How to Buy Crypto: A Guide
|— Buying your first crypto can be daunting, but really it’s just a step-by-step process|
— You can purchase crypto using your credit or debit card on exchanges and through APIs like Coinify on Ledger Live
— To get started, you need to choose an on-ramp, complete your KYC verification and decide which currency to buy
— And the last part? SECURITY! Here’s how to buy crypto.
So you’ve done the reading and you know the basics – now it’s time to get involved! Welcome to the first step on your crypto journey. Let’s chat about buying your first crypto.
At Ledger, we spend a lot of time talking about securing the crypto you already have. But what if you’re taking your very first steps?
Buying your first crypto can be emotional, confusing, and overwhelming. We get it! Crypto has a lot to offer, but it can be tricky to get started. So, in this guide, we’ll hold your hand and take you through the exact steps you’ll need to go through to buy your first crypto.
Here, we’ll tackle where to buy crypto, things you’ll need to get started, which crypto to buy, where you’ll receive it and of course, the best ways to keep your coins secure once you’ve bought them.
We know — that’s a lot! But you’re transitioning to an entirely different system from traditional banks, so a learning curve is to be expected, right?
So let’s remove the friction and get right into it – here’s how to buy your first crypto.
Step 1) Where to buy crypto
First things first: where should you even buy crypto? We’ve come a long way from when you had to post an ad on the Bitcointalk forum to find someone to sell you some BTC.
Fast forward to today: You can purchase crypto with various methods. However, today we’ll talk about the two easiest options: buying through a centralized exchange, and buying it directly through Ledger Live.
a) Buy Crypto Through an Exchange
The majority of people buying crypto for the first time use a centralized crypto exchange. Crypto exchanges are platforms that enable conversions between different types of crypto, but also from fiat currencies to cryptocurrencies. You can consider them similar to Forex markets, which facilitate conversions between currencies. The difference is: crypto exchanges allow you to purchase currencies that are blockchain-based, and not fiat.
The first thing you’ll need to do is make an account. Making an account is pretty straightforward across these exchanges. You can usually directly login via Google or any other social media like Telegram, Facebook, etc, or sign up via an email and password.
From there, depending on the regulations in your country – and the methods supported by the exchange you choose – you can normally purchase your crypto via credit or debit card. And yes, there’s a fee associated with this service — usually, about 0.1% – 0.2% of every transaction (this varies between platforms).
So things you need to consider when choosing an exchange are fees, regional restrictions, reputation, and payment methods.
b) Buy Crypto Through Ledger Live Using Moonpay
If you already own a Ledger hardware wallet, you have a second option: buying through our native app Ledger Live, using our partner Moonpay. Simply put, Moonpay is an application that enables you to purchase crypto with your credit card and have it sent straight to your Ledger hardware wallet. The benefit of doing this is that it’s not only simple, but you’ll also receive your first crypto straight to your very own wallet, with no other wallet or entity involved – don’t worry, we’ll come back to that in a minute.
For now what you need to know is that to buy your first coins and tokens, you can either go to an exchange or, if you already have a Ledger device, use an app on Ledger Live.
Step 2) What you’ll need to make your first purchase
So you’ve chosen where to buy your crypto, and you’re ready to swipe your card. All you have to do is click some buttons…. Right?
Well, not exactly.
No matter how you’re onboarding, you’ll need to complete something called a “KYC”. This is short for Know-Your-Customer, and is a verification process that’s part of a global commitment to prevent money laundering. KYC requires you to submit personal data and supporting documents, such as a passport, a photo and address proof to confirm your identity before you interact with a financial platform.
This is to make sure you don’t intend to do any shady business (*cough* money laundering *cough*), and keeps track of your entry point, allowing suspicious activities to be investigated, if necessary.
The process of getting verified by an exchange is not instant – it can take upto a couple of days, but it’s one-time only process you’ll not need to repeat again.
If you choose to go through an API like Moonpay, you’ll still need to go through verification, but the process may be a bit quicker (in some cases, just a few minutes).
No matter which path you choose, KYC is an unavoidable part of the process for anyone getting into crypto for the first time, so make sure you read the instructions provided by the platform and have the documents you need to hand when you set out.
Step 3) Which crypto can you buy?
OK now we’ve got the admin out of the way, let’s answer the most-asked question: which crypto can you buy?
There are now over 6000 different currencies to choose from in the crypto ecosystem, but if you’re purchasing with fiat, your choices are a bit more limited than that; usually, you’ll be able to purchase a handful of the most used cryptocurrencies such as ETH, BTC and stablecoins such as USDT.
However, once you make that transition to crypto, you’ll find that the exchange supports a ton of inter-crypto swaps. So say you want to buy into a lesser-known currency – simply purchase a “base currency” with your fiat such as USDT or BTC, then you can trade it for the crypto of your choice afterward.
