When crypto first arrived on the scene over a decade ago, it was pretty obscure, like some hipster band only that one friend knows while you barely recognize the name. Flash forward to now, and suddenly crypto is mainstream. It’s not top 40 mainstream yet, but it’s likely making its way into more and more conversations and showing up in your life in new ways. One of the biggest changes in cryptocurrency is the wider adoption of crypto for payments. That means that many folks are starting to wonder about buying cryptocurrency for retail transactions rather than for trading and investing purposes only.
With more uses for crypto and more interest, there are inevitably more questions from consumers. One of the things that have, likely, kept some from buying cryptocurrencies are the different ways to buy it. It’s, intentionally, not like walking into the bank and making a withdrawal. In fact, there’s an entire crypto world happening outside of established centralized currencies and you likely have some questions before diving in.
What is Cryptocurrency?
Unlike your friends and their hipster band, we won’t keep you in the dark. The simplest way to explain it is that cryptocurrency is a decentralized digital currency that can be an investment or traded, bought or sold, and, more importantly, used for real-world transactions at retail stores both online and brick and mortar.
Why Buy Cryptocurrency?
There are a few reasons why you might want to buy crypto, but regardless of your reasoning, the benefits remain the same:
Speed– Transactions happen faster than just about any other “money” network available.
Security– Transactions are secured via blockchain technology which verifies transactions. Further, your individual currencies are stored in a wallet that only you have access to, ensuring your digital currency stays safe.
Privacy– Buying cryptocurrency, depending on the wallet you use, doesn’t require ID, like at a bank. While transaction data remains public, as does your wallet ID, your name, and personal information need not be connected to transactions.
Accessibility– Buying, selling, trading, and investing in crypto requires internet access (and a device). That means just about anyone can access cryptocurrency exchanges and get started. There’s no red tape, no paperwork, no ID requirements, or other barriers to entry and briefly Stable tokens offer inflation protection.
Transparency and fraud reduction– As mentioned, all transactions are verified and recorded on the blockchain which acts as a digital ledger. That means it’s remarkably difficult to create fraudulent transactions. Further, as no one has access to your wallet other than you, unless you give your private key to another individual, transactions cannot be initiated using your cryptocurrencies. Cryptocurrencies are, therefore, unlike credit card numbers, which can easily be stolen.
Who is Buying Cryptocurrency?
We’ll give you a hint…it’s not just your hipster friend anymore. Adoption appears to be largest in countries and regions with more demand for decentralized banking options. However, the demographics of adopters appear to be quite similar across all regions. More specifically, millennials and men seem to be the biggest buyers of cryptocurrencies (men between the ages of 18-45).
While other generations, and women, are also buying, they are doing so in significantly fewer numbers. As the market changes and more stores enable crypto payments, it will be interesting to see how the demographics shift.
How to Buy Cryptocurrency
There are, essentially, two ways to buy cryptocurrency, through an exchange or through a broker who takes the “complications” out of the exchange for buyers.
Complications? Well, exchanges, like Coinbase and Binance, are typically applications and websites that enable multiple kinds of transactions and provide detailed dashboards and information regarding exchange rates and cryptocurrency performance. As a result, beginners may find them overly complicated or complex, especially for basic needs.
Enter the broker. Brokers, by definition, act as middlemen between the “exchanges” and the buyer. Brokers, like Robinhood and SoFi, in this case, are also applications or websites which offer much less complex interfaces, but also often include higher (or hidden) fees as well as some restrictions on where and how you can manage your holdings.
When to Buy Cryptocurrency
This is a slightly more complex “question” as when to buy cryptocurrency really depends on your personal readiness and the coin itself. Crypto markets are notorious for being volatile and that means there can be severe fluctuations over the course of the day, week, or month when it comes to any specific coin. In fact, much like day traders in the stock market, there are crypto investors who buy and sell based on market fluctuations.
That said, the financial advice website The Motley Fool offers several pieces of advice when it comes to buying and trading crypto. After considerable research and trend tracking, when it comes to some of the most heavily traded coins, they recommend:
Early in the day (earlier the better, regardless of time zone)
Thursday (this seems to be the day when prices dip)
Near the end of the month
Obviously, again, this will largely depend on the coin, and the best thing you can do is get on an exchange and track the coins you’re interested in. Stable coins are always an option as well if you’re looking for something that is a bit more consistent. Further, you may want to investigate new coins so you can get in on the ground floor.
Which Cryptocurrencies to Buy
As you have probably figured out by this point, it really depends. In fact, it depends on quite a few factors including:
- Your crypto goals – Will you buy, sell, invest, trade, or spend? For example, if you’re mostly looking to spend your cryptocurrency at retailers, you’ll want to look at what’s widely accepted, what’s easiest to spend, and what coins offer the best return.
- Your risk tolerance– Some coins are far more volatile than others; some are stabilized.
- Your investment strategy– You may want to diversify and buy different coins based on what’s in your wallet, what’s trending, what’s stable, or what seems like a good bet.
- Current research– Multiple sites will offer research and recommendations regarding the best cryptocurrencies to buy and when.
- The market– Again, the market fluctuates and so you want to buy a coin when its value dips (much like buying stocks low and selling high). Understanding how the market works and moves is important for those looking to invest in particular.
If you’re interested in learning more about buying a cryptocurrency you can spend at your favorite retailer, while getting in on the ground floor of crypto designed for that purpose, then check out $Pay from PayBolt. We built our platform and our coin with consumers and retailers in mind. Our goal is to create fast, easy, and secure transactions so your cryptocurrency works for you.