How and where to buy cryptocurrencies

Only 10% of the population has heard of cryptocurrencies. Despite this, the market capitalisation of cryptocurrencies rivals that of the Silicon Valley giants - the market is growing rapidly - in 2021, as many as 221 million people were using cryptocurrencies. Every year, the number of users doubles! Join the cryptocurrency community - read and find out how and where to buy cryptocurrencies.

What is a cryptocurrency?

Digital money, an investment asset, a means of payment and, in the case of Bitcoin, a means of storing purchasing power. The most common values of cryptocurrencies are decentralisation and anonymity.

The most common, because the cryptocurrency market is rich in projects. According to sources, there are over 12,000 projects! Each of them has its own vision of the future, different views, values, functionality and philosophy. The first cryptocurrency to go mainstream - Bitcoin - uses blockchain technology, which is the most popular technological solution among cryptocurrencies.

Remember that every cryptocurrency, if it uses blockchain, has its own chain with specific parameters. There are cryptocurrencies that use other solutions that compete with Blockchain, like IOTA, which uses DAG - Directed Acyclic Graph. There is also XRP, which uses a distributed consensus ledger instead of the traditional blockchain, which uses a dedicated network of confirmation servers.

Where to buy cryptocurrencies?

How to buy cryptocurrencies? The number of platforms to choose from is huge, any ranking of cryptocurrency exchanges or exchange offices will show you the true wealth of cryptocurrency market offers. How to choose the best platform?

First, gather the most important information about the cryptocurrency exchange or exchange:

  • Enforcement in local law (state licence or opinion of local financial institutions);
  • The seat of the platform, the seat of the personal data controller and who administers the data - the absence of such data usually indicates a fraudulent platform;
  • What are the commissions on the platform, what deposit and withdrawal methods;
  • Do I find the desired trading pairs and specific functionalities on the platform.

With this basic information you will be sure that the platform is safe and even made for you. Now it's time to create an account and verification, after which you will smoothly move on to buying cryptocurrencies.

How to buy on a cryptocurrency exchange?

Cryptocurrency exchanges are a very popular destination for investors - they are becoming more intuitive every year, making it quicker for new investors to find their way around the cryptocurrency world - but not immediately.

How to buy cryptocurrencies on an exchange?

  1. Create an account on the cryptocurrency exchange of your choice (for example, Bitclude);
  2. Verify your identity (Account verification is essential, without it you will not be able to trade cryptocurrencies or deposit fiat currency);
  3. Deposit funds on the platform;
  4. Now you are ready to buy cryptocurrencies! - Go to the exchanges tab;
  5. Make an offer to buy cryptocurrencies - specify quantity and price (you can also sell cryptocurrencies at market price using instant or market options);
  6. Your cryptocurrency wallet on the exchange is thicker by the funds from the completed offering!

If you are impatient, have not used the stock market before, and are afraid to try - use another, simpler solution, which you will read about below, and only then start trading on the stock market.

How does a cryptocurrency exchange work?

On a cryptocurrency exchange, you won't always complete your order immediately, not at all because there's been an error - on exchanges, you trade with other virtual currency traders who also place bids at their prices. As long as two bids don't meet, the transaction won't go through.

Cryptocurrency exchanges provide valuable tools like Take Profit and Stop Loss to help investors sleep soundly. By configuring a Stop Loss you will minimise your losses by declaring its acceptable level at which a sell offer will automatically be issued.

The exchanges also offer financial services, the use of which involves a high risk of losing money quickly, a risk that is far higher than cryptocurrency trading, most often occurring because of the leverage applied to CFDs, which are complex investment instruments.

How to buy at a cryptocurrency exchange?

Cryptocurrency exchange offices are the most popular and simplest way to exchange fiat currency for virtual currencies. Buying Bitcoin at a currency exchange only requires a few steps - which ones?

  1. Register an account with a cryptocurrency exchange;
  2. Verify your identity;
  3. Deposit funds by bank transfer, BLIK code or credit card;
  4. Once the funds are credited - you will be ready to buy cryptocurrencies.

Kantor Bitclude provides a unique opportunity to withdraw in cash - not through bitcoin ATMs (bitcoin cash machines) or stationary cryptocurrency exchange offices, but using traditional ATMs!

How does a cryptocurrency exchange work?

In an exchange, users trade among themselves, while in a cantor, cryptocurrencies are traded between the user and the cantor operator. Exchanges in a cantor are carried out at rates set by the operator, with a marginally higher commission than on an exchange. In return, users receive an instant exchange of their cryptocurrencies - on an exchange you may not complete a Bitcoin purchase in a second - a cantor can do this.

