How to Buy Altcoins
If you are just starting out, this post will guide you through the necessary steps to take to buy your first altcoins free from frustrations.
While skeptics believe Bitcoin will crash and lose its value, some believe that its current price is set to go up further. According to Max Keiser, a seasoned believer in Bitcoin and a host for Russia Today, Bitcoin will continue to defy critics “all the way to $100,000 and beyond.”
He is not the only one who is bullish on Bitcoin. Others like John McAfee and James Altucher also believe that Bitcoin is set to increase in value in the near future.
But if you are looking for cryptocurrencies that will give you the best return, altcoins are your best option. Altcoins are basically any cryptocurrency apart from Bitcoin.
Even though most of them credit their popularity to Bitcoin, some of them have given investors huge returns more than what Bitcoin could provide.
One particular altcoin that has had the biggest growth over the course of 2017 is NXT with an ROI of 1,265,555 percent.
How to buy altcoins
Do you already own some Bitcoin?
Well, the same way you buy Bitcoin from an exchange is the same way you go to an exchange to get your altcoins.
Top exchanges like Coinbase only support a selected number of coins, however; there are numerous exchange platforms that support a variety of altcoins.
You will find the full list of cryptocurrency exchanges below.
While some exchanges allow you to buy altcoins with fiat currency directly from your credit card, others only allow you to purchase with Bitcoin or other altcoins.
Therefore, you need to first buy some Bitcoin with fiat currency and then use your Bitcoins to buy the altcoin.
Alternatively, you can use peer-to-peer exchanges and marketplaces like LocalBitcoins to contact individuals and make a transaction.
Introduction to cryptocurrency exchanges
A cryptocurrency exchange is an online platform that allows you to buy or sell cryptocurrencies like Bitcoin, Ethereum and Litecoin either with USD, GBP or EURO.
With some exchanges, you can also use other cryptocurrencies to buy cryptocurrencies. One of the most commonly used cryptocurrency to buy an altcoin with is Bitcoin (BTC).
There are a few types of cryptocurrency exchange and they include:
- Crypto brokerage – with this type of exchange, the company acts like the middleman that fixes the price for the buyers. It operates more like a forex brokerage service or a bureau de change at the airport.
- Contract for Difference Exchange – this one lets you buy or sell cryptocurrencies without actually owning the coins. It is a service designed to be more like the daily trading on Wall Street. The advantage is that you can sell and buy in the shortest time possible thus enabling you to make the most profit on a trade.
- Trading platform – with this type of an exchange, you can buy and sell cryptocurrencies but only from the platform and there is no interaction with other platform users. The exchange, in this case, charges a fee for every trade.
- Peer-to-Peer marketplace – this one is the opposite of the trading platform such that it allows you to interact with other platform users while connecting you to buyers and sellers on the platform. With such an exchange, anyone can set their own price or advertise to get customers.
Buy your first altcoins – step by step guide
There are a couple of steps with every exchange that need to be fulfilled in order to get your hands on some altcoins.
The steps are different and unique to every exchange and some will include additional steps.
Step 1: Register
Registration with most exchanges is easy. Most exchanges only require you to use an email address and you are good to go.
After registration with your email account, you will have to go back to your inbox and confirm your registration.
Some exchanges such as Coinbase come with a variety of account options with different features.
This is the stage where you get to pick the account you want from the exchange.
Step 2: Account verification
Once your account is registered you will need to go through a verification process.
Over the years, the verification process has become a necessity as a result of the Know Your Customer policies (KYC) being implemented.
Therefore, you will need your Identification card, your passport or your driving license.
While some exchanges require you to use just one of these verification documents, some might request that you have all of them or a combination of either of them.
In fact, some exchanges will require additional verification documents such as a utility bill and a selfie of you holding up the passport just to verify your identity.
Furthermore, you will also be prompted to secure your account with a 2-factor authentication.
This is an additional verification apart from your account’s password that enables the exchange to confirm that only you can access the account.
Even though some verification processes might sound foreign, they are actually standard procedures that everyone has to go through. Verification might take a couple of days to be complete.
Step 3: Deposit
Once your account has been verified, you will get confirmation to start depositing funds into your account so as to buy altcoins.
This step depends on the features the exchange has to offer.
Some exchanges like Coinbase allow you to buy cryptocurrency with a credit card while others like Binance only let you buy cryptocurrencies with other cryptocurrencies.
If the exchange platform allows you to use your credit card, you will also have to confirm with your bank to know whether the bank allows for cryptocurrency purchases.
