Tutorial - Buying and trading cryptocurrencies
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Cryptocurrencies are in fashion and are now attracting more and more investors and speculators. The first question that arises is how do I buy a cryptocurrency?
Firstly: first of all you need to be able to distinguish between platforms for purchasing cryptocurrencies and platforms for trading cryptocurrencies.
- Cryptocurrency purchasing platforms let you deposit euros or dollars to purchase major cryptocurrencies (Bitcoin, Ripple, Litecoin , Bitcoin Cash)
Examples of cryptocurrency purchasing platforms: Bitstamp, Coinbase, kraken, etc.
- Cryptocurrency trading platforms can only receive cryptocurrencies for the purpose of trading them for other cryptocurrencies (altcoins).These trading platforms offer a much larger panel of cryptocurrencies than purchasing platforms. Example of cryptocurrency trading platforms:Bittrex, Binance, HitBTC, etc.
Back to purchasing cryptocurrencies.It takes 4 steps to buy a cryptocurrency, apart from Bitcoin, then a 5th step to secure your purchase.I'm talking about buying any other cryptocurrency (e.g.:NEO, NAV, DASH, SUB, etc.)
You have a bank account in euros with BNP, Société Générale, whichever. And you want to buy cryptocurrencies.First you need to find a cryptocurrency purchasing platform that lets you deposit euros (or US dollars), so as to buy Bitcoin (BTC) or Litecoinsfirst :.A major cryptocurrency.
So you are going to open an account with BitStamp (or with CoinBase, or elsewhere). You are only asked to provide a copy of your passport or identity card, and proof of address.Then complete the email/telephone checks (so that you can be alerted of any activity on the crypto account). NB: for optimal security of your crypto account, remember to activate "two-factor authentication".
Opening your 1st crypto account is now completed. Let's move on to the euro transfer.
On BitStamp, simply go to "Deposit", then select "EUR Bank (SEPA)" and enter the amount of the deposit in euros.BitStamp then registers your deposit request, provides you with the accounts’ bank details which you useto transfer the euros, and the wording of the transfer (to be entered in the "wording" field of the transfer that is to be made from your bank account).
Important: the transfer’s wording enables the crypto establishment to identify the transfer, and then to fund your crypto account more quickly.
Information: it takes about 5 days to receive a euro transfer on a cryptocurrency account.But don't hesitate to contact the establishment's support desk if this deadline is exceeded.
Your euros are now on your BitStamp cryptocurrency account;but this establishment does not allow you to trade altcoins (other cryptocurrencies). Therefore you need to buy Bitcoins to transfer them to another crypto establishment.
Buying Bitcoins is quite simple at this stage. You click on "Buy/Sell",Bitstamp displays the Bitcoin order book (or the major cryptocurrency you are currently consulting on their site).You just have to carry out a simple transaction to buy Bitcoins against your euros.
On BitStamp, you now own your first Bitcoins.To buy other cryptocurrencies, you have to go to another establishment (e.g.:Bittrex, Binance, etc.).
At this new establishment: open an account. It takes less than 5minutes. Then secure it with two-factor authentication access.
If it is Binance, then go to "Funds / Deposits-Withdrawal".And you can then see all the cryptocurrencies that you can deposit/withdraw.
If it's Bittrex, you go to "Wallets".The "deposit/withdrawal” system appears with "+ / -". To deposit, click on "+", to withdraw, click on"-".Here is a screenshot so that you can understand it better:
In both cases, go to the Bitcoin line (since you have to transfer Bitcoins from your BitStamp or CoinBase account to your Bittrex or Binance account), then select "Deposit".
The site automatically creates a “wallet” for you (a wallet to receive/transfer in this cryptocurrency).This wallet is presented as a simple address (sequence of numbers and letters).
Copy this address, then return to Bitstamp (or Coinbase, etc. Where you have your BitCoins); Select withdrawal, and specify the BitCoin wallet address provided by Bittrex (or Binance).
Confirm the transaction.It's sent!
For information:
You can track your Bitcoin transaction directly on the Bitcoin blockchain.
Important:
On some cryptocurrencies (e.g.:Ethereum) the transfer from "wallet" to "wallet" is carried out using a "smart contract".However, not all establishments necessarily agree to accept these “smart-contracts”.The risk is therefore to lose all the funds transferred in the blockchain; be careful!But in this case, the establishments can generally help you and intervene manually to recover the funds.
Important:
NEVER transfer a cryptocurrency to a wallet that does not accept that cryptocurrency. If you make this mistake, your funds will definitely be lost, your two crypto establishments will not be able to help you, and there is no solution.Example: you transfer Bitcoins to a NEO wallet by mistake.
Important:
If you are making your first transfers in cryptocurrencies, be sure to do what I call "test transactions" first.Do not send everything at once; first test a transfer with a small amount; then send the rest if the transaction has gone well.Do the same for the first euro transfer from your bank account.
Your Bitcoins are now in the establishment (Bittrex, Binance or others) which allows you to trade a multitude of cryptocurrencies. These altcoins are generally bought and sold against Bitcoin (BTC), Ethereum (ETH), Tether (USDT), or NEO (NEO).
