A step-by-step guide to buying cryptos
Never bought cryptos? Don’t know where to start?
Not to worry. This report will explain the process from start to finish.
I’ll show you how to buy any crypto, in a few simple steps. And I’ll explain the terminology you’ll come across: exchanges; altcoins; wallets and the like.
Buying coins can be tricky – at first
Buying cryptos for the first time can be daunting, and annoying.
It’s daunting because it’s unfamiliar, and you constantly wonder whether you’ve made a mistake.
And it’s annoying because certain parts of the process are still a bit fiddly. Cryptos are still a niche investment. Poorly-designed websites come with territory.
In my experience, buying cryptos is easy once you’ve bought them a few times before. And it’s easy to describe the steps involved in getting set up.
Where the problems come about is getting set up on the various sites for the first time. Either the registration process goes well and you’re set up in five minutes… or it doesn’t cooperate and you’re stuck for ages trying to figure out what you’ve done wrong. And the sites in question don’t have great customer support, so you’re left to figure it out alone.
In this guide I’m going to pay particular attention to the registration process for the biggest cryptocurrency exchanges.
The seven steps
There’s about seven steps to the process in total. That might sound like a lot, but once you’re set up for the first you should be able to do them all in two minutes.
I’ll lay them all out here so you know what’s ahead of you. Then I’ll go into each one in detail.
- Register on Coinbase (this is for buying bitcoin with GBP)
- Buy bitcoin
- Register on Poloniex (this is for buying other cryptos with bitcoin)
- Deposit bitcoin into your Poloniex account
- On Poloniex, exchange bitcoin for whatever crypto you want to buy
- Download a Jaxx wallet (this is for storing cryptos)
- Deposit your new crypto into your Jaxx wallet
Register on Coinbase
This is part of the process has caused me, and my subscribers, the most grief.
In theory it should be easy. Coinbase is the biggest exchange there is for swapping currency into the biggest cryptos: bitcoin, ethereum and litecoin. Its user interface is clean and simple and friendly… when it works. If it doesn’t work for you first time, I’d advise you to be patient. The system will let you register evenutally.
So you go to to Coinbase. You click on the “sign up” box in the top right corner. You fill in your details, and they send you an email to verify your address. Once you’ve clicked on the link in your email, you can begin to set up your account.
The next step asks you whether you’re setting up a personal or business account (personal, obviously).
Then they ask you to send in photo ID. This part can cause problems.
They’ll send you a text message with a link in it, to which you’re to upload pictures of your passport or driver’s licence. Clicking on the link in the message takes you directly to the camera app of your phone. Once you’ve taken the photo, click on the “complete verification” button, and go back to your computer. It should take a minute or two for Coinbase’s system to verify your photo.
Next you’ll be asked to link up some form of payment so you can buy cryptos. You have two options here: link a debit card, or link a bank account. The debit card option can be processed straight away and has a limit of £500 per week; the bank account option has a much higher limit (10k per week) but takes 4-5 days to process.
Now you’ve got a fully functioning Coinbase account. It’s time to buy some cryptos.
Click on the buy/sell tab on the Coinbase homepage. You have three options – you can buy bitcoin, ethereum or litecoin. In the screengrab below I’m buying £20 worth of bitcoin. It’s really simple (and in case you’re wondering – you can buy in tiny increments of a bitcoin. So you don’t need to spend $4000 or whatever to buy a whole coin).
We’re buying bitcoin because, if we ultimately want to buy more exotic cryptos, we need to pay using bitcoin and not GBP. These alternative cryptocurrencies are sometimes called altcoins, which basically means “all cryptos except bitcoin”. That’s the purpose of registering on Coinbase: we swap GBP for bitcoin, so we can then swap bitcoin for whatever altcoin we’re after.
The bitcoin you bought will show up in your Coinbase account balance. It’ll look like this:
Now you own bitcoin. To convert them it other cryptos, you’re going to need to open an account at a cryptocurrency exchange. The biggest of these is called Poloniex.