The key takeaway? Check what your options are on your chosen platform before you start the purchase, and from there you can work out how to get what you want.
Step 4) Where do your coins go after buying?
Once you’ve gone through the admin and purchased your shiny new crypto tokens (metaphorically, of course), you’ll probably be wondering where you’ll actually receive them. The short answer is: it depends where you’re buying your crypto. Let’s have a quick summary of how it works before comparing your options.
Crypto Wallets: A Crash Course
Unlike a normal bank account, crypto wallets don’t actually store your crypto (it’s on the blockchain). Instead, they secure something called a private key – and this is the piece of data that ties you to the crypto you’ve bought and makes you the owner of it.
The private key gives you access to the address on the blockchain where the funds are stored, so having complete control of your funds means having complete control of that key. So what’s the issue with exchange wallets?
- Crypto Bought on an Exchange
Let’s focus on the crypto exchange option first. If you’re using an exchange platform, your crypto will automatically get credited to your personal crypto wallet within the platform – this was created when you created your profile earlier. Once your crypto is there, you can directly access it at any time by logging into your exchange account.
Sounds simple – and it is! But there’s an important point to be aware of if you’re using an exchange wallet – the crypto you’re keeping there isn’t truly yours.
When you use an exchange wallet, you don’t control the private key – the exchange does. The advantage of using this wallet for the long term is simplicity: all you need to remember are your login details, and if you forget those, you can simply contact the exchange and get some new ones. Easy peasy!
But there’s also an obvious drawback too: the exchange is meanwhile holding the private keys for your crypto assets, meaning you’re trusting the platform to give you access to your funds, and keep them safe.
As the gatekeeper to your wallet, the exchange can easily set maximum withdrawal limits or restrict withdrawals altogether. Plus, if the platform is hacked your funds are in jeopardy. Not your keys, not your coins – keeping this golden rule in mind as you navigate your way through crypto is a pretty reliable mantra for maintaining control of your assets.
- Crypto Bought on Ledger Live
This brings us to the other option: buying your crypto through Ledger Live in conjunction with your Ledger hardware wallet. One of the major advantages of buying coins and tokens directly through Ledger Live is that you will never – we mean NEVER – need to use a third-party wallet.
Instead, your newly acquired crypto will be sent directly to an account on your Ledger Nano where – you guessed it – you are in complete control of the private keys from the get-go
Step 5) How to keep your new crypto secure
No matter which option you’ve gone with, you may be wondering at this point how to close the loop as a new crypto owner, and secure your assets responsibly for the long haul. So let’s look a bit more closely at why you need a wallet and what to look for.
How to Choose a Crypto Wallet
There are a number of different crypto wallets available to you that will enable you to control your own private keys – you have both software wallets and hardware wallets to choose from. But the question of security extends beyond simply controlling the keys yourself; it’s also about how you store them.
Crypto faces different threats from fiat money – specifically, digital hacks. Any type of wallet that is connected to the internet can potentially be accessed remotely by a clever hacker – pretty scary, we know. So while it’s possible to use a digital crypto wallet that puts you in charge of the private key, using this set up still won’t keep your funds airtight from hackers.
Can you imagine going off to work and leaving your front door unlocked? Using a digital wallet to secure your crypto keys should give you that same uneasy feeling.
The only way to completely secure crypto is to opt for offline “cold” storage — a device that stores your keys without ever being connected to the threats of the internet. While the initial set-up requires a bit more time than a digital wallet, hardware wallets, such as Ledger Nano, are the best way to secure your coins, period. They not only give you control and ownership but also keeps your private keys offline and out of reach from digital hacks – this peace of mind is especially important as you focus on understanding this new system and how it all works.
If you made your first crypto purchase on Ledger Live using Moonpay, good news – your crypto already went straight to your hardware device! The keys are YOURS and are also completely secure within the device, even as you interact with your funds later on (here’s how that works by the way).
If you used an exchange, and you’re looking to move your assets from the exchange wallet to the security of a hardware wallet (bravo, by the way, you just made a great decision) here’s how you do that in minutes.
Congratulations! If you’ve made it this far, you just bought your first crypto and learned how to secure it responsibly – welcome to crypto!
So there you have it – buying crypto wasn’t that difficult, right? Even if you can’t differentiate your Ethereum from Solana right now, don’t worry because we all started there. Crypto might take some time to wrap your head around, but trust us, it’s worth it – and we haven’t even talked about the best bits yet.
Now that you’ve got your first assets on the blockchain, and you understand the basics of keeping them secure, your next step should be understanding a bit more deeply how the nuts and bolts work. And for that – Ledger Academy is the only place to be. See you soon!