"Where, how, and what cryptocurrency to buy?" is the question you are most likely asking yourself right now as more and more people talk about Bitcoin and its value rises. You want to «eat your piece of the crypto pie» but have no idea where to start?
In this article, you’ll learn how to buy Bitcoin, Ripple, Ethereum, Nem, or any other cryptocurrency for that matter, as quickly and economically as possible.
Before you start buying cryptocurrency, you need to learn when and how it came into being and what kind of future is ahead of it.
The starting point of all cryptocurrencies is believed to be January 9, 2009. On that day, someone named Satoshi Nakamoto launched Bitcoin 0.1. In December 2009, ver. 0.2 came out, and in the summer of 2010—ver. 0.3. In the end of 2010, Satoshi released ver. 0.3.9 and left the project for good, but it continued to grow with the help of avid crypto enthusiasts.
Not every single idea could be implemented in the Bitcoin project, which was the reason why people started leaving—to create their own, their own cryptocurrencies. This is when the crypto industry started to grow exponentially.
Differences in opinions lead to the emergence of new projects
Cryptocurrency is gradually becoming a part of people’s everyday lives across the globe: in 2017, Bitcoins are accepted as a payment method in some stores, restaurants and cafés, “the new money” is a hot topic on radio, tv, and in newspapers. The price of one coin is headed for 3,000 USD, although in the very beginning, 1 cent could buy 10,000 bitcoins.
BTC/USD rate all-time chart
One fact needs to be mentioned: there are 750 cryptocurrencies in the world right now. This many have sprung up in just 8 years!
It is impossible to pinpoint what the future holds for this innovative money, but most people will surely say that «cryptocurrency is the currency of the future». But it is not that simple. Not all of the 750 existing cryptocoins will make it, and the values of those who do, can both suddenly skyrocket or plummet. On the flipside, there are no indicators pointing to an imminent fall of cryptocurrencies. Such well-established cryptocoins as Bitcoin, Litecoin, Dogecoin, Ethereum, Ripple, are only rising in price, and that makes them really attractive from an investment standpoint.
When we hear the word «cryptocurrency», Bitcoin comes to mind immediately. This is why we will use Bitcoin as an example to describe the way all cryptocurrencies work.
A bitcoin wallet is a special application that is installed on a computer or a smartphone. The wallet generates bitcoin addresses, that transactions are sent to and from. It has a publicly displayed name and a secret key. Users can create an unlimited number of bitcoin wallets. In this instance, Bitcoin is like E-mail.
The heart of Bitcoin is in its blockchain. The blockchain is a chain of blocks and a public collective registry where all confirmed bitcoin transactions in the world are registered and where all user balance information is stored. Cryptography enforces the integrity and chronological order of the blockchain.
A single instance of transferring funds from one wallet to another is called a transaction, and every single transaction is publicly visible in the blockchain. During the processing of a transaction, a secret key gets involved—it acts on behalf of the wallet’s owner. The key provides mathematical proof of the transaction’s authenticity and prevents manipulations after the transaction is sent into the network.
Chain of blocks
In order to confirm transactions and embed them into the blockchain, the process of mining is employed. The process assures transactions’ chronology within the chain as well as the network’s neutrality, it brings thousands of computers into harmony. Transactions are confirmed after their inclusion into a block and a network check. Mining eliminates the possibility of alterations of previous blocks and basic addition of blocks driven by anyone. As the result, nobody can manipulate the blockchain in their interests. Mining participants get some amount of cryptocurrency as a reward.
There are 3 main ways of buying cryptocurrency (not including such extraordinary ones as bitcoin ATMs or payment terminals).
You can buy cryptocurrency by using the good ol’ natural economy practices—find someone who’s selling bitcoins, litecoins, etc. on the internet, it is not difficult in today’s world. The easiest route is to register an account on an appropriate forum, e.g. Bitcoin Talk, and express your willingness to buy cryptocurrency.
The drawback of this method is security. Entrusting an internet stranger with your money is risky, for this reason there are guarantors on such forums. They make sure that both parties get what they expect. But of course, a guarantor will help for a fee.
Buying cryptocurrency on a forum
A cryptocurrency exchange will suit those who like stock trading and understand the entire process. You open an account with an exchange and replenish it, then create an order to buy/sell a certain amount of cryptocurrency at a certain price. In such a case, the cryptocurrency exchange rate would be the negotiated price. An account on an exchange can be topped up with special codes, for example BTC-e Codes.
The drawbacks of exchanges are sporadic withdrawal delays, technical glitches, inability to access accounts, and cyber attacks.