Where to keep your purchased cryptocurrencies?

Whether you buy Bitcoin, Bitcoin Cash, Ethereum or Ripple - keep your funds safe. Holding cryptocurrencies on exchange platforms is not the optimal way. You need a cryptocurrency wallet!

Wallets come in different types - digital and physical.

The physical ones - hardware wallets - belong to the cold wallet family and are the most secure way to store cryptocurrencies. The security of this family of wallets comes from their optional connection to the network.

Before the user can transfer funds from the hardware wallet, it must be connected to an external device (computer or phone). Only then will the wallet be online and gain the ability to transfer funds.

The alternative to cold wallets are hot wallets. As you may have guessed - these are permanently connected to the web. This family includes mobile, web and desktop wallets.

One of the first and oldest cryptocurrency wallets is Bitcoin Core, which originated as a native Bitcoin wallet. It is a full wallet that acts as a full node and synchronises all the blocks from Bitcoin's blockchain in the device's memory.

Is it worth buying CFDs on cryptocurrencies?

How do CFDs work? CFDs are contracts for the difference in price between an asset and a trader speculates on the price - you can make money when the price goes up or down.

But is make money the right word?

Even in their advertising, brokers point out the very high risk - as a result of CFD trading - up to 70% of retail investors' accounts see losses!

Is it possible to make money from cryptocurrencies?

Cryptocurrencies represent a multitude of opportunities. They can bring monetary losses, but they will also allow you to make money. Let me tell you about two ways:

  • Staking - some cryptocurrencies rely on a PoS protocol that allows users to earn passive income. Choose a cryptocurrency that allows staking, deposit in the right place and earn money from confirming transactions - without spending valuable time;
  • Trading - traders trade cryptocurrencies in many ways. They make many smaller trades throughout the day, buy for a week, a month, a year... The most ardent among traders are the Hodlers - people who fiercely wait for their cryptocurrency to reach their dream price. What type of trader are you?

A tax on cryptocurrencies?

Getting rich means only one thing - tax. When you make money from cryptocurrencies, the situation is not complicated, you will only have one tax to pay and only once a year - when you file your PIT.

For cryptocurrencies, a PIT-38 is provided which takes into account capital gains. The deductible cost must be subtracted from the income and a tax of 19% must be paid on it, which is commonly referred to as the Belka tax.

Remember that you can only account for revenue derived from cryptocurrencies with revenue derived from the same source - that is, only with other cryptocurrencies. The same applies to accounting for expenses and accounting for the difference between income and expenses. You also cannot account for cryptocurrencies as part of your business, because cryptocurrencies as cash capital are a separate source of revenue.

Even if you didn't sell cryptocurrencies in a given year, but only filled your wallet by buying more, you should also show this in your PIT - showing zero income, but also deductible expenses incurred in the tax year - that is, the amount you invested in cryptocurrencies in the tax year.

A tax on cryptocurrencies?

There is a fierce debate between investors about which asset will cope better with the passage of time. Gold, stocks, real estate, bitcoin, cryptocurrencies...

Comparisons are most often made between Bitcoin and gold, but the discussion is not about their potential for growth (at least not in the case of gold), but about their ability to store value over time. Gold is a well-known store of value (Store of Value) for millennia.

Barely a teenager - 12 years old - the digital currency also aspires to SoV. The biggest proponent of Bitcoin's recognition as a store of value that is even better than gold is Michael Saylor - CEO of MicroStrategy and one of Bitcoin's biggest whale-haters.

Cryptocurrencies for speculators?

Bitcoin or Ether are huge and increasingly vulnerable to speculation, but there are more than 12,000 cryptocurrency projects on the market - which have completely low capitalisation, vulnerable to speculation by big capital.

Dynamic price volatility encourages speculators to enter the cryptocurrency market. Gigantic changes in the exchange rate in a short period of time are the hallmark of digital currencies.

However, this was not the premise of Bitcoin. Newer projects also had different goals and values. A technological transformation, a revolution of many sectors. Bitcoin was intended to be merely a means to transfer funds globally, cheaply and instantly, and it has a history of multiple uses - transferring funds, speculation and storing purchasing power over time.

Summary

Cryptocurrencies, in their short - 12-year - history, have become an essential part of the finance market - one of the vessels to which investors will migrate in increasing numbers as an alternative to the stock market.

Compared to the Silicon Valley giants, 2021 Bitcoin is only twice the size of Apple or Microsoft - does the digital giant stand a chance of catching up with them? Buy Bitcoin and find out today!

Start your trading journey right here!

...or just keep calculating prices

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