Swap bitcoin for altcoin on Poloniex
Setting up on Poloniex is simpler than setting up on Coinbase. There’s less faff over linking your bank account.
At Poloniex you hit the create an account button and go through the steps, as with Coinbase. In Poloniex’s case you just upload a picture of your passport rather than take a picture of it with your phone.
Once you’re set up on Poloniex, click on the balances tab on the top right, then click on deposits and withdrawals. You’ll see a list of all the different cryptos offered on the exchange. Click the link for bitcoin. That’ll open up an option to deposit bitcoin into Poloniex. When you click the deposit link, you’ll see an address like this:
This address is something like a bank account number. It’s where you’re going to send the bitcoins in your Coinbase account.
Now, go back to Coinbase. Click on the send/request tab. You’ll see a screen like the following:
In the recipient field, past the “bank account number” you just got from Poloniex, then transfer whatever amount you want to transfer. It’ll send a confirmation code to your phone; once you input the code, you’re good to go.
Within ten minutes or so, your bitcoin will show up in your Poloniex account ready to go. You’ll be able to see it in the Poloniex balances deposits and withdrawals page, and it’ll look like this:
Now you have bitcoin on your Poloniex account and you’re ready to trade. To do that, click on the exchange tab on the top left. On the right hand side there’s a box labelled “markets”. Click on the BTC tab; this shows you the cryptos you can exchange for BTC, and their prices.
Click on whichever crypto you want to buy – take REP coin, for example. This will take you to the REP/BTC market, where you can see the exchange rate chart. To buy REP coins, input the amount of BTC you want to spend in the “BUY” box at the bottom left of the screen.
(At this point everything is in BTC terms. To work out how much you’re talking about in GBP terms, you’ll have to divide back using the GBP/BTC exchange rate.)
Once you’ve bought the coins, you’ll be able to see them in the balances, deposits and withdrawals tab. You’re nearly there — all that’s left is to stash your new cryptos in a wallet.
Stash them in a wallet
The last thing you’ll need to do is transfer the cryptos into a wallet for safekeeping. Why do this? Well, the big exchanges like Poloniex hold many millions’ worth of customers cryptocoins, which makes them a big target for hackers. Hackers have hit the exchanges a good few times now. So it’s not safe to leave your coins there.
To store the coins we’re going to make use of a wallet. A wallet is nothing more than a piece of software which encrypts your coins, and keeps them away from hackers. There are lots of wallets on the markets, but I like Jaxx.
Jaxx is a simple, secure wallet with a desktop and a mobile version. I prefer the mobile version because mobile phones are generally harder to hack than desktops. So the first thing to do is download Jaxx from the iOS or Android app store.
Once you’ve downloaded it it’s quick to set up. Just tell it which type of coins you want to store and it’ll set up spaces for them within the app.
To put your new coins into Jaxx it’s the exact same process as with Coinbase. You within your Jaxx wallet you tap on the receive button. It’ll show you an address, which is where you’re going to send the coins. In the following picture, it’s the long string of numbers and digits beginning 0xcbf…
Next thing you do is go back to Poloniex, back to your balances deposits and withdrawals tab, and click on your coin. Click withdraw. When you do, you’ll see the following:
You input the long address from your Jaxx wallet into the address field and the amount of coin you want to send. Then hit the button. Job done!
Within a couple of minutes your coins should be safe and sound in your Jaxx app.
Congratulations. You’re now a fully fledged crypto investor. If you stick with the wallet your cryptos will be safe. And if you want to ever sell them, just follow the same process of transferring to Poloniex and then Coinbase.
Of course, none of this has anything to say about which cryptos you should actually buy. That’s a whole different topic.
Every day cryptocurrencies are rapidly shooting up in value, and our crypto expert John Duncan been working to find a way for ordinary people like you to get in on these moves.
He calls it a “caveman simple” way of making money from the crypto explosion.