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Buy Cryptocurrency in 2024: A Beginner's Guide to Bitcoin & Beyond

Cryptocurrency is becoming a little more mainstream — at least more people have heard of crypto and are interested in it. With this increased interest, more people want to know how to buy cryptocurrency so they can get in on the action.

If you’re interested in learning how to buy cryptocurrency, whether you want to use it for person-to-person transactions, as an investment, or even if you think you might be able to make purchases from retailers, here’s what you need to know.

In this article

What is cryptocurrency?
How to buy cryptocurrency
Where to buy cryptocurrency

Broker exchanges
P2P exchanges
Investing apps
PayPal
ATMs

Tips to keep in mind before you buy crypto
FAQs
Bottom line

What is cryptocurrency?

A cryptocurrency is basically digital money or a form of digital currency. It’s a medium of exchange that doesn’t rely on a centralized authority, like a central bank, to verify its legitimacy. Instead, transactions are made using tokens (coins) and verified using cryptography. Cryptocurrencies are sent and received using a decentralized public ledger called a blockchain.

Cryptocurrencies are different from what we call fiat currencies, which are those backed by the government. For example, the U.S. dollar is a fiat currency backed by a centralized authority — the United States government. Cryptocurrencies exist digitally and don’t require a central source because they’re secured by networks of computers.

Bitcoin kicked off the use of cryptocurrencies, so any cryptocurrency that isn’t on the Bitcoin blockchain is considered an altcoin — or an alternative to Bitcoin. The rise in popularity of Ethereum and its related blockchain could change that, though. Some brokers like Robinhood now divide cryptocurrencies into the Bitcoin and Ethereum families and list the rest of their available offerings as altcoins.

In addition to these main coins and altcoins, there are stablecoins, which are linked to specific assets. For example, a stablecoin might be linked to the U.S. dollar. In order to maintain price stability in a one-to-one exchange, the coin is backed by reserves of dollars held in a bank. There are also stablecoins that are pegged to other fiat currencies or commodities such as gold.

As you learn how to invest money in cryptocurrencies, understanding the differences between fiat currencies, altcoins, and stablecoins can help you make better decisions.

Popular cryptocurrencies

According to Visa, its customers spent $1 billion on its cryptocurrency-linked cards in the first half of 2021. As more retailers accept crypto assets as payment and more people learn how to invest in digital assets, the list of popular cryptocurrencies grows.

Some of the most popular cryptocurrencies, according to the CoinDesk20 as of July 12, 2021, include:

Bitcoin (BTC)
Ethereum (ETH)
Ripple (XRP)
Cardano (ADA)
Stellar (XLM)
USD Coin (USDC)
Uniswap (UNI)
Chainlink (LINK)
Polkadot (DOT)
Litecoin (LTC)

Some coins, like Dogecoin (DOGE), made a big splash initially, but have since dropped in popularity.

How to buy cryptocurrency

Before you move forward with your cryptocurrency purchase, you need to determine a few basics.

1. Your country’s regulations

Realize that, first of all, you need to determine your country’s regulations regarding cryptocurrencies. You can check with your country’s main financial regulatory body to find out whether you’re allowed to buy, sell, and own cryptos. You can get a basic overview from Analytics Insight’s rundown of cryptocurrency regulations.

Some countries, like Iran and Bolivia, have banned cryptocurrencies altogether. Other countries are specific to their bans, such as South Korea banning privacy coins like monero (XMR), which hides some of the specifics of transactions and can be used in money laundering.

2. How you plan to pay for your crypto

Once you figure out whether you can buy cryptocurrencies in your country, it’s time to figure out how you plan to pay for your crypto. Not all crypto exchanges and trading platforms accept all forms of payment. Some exchanges will take debit and credit cards, while others only accept bank transfers.

It’s also important to note that some exchanges allow you to transfer your crypto tokens from another exchange or crypto wallet into and out of their exchange. Depending on the exchange, you might be able to directly trade cryptocurrency pairs without first converting to a fiat currency. This could save you both hassle and money.

3. How to analyze fees

Various exchanges and brokers charge different fees. Additionally, you might have to pay other fees. When engaging in transactions that include the Ethereum blockchain, you might be charged a “gas” fee based on the computing power being used to complete transactions.

Look at a platform’s fee schedules to get a sense of what you’ll pay. For example, you might pay a flat transaction fee but then need to pay other fees on top of that. This might make a sliding transaction fee at another platform actually work out better.

Find out what fees are charged. Some brokers simply charge based on the spread between the asking price and the selling price of a coin. Many exchanges will provide you with the total cost before you complete your transaction, but in some cases, you might be surprised later.

4. Which coin you want to buy

Not every coin is available in every place. If you want to trade Bitcoin, you have a lot of exchanges and brokers available to you. But, DOGE isn’t available on every exchange, even though it was popular for a period of time. Many altcoins aren’t readily available on major exchanges.

There are thousands of cryptocurrencies, so it’s important to know what you want to buy before moving forward. Research the coin you’re interested in and look for an exchange or broker that offers access to it.

For more info, check out our guides on:

How to buy Bitcoin
How to buy Dogecoin
How to invest in Ethereum
How to invest in Litecoin

5. How to get set up with a digital wallet

Finally, you need a digital wallet that can receive, send, and store your coins. To make the best choice for your goals, you need to understand the difference between a hot wallet versus a cold wallet:

A hot wallet is one that’s always connected to the internet. Some major exchanges offer wallet services connected to the internet to make it easy to send and receive coins from others, or from your own wallet.
A cold wallet isn’t connected to the internet. It is a hardware wallet that often looks like a flash drive. This means your security keys aren’t saved online. But you only plug the wallet into a computer if you want to send or receive crypto from elsewhere.

When choosing a wallet, make sure it’s compatible with the coin you’re interested in. Not every wallet can accommodate every coin, so research ahead of time to make sure your wallet will work with the coins you want to buy.

Where to buy cryptocurrency

Broker exchanges

The best cryptocurrency exchanges function similarly to regular brokerages. Much like you can choose a stock to buy with an online broker and place your order, a crypto broker exchange allows you to choose a coin to buy and make your purchase.

It’s also often possible to buy a portion of a coin. For example, if you can’t afford one Bitcoin, you could buy a fraction of a Bitcoin. Many exchanges list a minimum transaction amount for each coin, so you know how much you need to spend at minimum.

Some exchanges also allow for trading cryptocurrencies for one another. Examples would be for trading Bitcoin/Litecoin (BTC/LTC) or trading Ethereum/Bitcoin Cash (ETH/BCH). As long as the particular cryptocurrency pair is supported, you might be able to directly exchange them without first converting them to a fiat currency.

Some exchanges even offer credit cards and other perks, like rewards in cryptocurrency. This makes it easier to use your cryptocurrency or even earn more coins with each purchase.

Some common cryptocurrency exchanges include: