How can you buy Bitcoin, and where can you store the cryptocurrency you buy are two questions that can intimidate people as it sounds very technical, but actually doing so can be as easy as installing an app on your phone. Although a lot of the early backing for cryptocurrency came from programmers and developers, today it's reached a stage where just about everyone is thinking about it as an investment — and in such a scenario, there are just a few basic things that you need to know about how the technology works, so that you can safely and securely invest in it. Whether you're looking to invest in Bitcoin, Ether, Dogecoin or other coins, the things that you need to know won't really change.
Here's how you can buy cryptocurrency, and how you can store your tokens.
How do I buy cryptocurrency?
A crypto exchange is a platform that brings buyers and sellers together in order to trade cryptocurrency. Most exchanges support multiple currencies ranging from highly popular ones in the crypto community that you may not already know about, like Cardano, Ripple, and Tether, to Bitcoin, the oldest, best known, and most valuable cryptocurrency.
There are a number of crypto exchanges operating in India at this point, and we would recommend that before using an exchange, you look it up to see if it has been in the news for the right reasons and not bad ones. Stick to well-known and reputed exchanges, make sure that they have an office in India, and that the founding team is made up of people with a history that is reputable.
According to a report, exchanges lose $2.7 million (over Rs. 20 crore) every day on average, and so you want to make sure that you're investing using a trustworthy one.
There are other ways to buy and sell crypto too. You can trade in crypto directly with other sellers, but an exchange provides security, and helps find a stable price so that it is easier to make your trades, making this the best option for people that are new to crypto.
Using an exchange
All the major exchanges follow the same process. You will need to create an account, and then Indian exchanges ask for KYC verification. This is done to prevent fraud, and you will have to submit a proof of identity. The process is usually quite quick, and then you can start trading by depositing money in the exchange.
You can do that by linking your bank account to the crypto account, or via a debit/ credit card or netbanking. Once your exchange has finished its process, it will notify you to place the first order.
Enter the symbol of the cryptocurrency you want to purchase (for example, it is BTC for Bitcoin; ETH for Ethereum; and DOGE for Dogecoin) and the value you want to purchase.
How do I store my cryptocurrency?
As we already explained, buying the cryptocurrency is just the first step of the process. Yes, you could leave the crypto in the exchange — and if you're trading at high frequency, then this might be the best bet. But if you look at any chart of crypto prices over time, you can see the price of Bitcoin, or the value of Ether in INR have held their value in the long run, despite high volatility in smaller periods.
This means that you need to keep your coins stored in a crypto wallet in order to store them safely for a longer period. As we explained in an earlier guide, there are three types of wallets — Hot, Cold, and Paper, and you have to choose how to store your coins based on how you're planning to use them.
Read the other article to learn everything about wallets, how to choose between them, and then you are ready to get started.
Interested in cryptocurrency? We discuss all things crypto with WazirX CEO Nischal Shetty and WeekendInvesting founder Alok Jain on Orbital, the Gadgets 360 podcast. Orbital is available on Apple Podcasts, Google Podcasts, Spotify, Amazon Music and wherever you get your podcasts.