The world of cryptocurrency is full of exciting opportunities and potential rewards. Buying and trading crypto can be a thrilling and rewarding experience, and with the right knowledge and approach, anyone can get involved. If you’re ready to take the leap and join the world of cryptocurrency, read on to discover everything you need to know to get started with your first crypto purchase.
Without further ado, let’s get started.
Buying cryptocurrencies – now and then.
When we first got interested in Bitcoin in 2013, buying crypto wasn’t that easy. The industry was still in its infancy, and few trustworthy platforms existed to buy Bitcoin, practically the only crypto you could buy at that time.
Luckily, things have gotten much better over the years, and there are now lots of reputable and often regulated platforms where millions of people buy and sell crypto daily.
In most countries, it is possible to buy crypto in one of three ways:
- Through a mobile wallet
- Via a centralized cryptocurrency exchange platform
- From a local seller or exchange counter
Where not to buy crypto
Some popular finance apps, such as PayPal, Robinhood, and Revolut, provide access to the cryptocurrency markets. It is important to know that when you ‘buy’ crypto via these apps, it doesn’t truly belong to you and that it is managed by the company. You cannot move the funds out of the app or use it for payments. It is similar to buying gold shares, where you can sell them when the gold price increases, but you don’t own the gold. For this reason, we don’t recommend buying crypto through these companies.
Buying crypto through a wallet
Buying crypto through a wallet is the easiest way to get started for newcomers for three reasons:
- It doesn’t require ID verification, and when it does, the process is usually pretty quick.
- You can pay with your credit card and, with some apps, make a wire transfer.
- It’s quick – the crypto will be deposited directly into your wallet.
Setting up the ZenGo wallet
Many wallet apps offer the option to buy crypto, and in this guide, we will explain to you how you can use ZenGo to buy Bitcoin. Some steps below are only required the first time when you set everything up.
- Go to the Apple App Store or Google Play Store and download the ZenGo app.
- When you open the app for the first time, enter your email address. Verify the address by clicking the link in the email ZenGo will send you.
- Complete the biometric face mapping process, a securely encrypted representation of your unique facial features. This is a security measure ZenGo uses to ensure only you have access to your account and private key.
- ZenGo will now ask you for permission to store a secure backup file on your phone and your cloud storage account, like Google Drive or iCloud. This ensures you always have access to your account backup and allows you to recover the accounts if your phone is ever lost or stolen. Neither Google nor Apple can access your private keys as these backups are encrypted.
Great job! If you followed the steps, you’ve now successfully set up your ZenGo wallet app. The best thing: you don’t have to remember or store any private keys!
Buying crypto with ZenGo
- Now it is time to buy some crypto. At the bottom of the ZenGo home screen, tap the ‘Actions’ button, followed by ‘Buy.’
- You will now be presented with a long list of all cryptocurrencies you can buy through ZenGo. At the top of the list, you will find Bitcoin and Ethereum. We suggest starting with one of those as they are the most popular and in-demand cryptocurrencies. Tap on either one.
- A new screen will pop up, which will connect you with one of ZenGo’s purchasing partners. Most wallets work with purchasing partners, who have access to a wide range of cryptocurrencies and ensure speedy and safe crypto purchases.
- Choose the amount of crypto you want to buy and select a preferred payment method. If you haven’t purchased with ZenGo before, you’ll be asked to provide additional personal information and may be asked to verify your identity.
- Simply click ‘Buy,’ and that’s it – you’ve now bought your first crypto!
In a little while, your crypto will be sent to your ZenGo wallet, and you’ll see the updated balances on the home screen of the ZenGo app. Now that you have your first cryptocurrency, you can use it to pay for things, trade it for other cryptocurrencies, sell it and have the money sent back to your bank account, or even earn interest on it by participating in staking.
Buying crypto on an exchange
Now that you know how to buy cryptocurrency through a wallet, it is time to explain how you can buy crypto on an exchange.
A centralized crypto exchange is a service that operates an order book and that allows people to engage in all sorts of trading activities. If you have ever bought stocks using an online brokerage account, crypto exchanges will look and feel quite similar.
There are several reasons why people may want to use an exchange rather than buying crypto as described earlier in this guide.
- It is possible to buy larger amounts of crypto via exchanges.
- Exchanges offer more cryptocurrency options and may have dozens or even hundreds of available cryptocurrencies listed.
- Exchanges offer a much broader range of services for those interested in trading.
- Exchanges often charge lower fees compared to instances that allow people to buy crypto with credit cards. However, withdrawing your crypto can incur some high fees.
Verifying your ID at cryptocurrency exchanges
In most countries, cryptocurrency exchanges require users to sign up and verify their identity by providing lots of documents before getting started. This ID verification is called KYC, which stands for ‘’Know Your Customer’’, and it comes from the legal requirements placed on banks and other financial institutions to report any suspicious activity to authorities, whether it’s related to money laundering or terrorism.
The good thing is, at most crypto exchanges, this process is pretty simple, and it just requires you to take pictures of your identity documents with your smartphone. Most crypto exchanges are pretty quick when it comes to verifying accounts and do this on the same day.
Once your account is verified, you’ll need to find it by initiating a bank transfer. This means logging into your bank account, entering all the account information provided by the cryptocurrency exchange, and then sending the money you want to trade or invest with.
Depending on your bank and country of residency, this may take a few days. There could be several hurdles at this point. For instance, you may receive a call from your bank asking you to confirm your withdrawal request or why you’re sending money to a cryptocurrency exchange.
Although this may surprise you, your bank could flat-out refuse you to send or receive funds from a known crypto exchange.
Custody in crypto
In the worst case, although this is unlikely, your bank could decide they no longer want to work with you and close your account. After all, it depends on the local regulations and your bank’s policies regarding crypto. For this reason, we recommend researching your bank’s policies before initiating a transfer to a crypto exchange.
If all goes well and your funding goes through, your crypto exchange account will show your balance in your local currency. Let’s say it’s $1,000. This is the amount you can then use to initiate trades with and buy any of the cryptos listed on that exchange. For example, you could place an order for $500 Bitcoin and $500 Ether.
Note that when you buy crypto on an exchange, it is in their custody. This means that although it is attributed to your account, you don’t have real ownership over the asset until you withdraw it and store it in a wallet.
Always remember that if you don’t control the keys, you don’t have final control over the crypto. If you want to buy crypto via an exchange, though, we recommend using Coinbase, Kraken, Bitstamp, or Binance.
Buying crypto locally
It is also possible to buy crypto through local sellers, ATMs, and exchange businesses. This is most prevalent in certain countries and economies where cash transactions are more common or where people seek to exchange their local currency for a more stable currency. Places like the United States and certain African and Southeast Asian countries will have more options for buying and selling crypto locally.
There are also so-called peer-to-peer marketplaces where people come together to buy and sell crypto directly from person to person. Some local currency exchange businesses offer crypto buying and selling services as well. These services are great because being able to buy with cash means there’s little friction, and the process is straightforward. However, always make sure you compare prices and get a competitive rate.
Crypto ATMs are the same as regular ATMs but hand out crypto instead of cash. They are equipped with special scanners to read your documents and provide you with your preferred crypto almost instantaneously. On the flip side, these ATMs often charge hefty fees.
How to buy cryptocurrencies – conclusion
Whether you use a wallet, an exchange platform, or a local seller, to start your journey, you need to own crypto. It’s the best way to learn and become more comfortable managing these digital assets.
And remember, you don’t need to start a whole Bitcoin or Ether on day one – start with what is manageable for you. Anyway, we are really happy you’re one of us. And we hope that this marks the beginning of your crypto journey.
