How to buy cryptocurrency online

A cryptocurrency is an often decentralised, digital currency secured by cryptography. This makes it impossible to counterfeit. 

This guide will cover the fundamentals of cryptocurrency and how you can get involved and buy crypto. 

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CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 67% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money.
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CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 74.48% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
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What is cryptocurrency?

A cryptocurrency is a digital currency secured by cryptography. Most cryptocurrencies are decentralised networks built using blockchain technology. Blockchain technology is a distributed ledger enforced by a network of computers. What makes cryptocurrencies unique is that they’re not issued by a central authority such as a bank. This in theory makes them immune to government manipulation and interference. 

The first blockchain-based cryptocurrency was Bitcoin, the most famous cryptocurrency in the world and currently, the most valuable. In 2021, there are thousands of cryptocurrencies each with their own functions. Some of these are forks of Bitcoin, whilst others were built and developed from scratch. 

The first cryptocurrency was launched in 2009, but an unknown individual (or group) known as “Satoshi Nakamoto.” There are now 18.8 million Bitcoins in circulation, with a market cap of $858.9. To prevent inflation or market manipulation, only 21 million Bitcoins will ever be released. 

Amongst the thousands of competitors in the cryptocurrency market, “altcoins” have been the most successful. Popular cryptocurrencies include Ethereum, Cardano, Namecoin, Dogecoin and Litecoin. The estimated value of all cryptocurrencies in existence is around ​​$1.8 trillion, with Bitcoin accounting for around 46% of the total value, hence why many people decide to invest and buy cryptocurrencies.

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1
Minimum Deposit
$50
Exclusive Promotion
User Score
10
More than 3,000 assets, including currencies, stocks, cryptocurrencies, ETFs, indices and commodities
Buy crypto, or trade cryptocurrencies via CFDs
CopyPortfolios: Innovative, fully managed investment strategies
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 67% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money.

Pros of cryptocurrencies

  • One of the most promising features of cryptocurrency is that funds can be transferred between two parties without the need for a third party (bank, building society, government). Transfers are instead secured using public and private keys. 
  • Users can now hold their cryptocurrency in a digital “wallet”. This crypto wallet has a public key and a private key, with the private key being used to sign transactions. Transfers can be completed with minimal fees, which helps people avoid the fees charged by many financial institutions. 

Cons of cryptocurrencies

  • Cryptocurrency has developed a negative reputation for being used in illegal activities. These include tax evasion and money laundering. As a result, cryptocurrency has not yet achieved support by the masses, who instead choose to use fiat currency over crypto alternatives. 
  • Not all cryptocurrencies are as private as they claim to be. For example, the Bitcoin blockchain has been used to catch and prosecute criminals. Though this is of course a benefit, it can create doubt for individuals who simply wish to remain anonymous. 
  • Another downside of buying crypto is if you’re looking to buy cryptocurrencies, your returns are not guaranteed as cryptocurrencies are very volatile.

How does cryptocurrency work?

Most cryptocurrencies operate without the support of a central bank or government. This makes them unique from fiat currencies such as GBP and USD. Cryptocurrencies have instead replaced governmental guarantees with blockchain technology. 

Rather than having physical notes or coins, cryptocurrencies are only available in a digital format. They’re virtual tokens that are valued based on market forces and people who want to own them. It’s estimated that around five thousand cryptocurrencies exist, with Bitcoin accounting for 46% of all cryptocurrency value at around $400 billion. Other cryptocurrencies are also growing in popularity with Ethereum being valued at $73 billion and Ripple being valued at $55 billion. 

In many cases you can buy cryptocurrencies online using traditional cash (known as fiat currency) and can then be used to buy goods or services online. Cryptocurrencies have the same value in each country, allowing individuals to trade without having to worry about exchange rates. With only a limited number of currencies to exist, Cryptocurrencies such as Bitcoin have been compared to assets such as gold. 

The greatest appeal of cryptocurrency is that they can be traded and bought on exchanges similar to the stock market. Cryptocurrencies also becoming more practical, with many traders and payment processors now accepting cryptocurrencies as a payment. This means that you can now buy cryptocurrencies such as Bitcoin, XRP or Litecoin with PayPal.

How to buy cryptocurrency online

You can buy cryptocurrency online on platforms known as cryptocurrency exchanges. These exchanges allow you to buy crypto with most fiat currencies. There are 100’s to choose from, though the most popular include Binance, Coinbase and Kraken.

Here’s a step-by-step guide to buy cryptocurrency online: 

  1. To buy cryptocurrency, you need to open an account with the cryptocurrency exchange of your choice. When you sign up, you’ll need to verify your account with proof of identity and address to start buying crypto. This will usually take around 24 hours. 
  1. Log into your account and make sure your account is funded. With certain exchanges such as Binance, you can directly connect your bank account to buy Bitcoin or other cryptocurrencies. 
  1. Select the number of tokens you want to buy for that currency and click “Buy” to complete. Double-check your account to ensure the transaction has been completed. 

Congratulations, you’ve just bought your first cryptocurrency online!

Top platforms to buy cryptocurrency online

1
Minimum Deposit
$50
Exclusive Promotion
User Score
10
More than 3,000 assets, including currencies, stocks, cryptocurrencies, ETFs, indices and commodities
Buy crypto, or trade cryptocurrencies via CFDs
CopyPortfolios: Innovative, fully managed investment strategies
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 67% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money.
2
Minimum Deposit
$250
Exclusive Promotion
User Score
8.1
Trade the global markets. Trade with real-time execution and professional tools
Follow and copy Naga's top traders who have mastered their trading strategies
Free personal account manager
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 74.48% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
3
Minimum Deposit
$50
Exclusive Promotion
User Score
7.5
Over 4 million customers worldwide
Buy, sell and trade nearly 200 digital assets
Verified within 15 minutes

How to trade cryptocurrency

Trading cryptocurrency is slightly different to buying crypto. It is a popular way for investors to make profits on dips in the market. You can trade cryptocurrencies on most popular exchanges. 

To do so, make sure you already own cryptocurrency (if you don’t know how to, check our steps above on buying cryptocurrencies). Search for the currency you wish to trade it into and select the number of tokens you want to buy. 

Complete the transaction and you’ll now own a new cryptocurrency.