At first, you can only buy cryptocurrencies listed in Bitcoin (because you only have Bitcoins in your wallet). But you can very quickly switch your Bitcoins to Ethereum by going on the BTC/ETH pair (Bitcoin versus Ethereum).
To buy NEOs, for example, go to the NEO/BTC pair and buy NEOs against your BTCs.
There we are! You've invested in the cryptocurrency of your choice. But there is one (recommended) "security" step left: transfer these altcoins to a private wallet, so as to protect yourself from a possible scam of your cryptocurrency establishment (which could close shop taking all its customers’ funds.)
To transfer your cryptocurrencies to a private wallet, there are numerous solutions. The most secure way, however, is to download the "private wallet" offered by the cryptocurrency in question.
Example: you have NEO, then go to the NEO website and download the NEON software. This software enables you to create a private wallet directly on your computer and then transfer your NEO (from any establishment). (See also: NEO to a NEON wallet)
Another example: you have NAVcoin, then go to the NAVcoin website and download NavCoin Core. This software enables you to create a private wallet directly on your computer and then transfer your NAVcoin to it (from any establishment).
NB: not all cryptocurrencies offer a "private wallet". Some cryptocurrencies should therefore be kept at the establishment of your choice, or on sites specialized in private wallets.
Transferring to a private wallet is identical to transferring encrypted money from one establishment to another; the private wallet software generates a wallet including a public address and a private address. The private address is to be kept secret, locally; it enables you to connect to your private wallet. The public address is the address to which you transfer your funds from Bittrex (or Binance, etc.)
If you have an unrealised capital gain / loss on an altcoin, and you want to turn it back into euros, or stop trading in cryptocurrencies, you have to repeat the steps in reverse:
1/ Re-transfer the altcoins in your private portfolio to a "broker" who lets you resell these altcoins for Bitcoins.
2/ Resell the altcoins against Bitcoins.
3/ Transfer the Bitcoins to a "broker" who lets you sell them for euros.
4/ Resell the Bitcoins for euros.
5/ Transfer the euros to your bank account
If purchasing cryptocurrencies seems, at first sight, somewhat like an obstacle course, it is really very quick and easy to start with cryptocurrencies; opening an account and making transfers takes less than 5 minutes. The longest (of everything that has been talked about here) is the time it takes to receive euros on your first cryptocurrency account.
If you have any questions, please feel free to ask them below this tutorial.
Firstly: first of all you need to be able to distinguish between platforms for purchasing cryptocurrencies and platforms for trading cryptocurrencies.
- Cryptocurrency purchasing platforms let you deposit euros or dollars to purchase major cryptocurrencies (Bitcoin, Ripple, Litecoin , Bitcoin Cash)
Examples of cryptocurrency purchasing platforms: Bitstamp, Coinbase, kraken, etc.
- Cryptocurrency trading platforms can only receive cryptocurrencies for the purpose of trading them for other cryptocurrencies (altcoins).These trading platforms offer a much larger panel of cryptocurrencies than purchasing platforms. Example of cryptocurrency trading platforms:Bittrex, Binance, HitBTC, etc.
Back to purchasing cryptocurrencies.It takes 4 steps to buy a cryptocurrency, apart from Bitcoin, then a 5th step to secure your purchase.I'm talking about buying any other cryptocurrency (e.g.:NEO, NAV, DASH, SUB, etc.)
Step 1 - Depositing euros on a cryptocurrency account:
You have a bank account in euros with BNP, Société Générale, whichever. And you want to buy cryptocurrencies.First you need to find a cryptocurrency purchasing platform that lets you deposit euros (or US dollars), so as to buy Bitcoin (BTC) or Litecoinsfirst :.A major cryptocurrency.
So you are going to open an account with BitStamp (or with CoinBase, or elsewhere). You are only asked to provide a copy of your passport or identity card, and proof of address.Then complete the email/telephone checks (so that you can be alerted of any activity on the crypto account). NB: for optimal security of your crypto account, remember to activate "two-factor authentication".
Opening your 1st crypto account is now completed. Let's move on to the euro transfer.
On BitStamp, simply go to "Deposit", then select "EUR Bank (SEPA)" and enter the amount of the deposit in euros.BitStamp then registers your deposit request, provides you with the accounts’ bank details which you useto transfer the euros, and the wording of the transfer (to be entered in the "wording" field of the transfer that is to be made from your bank account).
Important: the transfer’s wording enables the crypto establishment to identify the transfer, and then to fund your crypto account more quickly.
Information: it takes about 5 days to receive a euro transfer on a cryptocurrency account.But don't hesitate to contact the establishment's support desk if this deadline is exceeded.
Step 2 - Buying Bitcoins
Your euros are now on your BitStamp cryptocurrency account;but this establishment does not allow you to trade altcoins (other cryptocurrencies). Therefore you need to buy Bitcoins to transfer them to another crypto establishment.
Buying Bitcoins is quite simple at this stage. You click on "Buy/Sell",Bitstamp displays the Bitcoin order book (or the major cryptocurrency you are currently consulting on their site).You just have to carry out a simple transaction to buy Bitcoins against your euros.
