Tutorial -How to Select & Buy Cryptocurrencies

Nowadays, there are thousands of different digital currencies. All coins and tokens are regarded as cryptocurrencies.

Explaining Coins and Tokens

Alternative coins (altcoins) refer to coins alternative to Bitcoin. The great majority of these projects are based on Ethereum's protocol (ERC20), or on Bitcoin’s protocol and are Bitcoin forks. A fork means a change in the underlying software protocol which can lead to the split of the original block-chain. Tokens are not coins and represent a particular asset or utility. A token can represent any tradeable asset, such as services and tangible/intangible commodities. Investors can trade Coins and Tokens using the same account on a crypto exchange.

This tutorial includes:

(i) How to Choose Cryptocurrencies

(ii) How to Choose a Cryptocurrency Exchange

(iii) How to Buy Cryptocurrencies using Cash

(iv) Cryptocurrency Exchanges that Accept Cash

 

(i) How to Choose Cryptocurrencies

Choosing cryptocurrencies is the same as choosing stocks.

1. Calculate the Total Capitalization

Before you buy anything, you must first find out how much it is worth. The capitalization figure derives when multiplying the current price ($) by the number of total coins/tokens (MAX SUPPLY).

□ Capitalization ($) = Max Supply X Current Price ($)

Keep that figure in mind because you will need it later.

2. Determine the Necessity of the Project

Visit the website of the cryptocurrency and try to answer the following questions:

-Why did someone create this Coin/Token?

-Is it useful -Does it solve some major problems?

-Is it useful to many people or to a few?

-Is this cryptocurrency project unique, are there any other alternatives solving the same problems?

-What is the current phase of the project (road map)? (creating period, beta period, full launching)

3. Find Out who is Behind the Project

This is maybe the most important aspect of an investment, any investment, real or digital. When investing in stocks they say that the best opportunities come from companies that have a bad balance sheet and good management. Good management will provide the best probabilities for the project’s long-term success. Any project that respects itself must present a full team on the official website. The questions emerging at this point are the following:

-Is there a team on the website that will have full names and detailed information?

-Where this team comes from?

-Are they experts on their job?

-Have they been involved with other projects in the past?

4. Find Out what Internet Users Say About this project

It is always useful to check what others have to say about something. Don’t focus entirely on reviews as a great number of reviews is fake in the internet. Focus on Crypto-forums where the users are validated by the community.

-Bitcointalk.org (the best for the job)

5. Use Smart Metrics to Estimate the Fair Value (Capitalization)

The best way to estimate the fair value of a project is by using empirical metrics. Why? Simply because most people don’t do it, and that means you can look ahead of the market.

Here are some smart metrics:

(a) Create a Volume/Capitalization ratio and compare different cryptocurrencies

□ Ratio = Monthly Volume ($) / Capitalization (Circulating Supply)

The greater the ratio the better. You can use this ratio to compare multiple digital currencies.

(b) Use Internet Metrics (Alexa)

Check the current Alexa ranking, and compare it with the ranking before 12 months, and then 6 months.

(c) Use the Google Keyword Planner

Check how many enquires are made for particular keywords including this project

(d) Use Social Media Metrics (Facebook, Twitter, etc.)

 

(ii) How to Choose a Cryptocurrency Exchange

There are tens of available crypto exchanges allowing their clients to buy, hold, and sell coins and tokens. There is a great number of factors determining the best choice. Don’t forget to make sure that your country is accepted by a Crypto-Market. After you ensure your country’s acceptance, these are some key aspects of evaluating crypto exchanges.

1. Available Crypto-Coin Asset Index

Most crypto exchanges offer exclusively a small number of coins, this usually includes Bitcoin, Ethereum, Ripple, Litecoin, etc. Therefore, the first step is to make sure that some exchanges offer the coin/token you want to buy/sell.

The easiest way to do this is by visiting the coin/token website or by locating the coin/token on the CoinMarketap.com website and then clicking on available markets.

2. Available Deposit/Withdrawal Methods

You need to make sure that the available funding methods suit your needs. Otherwise, it will be a complete waste of time to keep reviewing and gathering information about a particular cryptocurrency market.

3. Crypto-Market’s Reliability and Safety

When you are trading online, you need always to consider the safety of your money and avoid potential scams. These are some key aspects of ensuring safety:

(i) Where is the Market Headquartered? (Western Europe and the United States are generally more safe choices)

(ii) Is there any authority regulating that market?

(iii) When did this exchange start operation?

(iv) Are the coins kept safe offline? (where hackers can’t reach)

(v) Is there a 2FA (2-factor authentication) and an email verification security?

(vi) What do other users say about this market?

3. Funding Fees and Trading Fees

The cryptocurrency exchanges make money by charging funding fees and transaction fees. Make sure you are aware of what you are paying.

-Transaction Fees

Most exchanges charge 0.25% to 0.50%.

