Finally - you're ready to buy crypto currencies!
We have done out best to scare, warn, and educate you. If you're still reading - buying crypto currencies is not so bad or difficult. We don't think it's any risker than most investments and not as difficult as buying a house. We just want to prepare you for the worst. We do want you to be careful. We do want you to be knowledgeable and informed before you buy crypto currencies.
In other sections of our website we do talk about buying Bitcoin without any ID or security. You can do this - but we do not recommend it. It's like walking around town with $1,000 in your pocket and everyone knows you're loaded because you're buying and selling. You become a HUGE target.
It is not illegal to buy and sell cryptocurrencies locally without an ID. It is illegal to buy and sell illegal things and to not pay taxes on your capital gains. We do not recommend doing anything illegal. We do not recommend first time buyers buy locally. We will cover buying locally in later tutorials.
There are multiple crypto exchanges out there. Later on we will recommend several other exchanges. We chose Coinbase for your first investment because they are:
- Considered the easiest to use
- Accept credit cards, debit cards, online bank transfer (like checks but take 5 days to process), and wire transfers (for larger sums)
- Store your crypto currencies online so you do not need a wallet
- Buy and sell (as of December 2017) Bitcoin, Bitcoin Cash, Ethereum, and Litecoin.
Buying your first crypto currency
Note the steps might be slightly different than this - but this is the general flow of what you should expect.
- Click on this link to go to Coinbase. Full disclosure - if you click on this link we both get $10 from Coinbase if you buy $100 or more of cryptocurrency. We appreciate it - it helps pay for this website.
- Create an account by entering your first and last name, email, password, and state.
- Make sure you write down your email and password and store it in a safe place (hopefully a fire and water proof safe).
- Coinbase sends you an email that you click on to verify you entered your email correctly and can receive email.
- At this point you sometimes have to verify your identity by uploading a picture or scan of your driver's license or passport.
- You enter your credit or debit card information. Coinbase does two small pre authorizations to your credit or debit card for one dollar and some random cents. You go to your bank account to see what the preauthorization charges are. On the Coinbase website, you enter the cents for each transaction to make sure Coinbase is charging the correct credit/debit card. These pre authorizations do not charge your card - they fall off in a couple of days. For example, you go to your bank website and sign into your online back account. You see two new authorizations for $1.34 and $1.81. You would go back to the Coinbase website and enter 34 and 81. Of course your numbers will be different.
- You select which crypto currency you want to buy (Bitcoin, Bitcoin Cash, Ethereum, or Litecoin) and how much - subject to the limits Coinbase imposes. Typically you can buy up to $200 or $250 when you first create an account. We suggest you buy equal amounts of Bitcoin, Ethereum, and Litecoin. So if you are going to buy $150 of cryptocurrency - buy $50 of each three. OR buy $150 of Bitcoin now. Then next week or month when you want to buy $150 more - then buy Ethereum. Third time you buy - buy Litecoin.
- You click the buy button. If Coinbase can charge your credit/debit card it usually takes a few minutes for Coinbase to verify your purchase. They will send you an email on the status (could they charge your credit card - or they could they not charge your credit card).
- Your Coinbase account will show how much of each cryptocurrency you have along with the current price of the coin and your total value.
- Note there are some credit card fees and some fees charged to process your cryptocurrency. These are typically small. The point is - if you buy $1,000 worth of Bitcoin - the value of your account may start out at like $975. Don't worry - you should recover these fees (and more) your first month or two.
- Congratulations! You are now the proud owner of crypto currency!