If you’re ready to take the plunge and buy some crypto for the first time, you’ve come to the right place. Doing so might seem like it’s complicated, but as you’ll soon find out, it’s actually fairly straightforward, though you do need to pay attention to ensure your digital assets are kept safe and secure. 

Check out this guide to getting started with crypto, and you’ll be ready to take your first baby steps into the exciting world of digital money in just a few minutes’ time.  

What You Need To Do:

To get started with crypto, you’ll need to do five things that can all be accomplished fairly quickly:

• Get a cryptocurrency wallet
• Set up your wallet
• Open an account with a cryptocurrency exchange
• Find the documents needed to verify your identity via KYC
• Buy some cryptocurrency

Get a cryptocurrency wallet

The very first step is to obtain a crypto wallet so that you have someplace secure to store your digital assets. There are a few different options available, ranging from hot wallets to cold wallets, and custodial to non-custodial wallets. 

Cold wallets, or hardware wallets, are a physical device that looks a bit like a USB drive, which can store cryptocurrency offline. By storing your crypto offline, it is more secure because it means those funds cannot be accessed without first connecting that device to the internet. Cold wallets typically have several layers of security, too. Some well known hardware wallets include Trezor and Ledger, both of which can be purchased online. 

Hot wallets on the other hand are software-based digital wallets. They’re generally called crypto wallet apps, and can be installed on a smartphone, tablet or PC. There are literally hundreds of hot wallets to choose from, but be sure to understand that there are two types – custodial and non-custodial

Custodial wallets are those that are controlled by a third-party. For example, when you open an account on a crypto exchange, your funds will be deposited into a custodial wallet that’s controlled by the exchange. The advantage of this is that it’s easy to recover your funds if you lose access to your account, as you can use your email if you forget your password. On the other hand, non-custodial wallets are dependent entirely on the user. If you forget your secret “seed phrase”, which is a string of random words needed to access the wallet, it’s highly likely that you will never recover the funds in that wallet.  

Most major cryptocurrency exchanges offer wallet services. For instance, Coinbase is the largest crypto exchange in the U.S. and it also has a separate, non-custodial wallet called Coinbase Wallet. Trust Wallet and Coinomi are popular non-custodial wallets too. Meanwhile, Lama is a good example of a custodial hot wallet. 

Set Up Your Wallet

If you’re using a custodial hot wallet, setting up your account is a simple process. All you have to do is create an account with a username and password, and then be sure to enable two-factor authentication for extra security. If you’re going to use the wallet on an exchange platform, beware that you’ll also be required to provide your identity documents as part of the KYC process. 

Non-custodial wallets need a bit more work. After generating your first wallet by following the simple instructions in the app, you’ll be given a randomly generated “seed phrase”, which is (usually, but some wallets differ) a string of 12 random words. You need to write this seed phrase down on a piece of paper and store it somewhere safe and secret, so it can’t be thrown away or somehow lost. If you lose this seed phrase and you’re locked out of your wallet, you’ll be forced to say goodbye to whatever funds were stored in it. 

Cold wallets also provided a seed phrase, usually much longer. Trezor and Ledger both generate a string of 24 random words. In addition, you’ll be asked to create a PIN number for access each time you wish to use the wallet. You’ll also need to download the relevant app for your cold wallet onto your phone or PC, because they work in tandem. 

We should point out that there is one more option, which is known as a “paper wallet”. Paper wallets are a kind of cheap and cheerful cold wallet that can be generated online. The public and private keys are printed onto a piece of paper, and this information is needed to access those funds in future. Paper wallets are a good choice for people who wish to keep their crypto secure for a long time.

Choose an Exchange

Now that your wallet is set up, you’re ready to head to a cryptocurrency exchange and start buying some tokens for the first time. 

There are literally hundreds of crypto exchanges you can choose from, so it pays to do a bit of research to determine which platform is most suitable for you. For example, you’ll need to find an exchange that accepts your local fiat currency. You’ll also need to consider what cryptocurrencies it supports. If you’re only planning on buying Bitcoin, you can be sure that just about every exchange supports the world’s best known crypto, but if you’re looking for a more obscure token such as Helium or Livepeer, you’ll find that you have much fewer options. 

Other considerations include how regulated a crypto platform is, and what security measures it has in place. In addition, it may be helpful to find an exchange that has educational tools that teach users how to trade cryptocurrencies, in case that’s what you’re intending to do. 

The biggest crypto exchange in the world is Binance, and for good reason because it supports hundreds of different cryptocurrencies and has a well known “Binance Academy” platform that educates users about trading strategies and explains the purpose of many kinds of token it supports. 

If you happen to be interested in spending your crypto on day-to-day purchases, you’ll need to find an exchange platform that also provides wallet services. For instance, the Lama App is a secure crypto wallet that allows users to trade cryptocurrencies directly within the app, and it also has strong support for fiat. With its simple UI, Lama’s goal is to bridge the worlds of traditional finance and crypto, and to that end it even provides a Visa debit card that users can link to their wallet, enabling them to spend their crypto out in the real world. It also offers 24/7 customer support services.

Other reliable and reputable crypto exchange platforms include the likes of Gemini, Kraken, Coinbase, OKX, StormGain and BitFinix, to name just a few. 

No matter which exchange platform you ultimately choose, you’ll be required to provide some kind of proof of identity. Generally this means uploading a copy of your passport, driving license or citizen’s ID card, and perhaps a selfie too. You may also be asked to provide proof of address. 

Once that’s done and you’re approved to start trading, you’ll be able to transfer some cash from your bank account to the exchange and buy your first cryptocurrency. 

A Word of Caution

Many people feel that crypto can be a solid long-term investment, and there’s money to be made in day-to-day trading too. That said, it’s important to realize that crypto is also a risky bet, as the industry is known for its extremely volatile and sudden price swings. It’s quite common for the value of a cryptocurrency to swing up or down by as much as 30% in a single day, and there have been instances where the value of some tokens has collapsed to zero – as LUNA and UST holders can attest to. So understand that there’s absolutely no guarantee that you’ll make money. 

That said, if you’re prepared to take the risk, crypto can be a fun and sometimes very profitable investment if you get it right. There’s also the wonderful feeling that comes from participating in the decentralized economy, and owning money that you control, with no limits on how you spend or invest it. When you buy crypto for the first time, you’ll become a part of a brave new world that’s transforming the face of finance forever. So take care, but don’t delay, now is the time to get involved.