-The Spread Between Ask/Bid

The spread is a ‘hidden fee’ and may prove significantly large if you trade non-popular coins.

-Funding Fees

Usually depositing crypto is free but there may be significant fees (up to 5.0%) when you are depositing real cash. The same goes for withdrawing cash or coins.

4. Customer Support Quality

Responsive customer support means a customer-oriented internet business. Good support can save you a lot of time and provide the sense of having a good and reliable partner who is there for you when you need him.

 

 

(iii) How to Buy Cryptocurrencies using Cash

Not all cryptocurrency markets accept cash. That means that in order to buy an altcoin you have two choices:

-Find a crypto-exchange that converts cash to that particular crypto

-Buy Bitcoin, and then convert it to an altcoin in the same or another exchange

After you have found an exchange that allows you to deposit via your desired fund method you have to open an account and verify it. This is usually an easy process.

Step-by-Step

Step-1: Open an Account with a Crypto-Exchange

(a) email verification

Step-2: Verify your Account

(b) Mobile phone verification

(c) Identity proof (ID or passport)

Step-3: Deposit Some Funds

If real cash deposits are allowed by a crypto market, you will be able to use Bank Wire. Additionally, many exchanges allow credit/debit cards. Only a few crypto exchanges allow internet wallets (Skrill, Neteller, Paypal, etc.).

As concerns the allowed currencies, the United States Dollar (USD) is the standard FIAT currency to convert. Some exchanges allow also Euro and the British Pound (GBP).

Step-4: Buy some Crypto

Make sure you are aware of the total cost you pay. Do the calculation yourself before clicking on execution.

Step-5: Store Your Cryptocurrencies

 

There are several options for storing cryptocurrencies:

a-You can keep them in the Exchange (this is the best choice if you have invested small amounts of money in several different altcoins)

b-You can store your cryptocurrencies in a Software Wallet (even transfer your wallet on several USBs to avoid the hacking risks)

c-You can store your cryptocurrencies in a Hardware Wallet (like Trezor or Ledger)

The choice (a) is better for those investing small amounts in many different altcoins. The choices (b) and (c) are the best for those who have invested a lot of money, and hold one or two different altcoins.

 

(iv) Cryptocurrency Exchanges that Accept Cash

This is a list of Bitcoin exchanges that allow the conversion of cash to cryptocurrencies.

 

 

