It’s not something you can go to the store and buy or something that you can get shipped to you. So, how do you buy bitcoin and other cryptocurrencies? The answer isn’t remotely as difficult to understand as some might think…
- Digital assets
- Bought, sold, and used on the blockchain
- Not controlled by banks or by a government.
This can seem a little confusing, so let’s relate it to things you know…
Many recognize that they must go to a broker to trade stocks. They can select which stocks to buy from the broker’s website, and then that stock information is stored on their broker’s website.
Cryptocurrencies are traded on exchanges, just like stocks. And, just like stocks, you need to go to certain exchanges to buy certain cryptocurrencies.
Let’s look at an exchange example…
The word “exchange” is not a new term. A typical exchange is where securities change hands — from stocks, to options, to bonds. Cryptocurrencies utilize exchanges too!
On the crypto exchange, you’ll see lists of currencies, graphs, and buy and sell logs.
Take a look at the example exchange below.
As you can see, it functions just the same as a securities exchange, allowing you to buy and sell cryptocurrencies for both USD and bitcoin.
There are also quite a few exchanges for cryptocurrencies, nearly all of which support at least the main three crypto: Bitcoin, Litecoin, and Ether.
Other cryptocurrencies require further research since they can only be purchased from certain exchanges and can only be stored in certain wallets.
The Wallet and the Exchange
You can’t store a cryptocurrency in your purse or back pocket. You utilize wallets as a means to keep your cryptocurrencies stored and safe when you aren’t using them.
You can buy and sell cryptos by linking your wallet to the exchange. This link is created by using your wallet’s public key. You can learn more about how your keys work with exchanges by going here.
Keep in Mind:
- You don’t have to buy a whole bitcoin. It’s possible to buy a half of a bitcoin, a quarter of a bitcoin or even a fraction of a percent of a bitcoin.
- There are some exchange platforms beginning to host their own wallet services, whereas others like Coinbase are being built around becoming an all-in-one platform.
- Properly researching your options for both which exchanges and which wallets you want to use is crucial to your success as a crypto-investor.