Step 3 - Transferring to another establishment to purchase other cryptocurrencies
On BitStamp, you now own your first Bitcoins.To buy other cryptocurrencies, you have to go to another establishment (e.g.:Bittrex, Binance, etc.).
At this new establishment: open an account. It takes less than 5minutes. Then secure it with two-factor authentication access.
If it is Binance, then go to "Funds / Deposits-Withdrawal".And you can then see all the cryptocurrencies that you can deposit/withdraw.
If it's Bittrex, you go to "Wallets".The "deposit/withdrawal” system appears with "+ / -". To deposit, click on "+", to withdraw, click on"-".Here is a screenshot so that you can understand it better:
In both cases, go to the Bitcoin line (since you have to transfer Bitcoins from your BitStamp or CoinBase account to your Bittrex or Binance account), then select "Deposit".
The site automatically creates a “wallet” for you (a wallet to receive/transfer in this cryptocurrency).This wallet is presented as a simple address (sequence of numbers and letters).
Copy this address, then return to Bitstamp (or Coinbase, etc. Where you have your BitCoins); Select withdrawal, and specify the BitCoin wallet address provided by Bittrex (or Binance).
Confirm the transaction.It's sent!
For information:
You can track your Bitcoin transaction directly on the Bitcoin blockchain.
Important:
On some cryptocurrencies (e.g.:Ethereum) the transfer from "wallet" to "wallet" is carried out using a "smart contract".However, not all establishments necessarily agree to accept these “smart-contracts”.The risk is therefore to lose all the funds transferred in the blockchain; be careful!But in this case, the establishments can generally help you and intervene manually to recover the funds.
Important:
NEVER transfer a cryptocurrency to a wallet that does not accept that cryptocurrency. If you make this mistake, your funds will definitely be lost, your two crypto establishments will not be able to help you, and there is no solution.Example: you transfer Bitcoins to a NEO wallet by mistake.
Important:
If you are making your first transfers in cryptocurrencies, be sure to do what I call "test transactions" first.Do not send everything at once; first test a transfer with a small amount; then send the rest if the transaction has gone well.Do the same for the first euro transfer from your bank account.
Step 4 - purchase an altcoin
Your Bitcoins are now in the establishment (Bittrex, Binance or others) which allows you to trade a multitude of cryptocurrencies. These altcoins are generally bought and sold against Bitcoin (BTC), Ethereum (ETH), Tether (USDT), or NEO (NEO).
At first, you can only buy cryptocurrencies listed in Bitcoin (because you only have Bitcoins in your wallet). But you can very quickly switch your Bitcoins to Ethereum by going on the BTC/ETH pair (Bitcoin versus Ethereum).
To buy NEOs, for example, go to the NEO/BTC pair and buy NEOs against your BTCs.
Step 5 (strongly recommended) - Transfer altcoins to a private wallet
There we are! You've invested in the cryptocurrency of your choice. But there is one (recommended) "security" step left: transfer these altcoins to a private wallet, so as to protect yourself from a possible scam of your cryptocurrency establishment (which could close shop taking all its customers’ funds.)
To transfer your cryptocurrencies to a private wallet, there are numerous solutions. The most secure way, however, is to download the "private wallet" offered by the cryptocurrency in question.
Example: you have NEO, then go to the NEO website and download the NEON software. This software enables you to create a private wallet directly on your computer and then transfer your NEO (from any establishment). (See also: NEO to a NEON wallet)
Another example: you have NAVcoin, then go to the NAVcoin website and download NavCoin Core. This software enables you to create a private wallet directly on your computer and then transfer your NAVcoin to it (from any establishment).
NB: not all cryptocurrencies offer a "private wallet". Some cryptocurrencies should therefore be kept at the establishment of your choice, or on sites specialized in private wallets.
Transferring to a private wallet is identical to transferring encrypted money from one establishment to another; the private wallet software generates a wallet including a public address and a private address. The private address is to be kept secret, locally; it enables you to connect to your private wallet. The public address is the address to which you transfer your funds from Bittrex (or Binance, etc.)
To finish answering the question "How do I buy cryptocurrencies?” we need to talk about unwinding your position so as to transfer your funds to your euro bank account:
If you have an unrealised capital gain / loss on an altcoin, and you want to turn it back into euros, or stop trading in cryptocurrencies, you have to repeat the steps in reverse:
1/ Re-transfer the altcoins in your private portfolio to a "broker" who lets you resell these altcoins for Bitcoins.
2/ Resell the altcoins against Bitcoins.
3/ Transfer the Bitcoins to a "broker" who lets you sell them for euros.
4/ Resell the Bitcoins for euros.
5/ Transfer the euros to your bank account
If purchasing cryptocurrencies seems, at first sight, somewhat like an obstacle course, it is really very quick and easy to start with cryptocurrencies; opening an account and making transfers takes less than 5 minutes. The longest (of everything that has been talked about here) is the time it takes to receive euros on your first cryptocurrency account.
If you have any questions, please feel free to ask them below this tutorial.
