Getting Started With Cryptocurrency can feel much easier once you understand some of the basics. You don’t need to begin by investing a lot of money—or any money at all. The first step is learning how cryptocurrency is bought, received, stored and protected.
If you’ve already visited our Understanding Cryptocurrency page, you know that Bitcoin is one cryptocurrency, altcoins are other cryptocurrencies, and blockchain is the technology that helps make these digital systems possible.
Now you’re ready to see how people actually begin participating.
Before You Buy Anything.
There is no reason to rush.
Cryptocurrency prices can change quickly, and not every cryptocurrency, exchange or opportunity you encounter will be right for you. Starting with education gives you time to understand what you’re considering before putting money into it.
You can begin simply by learning how a cryptocurrency exchange works, what a wallet does, how crypto is bought and sold and what security precautions matter.
Then, if you decide you want some firsthand experience, you can decide how, and whether, you want to proceed.
Choosing a Cryptocurrency Exchange.
If you decide you want to buy cryptocurrency, one way to begin is through a cryptocurrency exchange.
Think of an exchange as an online marketplace where you can buy, sell and trade cryptocurrency. Different exchanges offer different cryptocurrencies, services and fees, so it’s worth learning about an exchange before opening an account.
Our Online Community has used Coinbase for years, which is one reason you’ll see it mentioned on this website. But don’t choose any cryptocurrency exchange simply because someone else uses it. Take time to look at its security practices, fees, available cryptocurrencies and current terms.
Because services and offers can change, you can find current information directly from Coinbase HERE.
Opening an Account.
Opening an account with a cryptocurrency exchange is somewhat like opening other types of online financial accounts. You’ll generally need to provide personal information and complete the identification steps required by the exchange.
Once your account is ready, you can learn how the exchange works before deciding whether you want to buy anything.
And here’s something I want to emphasize: You don’t have to start big.
If you decide to buy cryptocurrency, you don’t normally have to purchase one whole Bitcoin. Cryptocurrencies can be divided into much smaller amounts. That makes it possible to learn with a smaller amount rather than committing a large sum of money simply because you’re curious about how everything works.
How Do You Pay for Cryptocurrency?
Depending upon the exchange, there may be several ways to fund a purchase, such as connecting an eligible bank account or using another available payment method.
Before making a purchase, look at the fees and the final amount you’re actually receiving. Buying, selling and transferring cryptocurrency can involve costs, and those costs vary.
This is another reason I’m not putting specific fees or dollar amounts on this page. Check the exchange you choose for current information before beginning a transaction.
What Happened to Those “Free Crypto” Offers?
If you visited this page in the past, you may remember information about earning free cryptocurrency through educational programs.
Those programs changed.
For example, Coinbase previously offered “Learning Rewards” that provided eligible users with small amounts of cryptocurrency for completing educational activities. That particular program has ended, which is exactly why we don’t want to promise that an old offer is still available.
Other promotions or rewards may appear from time to time. If you’re interested in one, read the current requirements carefully before participating.
And never let the word FREE keep you from asking:
- What do I have to do?
- What information am I providing?
- Are there fees or conditions?
- Is this offer really coming from the company it claims to represent?
What About Staking?
As you explore cryptocurrency, you may encounter the word “staking”.
In simple terms, some blockchain networks allow eligible cryptocurrency to be put to work helping that network operate and verify activity. In return, you may receive additional cryptocurrency as a reward.
You still own the cryptocurrency you stake, but there may be restrictions or waiting periods before you can sell or transfer it. And while your crypto is staked, its value can still go up or down.
The cryptocurrency itself can change in value and/or eligibility, and rewards can vary. There can be additional risks or restrictions depending on how the staking service works.
For a beginner, the important thing isn’t learning every detail immediately.
It’s knowing that when you see “staking rewards,” you shouldn’t automatically translate that into “interest paid to you.”
Where Does Your Blockchain Wallet Come In?
Buying cryptocurrency and understanding how it is stored and accessed are two different parts of getting started.
That’s where your Blockchain Wallet comes into the picture.
Remember our blue door? We’ve devoted an entire page to explaining what a blockchain wallet is, how it works and why protecting your access information matters.
Learn more about Blockchain Wallets by clicking on the doormat in the picture!
Protect Yourself Before You Begin.
Cryptocurrency can be interesting to explore, but it also comes with real risks.
Prices can rise and fall dramatically. Scams can look convincing. A company holding crypto assets can experience financial or security problems. And cryptocurrency accounts don’t necessarily have the same protections you may associate with traditional bank or brokerage accounts.
Current SEC investor guidance cautions people to research the companies they use to hold cryptocurrency and to carefully protect the private information that provides access to their crypto. To read more about guidelines from Securities and Exchange Commission by clicking HERE.
Use strong passwords and multi-factor authentication when available. Never give anyone your private key or recovery information. Be suspicious of guaranteed returns and pressure to send cryptocurrency immediately.
Most importantly, don’t let excitement replace understanding.
Getting Started With Cryptocurrency Begins With Learning.
Getting Started With Cryptocurrency doesn’t mean you have to rush out and buy something today.
You can start by:
- Understanding what cryptocurrency is.
- Learning how an exchange works.
- Understanding what a wallet does.
- Looking at the risks.
- Asking questions.
- Deciding whether participating makes sense for you.
- If you do decide to begin, starting at a level you’re comfortable with and continue learning as you go.
- Never investing more than you can afford to lose.
The cryptocurrency world can change quickly.
Your best first investment may simply be the time you spend understanding it.