A True Step-by-Step Guide to Choosing and Buying Your First Crypto
I'm here to hold your hand through the process.
This article was originally published on the Women in Blockchain Talks website in early 2021. I’ve updated it to reflect my more recent education and experiences. I highly recommend checking out Lavinia’s work, as well as the WiBT community!
I’m just a woman who likes Twitter, can successfully propagate a pothos, and enjoys an evening of board games with friends. I don’t consider myself an evangelist, but I do believe that everyone can (and should) benefit from a little crypto in their lives.
I casually followed cryptocurrency activities starting in 2019, and I have always believed it could be more than a way to build gross amounts of wealth.
Cryptocurrency is a type of digital money, which usually has a mission, purpose for use, or ideology behind it.
But I waited for months to actually buy anything. I stalked around Telegram groups and subscribed to newsletters. Even after months of researching and learning, I just wasn’t confident I could buy crypto.
But after Lavinia Osbourne, Host and Founder of Women in Blockchain Talks, put it in plain words for me, and with the additional support of the Guapcoin community, I finally bought crypto at the beginning of 2021.
As someone who just entered the crypto space, I clearly remember how intimidated I was by the process. So I put together a step-by-step explanation to buying crypto so that you can join the ecosystem with confidence.
Disclaimer: I’ve worked with Guapcoin in a professional manner. I use Guap as my example to help you learn the different steps of buying crypto. I do not profit from writing about them here.
Step 0: Get familiar with what you want
Doing your own research is probably the hardest part of buying crypto. Unlike fiat currency, you shouldn’t just open an account and then transfer money into it.
Fiat describes currency that’s backed by a government, but not by a commodity (traditionally gold or silver). Its value is often determined by the strength of a nation’s economy.
For now, I’m not going to dive into all the details of the different types of wallets, coins, and exchanges (though I may do a separate article on each later on). But before you get the ball rolling, I recommend exploring your options.
The internet, however, is saturated with tech bros and pundits who seem to maintain unnecessary barriers to understanding any of it. Some resources I recommend:
Lavinia’s Wallets & Exchanges mini course in the WiBT community (membership required)
Eleonore Blanc’s monthly Crypto 101 course (free)
Naomi Brockwell’s Bitcoin for Beginners Youtube series
There are also numerous communities that are full of people who genuinely want to help others harness the power of decentralized finance (another post coming). And some altcoins have great communities around them and also have actual reasons to exist (as opposed to just being a meme):
Guap ($GUAP) focuses on the financial well-being of the global Black community
Dash ($DASH) focuses on fast crypto transactions in everyday life
Solana ($SOL) wants to be a fast, low-cost alternative to Ethereum
ZCash ($ZEC) focuses on private transactions
So what it really comes down to is: why do you want crypto?
Do you want to buy it as a store of value? Do you want to use it in everyday life? Are there specific projects with certain values that you want to support?
Crypto is such a great opportunity to truly vote with your currency of choice while also generating wealth over time. I recommend researching what each currency represents or accomplishes before making a decision.
But no matter what, you’ll probably need to buy some Bitcoin, Ethereum, or USDC to get started. You can buy some crypto directly with fiat (ex: USD, Euro, Yen), but you will most likely need one of those previously mentioned in order to buy another crypto.
Step 1: Set up all your necessary accounts
Once you figure out why you want crypto, there are a few types of accounts you need to set up before you can actually start buying, trading, and using it.
As a total noob, I recommend setting aside an hour or so. And make sure you have your phone and bank account information at hand!
A Crypto Wallet
First you need to download a wallet to store your crypto. You have options such as a mobile wallet, desktop wallet, or web wallet, but they all essentially function the same way.
You can think of as…well, your own wallet. Whether it’s plain leather or made from duct tape, it can hold dollar bills, U.S. quarters, euro coins, Czech koruna, and pesos all at once.
But crypto wallets can only old certain types of currency. So for every coin you want to purchase, you will need a wallet that can hold it. Some wallets will allow you to hold multiple currencies, while others may be limited.
The Guap wallet, for example, can hold Guap and Bitcoin. But wallets like Klever or Edge will let you hold even more. Whatever type of wallet you choose, it has to hold the type of crypto you want to buy.
If you choose to have a non-custodial wallet, make sure you have a pen and paper to write down all of your keys and passcodes. They will be long, random strings of letters and numbers, which helps keep your information and your money extremely secure.
Custodial means the platform or third party has ultimate control of your crypto. Kind of like how a bank can seize, freeze, or lose the money in your account.
Non-custodial means that you have ultimate control of your crypto. You can think of it as keeping of dollars in a safe in your home that only you can open.
