Cryptocurrencies are currently experiencing a bit of a slump in popularity compared to 2021, but there are still millions of transactions that happen each day! For many, the cooling market signals the perfect time to hop into the turbulent waters. Still, buying crypto isn’t always the easiest, especially ones that aren’t listed on central exchanges. Today, we are going to learn how to buy cryptocurrencies, even ones that Robinhood or Coinbase isn’t offering! Let’s get started.
What are Cryptocurrencies?
Cryptocurrencies are, simply put, bits of digital data that classify a unit of currency. These units of currency often referred to as tokens, are monitored and tracked on a digital ledger that multiple computers all operate at the same time. With multiple computers all storing copies of the ledger, the digital currency can be traced, bought, and stored while at the same time being universally tracked.
This network of digital ledgers, often referred to as a blockchain, allows for the ownership of digital assets, decentralized trading (no company or governmental oversight), and more. For many people, this decentralized and open-air system is superior to conventional finances. Using blockchain technology, innovators and development teams create various digital tokens, usually with a specific purpose in mind. These tokens are generically referred to as cryptocurrencies or simply crypto. Examples of cryptocurrencies include Bitcoin, Ethereum, Avalanche, and Cardano.
How Can You Buy Cryptocurrencies?
Part of the trick with crypto is that the tokens are digital assets that don’t exist as physical objects. Even more, there is no centralization for most tokens, meaning the process could be different for each one, and the process could be complicated.
It’s important to know that this process will work with ANY cryptocurrency and place your tokens in a secure wallet. Other processes, specifically those where you directly buy on a large exchange and leave it, may be faster and easier but are less secure and more restrictive.
1. Choose a crypto and an exchange
As mentioned above, the exact process will almost always depend on the exact token you are looking to purchase. Buying USDC is going to be different than buying JOE on the Avalanche chain, for example.
Once you know the name of the token you are hoping to get, you need to find an exchange that carries that token. In the United States, the most popular exchanges include Binance (the US version), Coinbase, FTX, and Kraken. Each exchange will carry different tokens, so make sure that the token you want can be bought on the exchange you plan to use. A good trick to use is to head to a currency tracker (I generally use CoinMarketCap) and check under the tokens listing. They will list the official website of a token (see the below image), where they usually list the exchanges that their token can be found on. Additionally, you can just google “where to buy X cryptocurrency,” but there are inherent risks associated with this (people could try and scam you).
2. Create a personal crypto wallet
Once you have a token and exchange selected, you need to ensure you have a wallet that supports your token. Not all wallets support all tokens, although the best wallets allow you to add tokens through a token address. Also, it’s important to know that purchasing a token on an exchange isn’t the same thing as placing a token in your wallet. Often, the exchange will simply “hold” your tokens in their pool until you trade, move, or sell them. This often happens with large exchanges like Coinbase, Robinhood, and Binance, as a user will purchase a token and then never move it to a proper wallet. Keeping your tokens in the exchange “pool” instead of a wallet isn’t recommended.
Some of the most popular crypto wallets include MetaMask (a Chrome Extension), Trust Wallet (a mobile app), and Coinbase Wallet. The process of creating an account and wallet will depend on the company, but it’s important that any wallet you create has a seed phrase. This seed phrase is what keeps anyone from ever hacking your wallet or giving them trading access to it. Write your seed phrase on a piece of paper and either memorize it or hide it.
3. Add your token/chain address to your wallet
Once you have your crypto wallet set up, it’s time to add your token and blockchain addresses. Adding the blockchain network first allows you to add the tokens on that chain since the blockchain is the place where tokens are stored.
Before you start: Some wallets have blockchain networks and token addresses set up automatically. If you are nervous about adding network or token addresses, consider a wallet that natively works with the tokens you want. Trust Wallet is a mobile app that has most of the big tokens built in, for example, and won’t require Step 3 for Ethereum, BNB, Bitcoin, and many others.
Adding the blockchain network
It’s important to remember that not all wallets support all blockchains, but many allow you to add any blockchain you want. Trust Wallet, for example, natively supports ERC20 on the Ethereum Network, BEP20 on Binance Smart Chain, and SPL tokens on the Solana (plus a lot of others), but they don’t have the ability to add blockchains. MetaMask, on the other hand, only supports the Ethereum blockchain on installation, but any operational blockchain can be added without much hassle.
The exact steps to add a blockchain and token address will vary drastically with each wallet and blockchain. With MetaMask, for example, the process looks like this:
On top of the variances within each wallet are the variances within each blockchain network. Generally, googling “how to add (blank) blockchain to (blank) wallet” pulls up some easy tutorials. The entire process shouldn’t take more than 10 minutes.
Adding the token
Once you have added the blockchain network your token is on, you can add the token address. This essentially allows your wallet to recognize and read the token data you are about to send its way when you buy it. Again, this process varies with each wallet, but the menu of each wallet usually allows you to click or tap “add token address” or “import tokens”. On MetaMask, it looks like this:
The best place to find the token address is to head to a token-tracking app like CoinMarketCap or CoinGecko and look at the listing. You can then select copy the token address for whatever chain you are hoping to use it on. Here is an example:
Once you have done that, you are almost done!
4. Trade fiat for crypto and send it to your wallet
Now that you are set up, it’s time to buy! Like always, the process of buying tokens on any exchange will vary, but most large exchanges make things easy. Simply look up the token and follow the steps to purchase it. This process will usually require a debit card or bank account to let you purchase your token for the equivalent market value worth of fiat currency. An example of a trade would be 1 Ethereum token for USD $1,686.05. Confirm the transactions, and wait for confirmation.
Once purchased, you want to send that token to your wallet. Many exchanges don’t have built-in wallets and instead “hold” your purchased tokens on their end. Once you send your tokens to your wallet, they are officially yours and assigned to your address. To send, go into the exchange you bought the token on, and press Send Tokens, Withdraw, or whatever the equivalent language is. Once a withdrawal has been initiated, you can go ahead and open your wallet. Your wallet has an associated address that can be copied or used with a QR code. Once you have your wallet address, simply paste it into the exchange and confirm the transaction. On Binance, the withdrawal process looks like this:
Once you have sent the tokens, you are done (it can take a few minutes)! You’ve officially bought and own your very own crypto. Now, since you’ve already input the settings, you can easily purchase and send more in only a few seconds.
(Optional) 5. Swap crypto for tokens unavailable on major exchanges
Once you’ve bought some of the major tokens on the market, you may discover that a token you’ve been researching isn’t available on any large fiat-to-crypto exchange. With new tokens being created every day, it’s likely you are going to want something that isn’t widely available. When this happens, you are going to need to exchange a more popular token for a less popular one. Generally, this happens on large decentralized exchanges that don’t accept fiat like USD (United States Dollars). Common examples include Pancakeswap, Uniswap, Sushiswap, and Traderjoe.xyz,
The first thing is to locate a token that can be swapped on the exchange. If you were wanting SPELL (a token for the abracadabra.money protocol), for example, it isn’t listed on Coinbase or Robinhood. An option would be to purchase Avalanche (AVAX), a widely available token on most exchanges, and trade it for SPELL using Traderjoe.xyz. The process would look like this:
Using this method, you are able to acquire pretty much any crypto on any network, provided you can find a pair to swap with!