So now that we know what cryptocurrency is and what makes it valuable, let’s talk about how you can invest and buy cryptocurrency.
First, you have to choose a cryptocurrency exchange. A cryptocurrency exchange is a platform where you can buy, sell, and trade cryptocurrency. There are plenty of exchanges out there, so it’s important to spend time researching all the exchanges before making your decision. Some exchanges have fees, others rank higher in security, and some are for beginners. So, choose the one that works best for your investment needs.
Wu recommends sticking with reputable exchanges like Coinbase and Binance.US.
“Don't go to the unknown ones, you know. It doesn't matter what they say to you. They might give you bonuses for you to trade, they might, you know, have a bunch of promotional campaigns. Don't do that because they could easily take your money away,” said Wu.
After you pick a crypto exchange, the process is very similar to the stock market. Create an account with that exchange and fund your account with fiat money. Fiat, meaning a government-issued currency, like the U.S. dollar.
After you’ve funded your account, decide which crypto you want to buy. Coinmarket.com displays a plethora of cryptocurrencies to choose from including Bitcoin, Ethereum, and Dogecoin.
Once you’ve done that, place a buy order for your crypto and store your crypto in a digital wallet, which keeps your private keys and cryptocurrency safe.
Your private key is like a password. According to Coinbase, it’s a string of letters and number that allows you to access and manage your cryptocurrency.
Traditional stock investment apps like Robinhood, PayPal and Cashapp, have also added crypto trading for its users. Even Coinstar allows you to buy Bitcoin.
Bidisha Chakrabarty, Ph.D., said if you’ve ever used Apple Pay or Venmo, you’d be familiar with how this process works.
“Then you could just use that digital wallet. From that wallet you can use whichever cryptocurrency you bought to make payments to other entities who will accept that cryptocurrency. Now, everyone does not accept every cryptocurrency unlike say, dollars. Everyone accepts dollars as a payment in this country, but cryptocurrencies are not that way,” said Chakrabarty.