On some exchanges, you can easily pay for your altcoin purchases with PayPal, Stripe or other online payment options.
Make sure you check the FAQ section of the exchange you pick to know what payment options are allowed on the exchange.
Step 4: Buy your first alctoin
Now that your account is loaded, you are only a few steps away from getting your altcoins.
Simply head over to the dashboard of your account and select the altcoin of your choice.
Since prices are always fluctuating, you will need to pay attention to the latest price.
On exchanges such as Binance, you can set a buying price so that when the price goes down to the value you set, the exchange platform automatically sets a buy order.
This is a great feature to have on an exchange especially if you are a trader.
You don’t have to sit and wait for the price to fall, just set the limit and let the exchange do the rest of the work. On peer to peer marketplaces, you can bargain on the price of the altcoin or set up a meeting with the seller.
Step 5: Convert fiat to BTC
When there is no direct fiat payment method on the exchange, you can convert your fiat currency to Bitcoin and use the BTC to buy altcoins.
Simply head over to an exchange that allows the buying of Bitcoin with fiat and once you have your BTC, send them over to the wallet on the exchange with altcoins.
The advantage is that even though there are only a few exchanges that offer all altcoins, nearly all exchanges allow buying and selling with Bitcoin.
Step 6: Convert BTC to altcoins
With your Bitcoin in your wallet, exchanging them for any particular altcoins is easy.
In fact, most exchanges price their altcoins in terms of BTC and as the price of Bitcoin fluctuates, so does the price of the altcoin.
You can easily calculate the number of altcoins you want as some exchanges come with a calculator that is easy to use.
Step 7: Buy altcoins straight for fiat
However, these exchanges only have a few altcoins supported on their platform.
For example, out the thousands of altcoins that exist, Coinmama only supports Ethereum, Cardano, Ripple, Qtum, Ethereum Classic, Bitcoin Cash, and Litecoin.
Coinbase has even fewer altcoins supported only including Bitcoin Cash, Ethereum, Ethereum Classic, and Litecoin.
Be sure to do some research and know what some of the top exchanges offer in terms of altcoins.
A good place to start is on CoinMarketCap.com.
There you will be able to trace the exchanges where a particular altcoin is supported.
List of cryptocurrency exchanges
Here’s a list that entails the most popular crypto exchanges available as of today:
Alternative ways of buying altcoins
Did you know you could use your credit card or even Paypal to buy some coins?
If not, here’s how you do it.
On some exchanged you can easily buy altcoins with a credit or debit card.
In fact, some exchanges allow you to spend Bitcoin or altcoins from your credit or debit card which is amazing.
You can also withdraw your altcoins in fiat currency on any Visa and MasterCard ATM with some of the cards that come with crypto exchanges.
Even before Bitcoin came about, PayPal was the closest you would come to virtual money.
Now that Bitcoin is here, PayPal still provides an easy way of buying Bitcoins and altcoins with virtual fiat currency and the best place to use PayPal is Local Bitcoins.
Just keep in mind that every PayPal transaction could be reversed, so if you’re selling your coins and accept a payment from PayPal, you expose yourself to additional risk.
Bonus: How to buy Bitcoin in the UK (First-time buyers)
If you reside within the UK and you have never bought any coins before, here’s a simple guide for you.
Read here: Buy Bitcoin in the UK Guide
Buying altcoins for the first time can be a bit daunting but it doesn’t have to be.
The crypto exchanges that are mentioned in this guide are some of the most popular platforms that offer you a variety of features.
There are also other exchanges and don’t hesitate to look them up. Most of them work the same with minor differences, so once you get the ropes of using one, you will be comfortable anywhere.
Therefore, go ahead and try out some of these exchanges and see what they offer.
Remember to never leave your altcoins on an exchange wallet.
It is always a good idea to get a hardware wallet to keep your altcoins safe (such as Ledger Nano S).
Good luck and shout me with any questions you might have!
BCH – qrr63e483sl5c0rzqjf8pnds26pegex0h52gc6tndx
ETH – 0x2F678cF4A0bc4B2D6F4e22A3A1bfC4BA746BDDBe
BTC – 3DsiPb26ugH4N7urkq6P3T9meSp2NMNqan
LTC – MU4iw9ydysAu9egDsp6gmiQ45DX6ujYBqQ
Disclaimer: You should do your own due diligence, research and analysis before you invest any money in cryptocurrencies. Cryptocurrencies are highly volatile and classed as high-risk investments. You should never invest any money unless you’re prepared to lose your capital. The author of this article holds the said assets and might be biased towards them.