A Brief Guide to Buying Cryptocurrency
If you’ve read our Brief Introduction to NFTs and had a look at what is available on the marketplaces such as OpenSea, Makersplace, and Nifty Gateway, you might now have seen an NFT that you are interested in buying. To do that you’ll need some cryptocurrency to pay for it, so here is our guide about how to get cryptocurrency.
First, it is important to be aware of security. Unfortunately there are many scammers and thieves in the world of cryptocurrency who look to take advantage of people. However, by following some simple security steps, you can beat the crooks and protect your cryptocurrency and NFTs. We have made a page of security tips here, and you should read this before proceeding. In particular, make sure to purchase a hardware wallet (sometimes called a cold storage wallet), which will allow you to store your cryptocurrency and NFTs securely. Popular hardware wallets include Trezor and Ledger.
When you have your hardware wallet, you are ready to buy cryptocurrency. You will need to set up an account with a cryptocurrency exchange – this is a website that allows you to change your fiat money (that is your mainstream currency such as dollars, pounds, or euros) into cryptocurrency. Popular exchanges are Coinbase, Binance, and Kraken. You’ll be asked to provide some ID, such as an image of your passport, as part of the set-up process. When your account has been opened, onscreen instructions will help you to link your bank account to it. You can now buy cryptocurrency!
Each exchange offers a range of possible cryptocurrencies which you can select from. If you wish to use your cryptocurrency to buy an NFT, the marketplace will show which currency can be used for your chosen NFT – ether is the most common. Don’t panic if the transaction doesn’t complete immediately – it can sometimes take a few minutes. There will usually be a fee charged for each purchase of cryptocurrency, which can vary according to the traffic volume on the exchange – if it seems high it’s worth checking back later when the exchange may be quieter. When the transaction completes, your cryptocurrency will be in your exchange account. This is not a secure way to hold cryptocurrency, so here’s where your hardware wallet comes into play. Transfer the cryptocurrency according to your hardware wallet’s instructions, and that will keep it safe until you’re ready to use it. Now when you’re ready you can visit the marketplace and buy that NFT!
A reminder of some of the terms used in this article:
- Cryptocurrency – a decentralised digital currency
- Cryptocurrency exchange – a website where fiat currency can be exchanged for cryptocurrency
- Ether – the cryptocurrency commonly used in the minting of NFTs
- Fiat – currency controlled by governments, such as dollars, pounds, and euros
- Hardware wallet (also called cold storage wallet) – a device that securely stores, manages, and allows transactions with cryptocurrencies.
- HODL (hold on for dear life) – simply hold your cryptocurrency in your wallet without selling it or buying things with it
- NFT (non-fungible token) – a technology that allows people to own and trade digital items, such as digital art
- NFT marketplace – a website where NFTs can be browsed, bought, and sold