EXCHANGE	TRADING CRYPTO	PLATFORM	OPENING ACCOUNT	WEBSITE
■ TYPE: SPOT | P2P | MARGIN TRADING ■ WALLET: COLD STORAGE & HOT WALLET ■ HEADQUARTERS: CAYMAN ISLANDS ■ ONLINE SINCE: 2013 ■ LANGUAGES: ENGLISH & 14 MORE LANGUAGES ■ SUPPORTED COUNTRIES: 130 (+) ACCEPTS US AND CANADA TRADERS	TRADING COST: Starting fees: Maker: 0.2% / Taker: 0.2% Lowest trading fee: Maker: 0.065% / Taker: 0.025 FUTURES MARKET Starting fees: Maker: 0.050% / Taker: 0.075% Lowest trading fee: Maker: 0.030% / Taker: 0.075% CRYPTO LENDING Starting at 18% gets as low as 5.4% ■ FIAT CURRENCIES: EUR, USD, GBP, AUD, KRW, and JPY	TRADE PLATFORM: P2P transactions through its “push transaction” operation Margin Trading Futures & Options Staking Crypto Leveraged ETFs Supports crypto Lending & Borrowing Cloud mining capabilities Copy-trade NFTs Big-Data Analytics ASSET INDEX: □ 200 Digital Assets	FUNDING AND FEES: □ Cryptocurrencies □ Cards (MasterCard/VISA) □ Bank Wire   Fees: □ Not charging deposit fees □ Fees on withdrawal may occur. UNVERIFIED ACCOUNT LIMITS: Verification is needed	Support: Live Chat | eMail | Tickets   Gate io Exchange:   ► GATE IO REVIEW
■ TYPE: CRYPTO MARGIN TRADING ■ WALLET: COLD WALLET ■ HEADQUARTERS: ANTIGUA AND BARBUDA ■ ONLINE SINCE: 2019 ■ LANGUAGES: ENGLISH & 11 MORE LANGUAGES ■ SUPPORTED COUNTRIES: MOST COUNTRIES (NO US)	TRADING COST: Starting fees: Maker: 0.02% / Taker: 0.07% Lowest trading fee: Maker: 0.00% / Taker: 0.04 ■ FIAT CURRENCIES: USD, EUR, GBP, AUD, and CAD Visa and Mastercard	TRADE PLATFORM: Advanced charting capabilities (11 different chart types in 13 timeframes) 100+ built-in indicators Order Book and market trades A full set of trading orders ASSET INDEX: □ Hundreds of different crypto pairs □ 200+ Perpetual Contracts (Futures) □ 100+ other leveraged crypto products □ 15 Volatility Tokens □ 100+ Stock Tokens □ Prediction markets	FUNDING AND FEES: Depositing Funds: □ Cards (MasterCard/VISA) □ Bank Wire □ Cryptocurrencies Fees: □ Not charging deposit/withdrawal fees   UNVERIFIED ACCOUNT LIMITS: Verification is needed	Support: eMail | Tickets   FTX Crypto Exchange:   ► FTX REVIEW
■ TYPE: CRYPTO MARGIN TRADING ■ WALLET: COLD STORAGE ■ HEADQUARTERS: SAINT VINCENT AND GRENADINES ■ ONLINE SINCE: 2018 ■ LANGUAGES: ENGLISH & 15 MORE LANGUAGES ■ SUPPORTED COUNTRIES: 150	TRADING COST: □ 0.05% basic fee for all cryptocurrencies OVERNIGHT RATES (Long/Short) BTC (0.04166% Daily Funding Rate) ETH (0.05555% Daily Funding Rate) LTC (0.06944% Daily Funding Rate) EOS (0.075% Daily Funding Rate) XRP (0.0833% Daily Funding Rate) ■ FIAT CURRENCIES: NO	TRADE PLATFORM: Fully customizable and highly secured 2 mobile apps 100:1 trading leverage A full set of trading orders ASSET INDEX: □ BITCOIN (BTC) □ ETHEREUM (ETH) □ RIPPLE (XPR) □ EOS (EOS) □ LITECOIN (LTC)	FUNDING AND FEES: □ Low fees □ For the time, PrimeXBT only accepts bitcoin deposits □ The minimum deposit is .001 BTC   UNVERIFIED ACCOUNT LIMITS: Verification is needed	Support: Live Chat | eMail | Tickets   PrimeXBT Exchange:   ► PRIMEXBT REVIEW
■ TYPE: SPOT & MARGIN TRADING ■ WALLET: YES ■ HEADQUARTERS: MALTA & THE CAYMAN ISLANDS ■ ONLINE SINCE: 2017 ■ LANGUAGES: 40 LANGUAGES ■ SUPPORTED COUNTRIES: 180	TRADING COST: □ 0.02% to 0.1% spot trading fees MARGIN TRADING: YES AVAILABLE ORDERS: Market orders Limit orders (Stop-limit, trailing stop) Post only orders OCO (one-cancels-the-other) P2P (peer-to-peer) orders ■ FIAT CURRENCIES: 40 FIAT currencies	TRADE PLATFORM: Advanced charting capabilities with Hundreds of built-in indicators and 15 timeframes Full market-depth Rewards and Staking Margin trading API key for integrating other software tools ASSET INDEX: □ Trade 590+ crypto pairs □ Trade leveraged products (Futures, Options) □ Stock Tokens (trade stocks as crypto tokens)	FUNDING AND FEES: □ Low fees □ DEBIT/CREDIT CARDS: 3% to 4.5% (VISA/MASTERCARD) □ BANK WIRE: Free SEPA transfer / $15 for US wire transfer   UNVERIFIED ACCOUNT LIMITS: Verification is needed	Support: Live Chat | eMail | Tickets   Binance Exchange:   ► BINANCE REVIEW
■ TYPE: P2P BITCOIN EXCHANGE ■ WALLET: YES ■ HEADQUARTERS: FINLAND ■ ONLINE SINCE: 2012 (LocalBitcoins Oy) ■ LANGUAGES: ENGLISH | SPANISH | FRENCH | PORTUGUESE | RUSSIAN | ITALIAN ■ SUPPORTED COUNTRIES: 248 COUNTRIES	TRADING COST: □ 1.0% on the Selling Side □ 0.0% on the Buying Side -Free for inside-the-market transactions -Fees for external transactions ■ SPREAD: P2P (VARIABLE) ■ FIAT CURRENCIES: All Currencies (No Restrictions)	TRADE PLATFORM: -P2P Trading -LocalBitcoins require no identification -Transactions protected by an escrow service -Conflict Resolution Center -SMS and email alerts ASSET INDEX: □ Only Bitcoin (BTC)	FUNDING AND FEES: □ BANK WIRE □ CREDIT/DEBIT CARDS □ PAYPAL □ SKRILL □ WESTERN UNION □ MORE METHODS (IF A 'TRADER' SUPPORTS THEM) □ COINS (Depositing Free / Withdrawing $10-$20) UNVERIFIED ACCOUNT LIMITS: NO NEED TO VERIFY	Support: eMail | Forum   LOCALBITCOINS:   ► LOCALBITCOINS REVIEW

 

 

►Compare all Crypto Exchanges

 

□ Tutorial -How to Select and then Buy Cryptocurrencies

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