Exchanges will have wallets (more on that soon), but because they’re custodial, you don’t have complete control of your crypto. Personally, I like having a small amount of crypto on an exchange, and the majority of it in a few non-custodial wallets. It may seem inconvenient, but I find the added security of a non-custodial wallet essential.
A Place to Buy Crypto
The next account you need to open is for a platform where you can buy crypto with fiat. CashApp is a popular option in the US, but as an EU resident, I chose to use Crypto.com.
You may have heard that Paypal allows customers to buy crypto. This is true, but as of early 2021, they do not let you move crypto out of your account. So once you buy crypto via Paypal, it either stays in the wallet or you spend it. You can’t exchange it or transfer it to another wallet.
The process to open a Crypto.com account requires a number of steps because of the Know Your Customer (KYC) and Anti-Money Laundering (AML) requirements, so be patient. Once your fiat bank account is connected, you can transfer fiat currency to the platform.
But Crypto.com doesn’t sell every altcoin, such as Guap. So I had to set up a third account on an exchange.
A Place to Exchange Crypto
Platforms like Coinbase, Gemini, and KuCoin allow crypto holders to purchase and trade different altcoins. But they don’t necessarily allow users to buy and exchange fiat for crypto (though that’s been changing since 2021).
I opened a Probit account because it was the only place I could purchase Guap with bitcoin. Opening my Probit account probably took the longest of all three accounts because of the number of KYC protocols. But once it was set up, I was ready to make my trades!
Many exchanges also offer additional benefits, such as staking or rewards programs. For the purposes of buying crypto for the first time, I recommend the following steps:
Find your crypto of choice on CoinGecko
Find where the crypto is traded
in browser: scroll down to “markets”
in app: tap “exchanges”
Open an account with an exchange that has a high “trust” score
This research will also show you what crypto you need in order to purchase what you want. For example, I can’t easily exchange $GUAP for $SOL as of early 2022. I’d likely have to exchange $GUAP for $BTC, and then $BTC for $SOL.
But more on that in a bit.
Step 2: Buy crypto with fiat
Once I had all my accounts set up, I transferred euros to Crypto.com, and then I purchased bitcoin!
A common misconception about crypto is that you have to buy one whole coin, but that’s not the case. You can buy fragments of a bitcoin or altcoin…to a certain extent.
I transferred €100 to my Crypto.com account so that I could purchase some bitcoin, but the minimum of fiat I was required to buy was around €25.
Once I bought some bitcoin, my Crypto.com account reflected my bitcoin balance.
Step 3: Exchange crypto for crypto
This is where things can feel complicated (if they haven’t already).
But keep in mind that crypto moves much faster than fiat. So while you might expect money to take two days to transfer from one bank account to another, crypto often transfers successfully within minutes.
In order to buy Guap on Probit, I had to transfer my bitcoin from Crypto.com to the exchange. But I had to initiate the process in Probit.
And remember: this process may look different depending on what type of crypto you want to buy and which platforms you use. But overall, these steps should still be the same.
In the Probit website dashboard, I clicked “Deposit” and selected which crypto I wanted to transfer to my wallet. When I selected bitcoin, Probit gave me a long thread of numbers and letters, which was the deposit address for my wallet. It also generated a QR code for me to scan via the Crypto.com app.
So I went to the app and opened my wallet. I selected “transfer” so that I could add an external wallet to withdraw bitcoin. From there, I scanned the Probit code and confirmed that I wanted to add the Probit bitcoin wallet to my account. When my Probit bitcoin wallet was verified, I transferred bitcoin from Crypto.com to Probit.
Once the currency is in the exchange wallet, you can start trading! On Probit, I searched the exchange for the crypto I wanted to buy, and then entered the amount I wanted to purchase with my bitcoin. And the transaction happened almost instantly!
Step 4: Transfer crypto to wallet
The benefit of storing your crypto in a wallet instead of keeping it in the exchange is that your wallet is (ideally) more secure. To transfer your crypto from the exchange to another wallet, you’ll go through similar steps as the “Deposit” process, but instead, it will be “Withdrawal.”
On Probit, I clicked on “Withdrawal” and selected the currency I wanted to transfer. After entering my Guap wallet’s receiving address and how much Guap I wanted to transfer, I confirmed my transaction, and the crypto was in my Guap wallet after a few minutes.
Why do YOU want crypto?
Finance as a whole can feel unapproachable and daunting, and with crypto being so new, it seems especially wrapped in even greater mystery. But with every step broken down in a transparent process, you can see that buying crypto is easier than you think.
Whatever your reasons are for buying crypto, I hope you choose a coin that’s important to you. Just like buying stocks, you can choose options that may be more stable than others, a crypto that align with your values, or a project you want to see grow.
No matter what, I hope you don’t find crypto intimidating and take the leap of faith to get involved!
Do you still have questions about this process? Is there something else you want me to cover? Let me know!