocurrency. Many newcomers choose to keep the coins they buy in their exchange accounts. This can be a good choice if you are just starting out and have only purchased a souvenir amount of coins. However, experienced crypto investors always take care to choose a more secure place to store their tokens. To secure your crypto savings, think about a cold or even a hardware crypto wallet.
So, now you have all the knowledge you need to buy Bitcoin or other cryptocurrency and store it securely. However, is crypto a good investment? It is not an easy question to answer, because there are those who have made millions on crypto and those who have suffered serious losses. Since crypto is still a new asset, understanding the risks is difficult. It is not enough to look at how the price of crypto has changed historically to make predictions about its future value. Not being able to make long-term predictions is a serious obstacle to building a balanced portfolio that will provide good returns without exceeding your risk tolerance.
1. What is crypto?
It is the general name for a class of highly volatile digital assets that can also be used as money to pay for goods and services online. Cryptocurrencies operate in a decentralized environment called a blockchain. Bitcoin is the first cryptocurrency introduced to the public. Launched in 2009, it is still the leader in many criteria, including credibility and prevalence, as well as value and market capitalization.
2. Where can I buy crypto?
There are many ways to buy crypto. However, brokerage platforms and crypto exchanges are the most popular with crypto enthusiasts and investors, and for good reason. Firstly, crypto platforms create a safe and secure environment for operating with digital assets. Second, they charge relatively low transaction fees. Third, they offer many useful tools for working with digital assets.
3. Is it safe to buy cryptocurrency?
It is safe if you choose a really reliable way to buy. Check information about crypto platforms carefully, paying special attention to things like license information, supported coins and payment instruments, availability of mechanisms to protect the user and payment data, and quality of customer support.
4. What is a transaction fee for buying crypto?
Transaction fees are how brokerage platforms and exchanges make their living. Generally, large market players with extensive user bases can afford lower fees as they make good money from the high volume of transactions handled.
5. Are crypto transactions secure?
Anything man-made can be hacked by humans. However, if you compare transactions in the traditional banking system and those in blockchain, the latter are much safer and more secure. The only way to hack Bitcoin is to launch a 51 attack. However, given how expensive the coin is and how large the network has become, this is unlikely to be possible today.
6. How much money does it take to buy Bitcoin?
Today, you need to spend around $20,000 to buy one token. However, most crypto platforms will offer you to buy a fraction of a token for only a few dollars.