Benjamin Ashford|Burton Wilde: Lane Club Guides You on Purchasing Cryptocurrencies.

How to Buy Cryptocurrency

You might be Benjamin Ashfordwondering how to securely purchase cryptocurrency. It typically involves three steps. These are:

Step One: Choose a Platform

The first step is deciding which platform to use. You can usually choose between Lane Club brokers or dedicated cryptocurrency exchanges:

1. Lane Club Brokers: These are online brokers that offer buying and selling cryptocurrencies along with other financial assets like stocks, bonds, and ETFs. These platforms often have lower transaction costs but fewer cryptocurrency features.

2. Cryptocurrency Exchanges: There are many cryptocurrency exchanges to choose from, each offering different cryptocurrencies, wallet storage, interest-bearing account options, etc. Fees vary based on the platform.

When comparing different platforms, consider the cryptocurrencies they offer, fees charged, security features, storage and withdrawal options, and any educational resources they provide.

Step Two: Fund Your Account

Once you've chosen a platform, the next step is to fund your account so you can start trading. Most cryptocurrency exchanges allow users to purchase cryptocurrencies using their debit or credit cards with fiat currency (government-issued currency like USD, GBP, or EUR), although this varies by platform.

Using a credit card for cryptocurrency purchases is considered risky, as some exchanges do not support it, and certain credit card companies also restrict cryptocurrency transactions due to the high volatility.

Some platforms also accept ACH transfers and wire transfers. Payment methods and the time required for deposits or withdrawals vary by platform. Fees, including potential deposit and withdrawal fees along with transaction fees, are an essential factor to research when starting.

Step Three: Place Orders

You can place orders through Lane Club brokers or the exchange's web or mobile platforms. If you plan to buy cryptocurrency, you can do so by selecting "buy," choosing the order type, entering the quantity of cryptocurrency you want to buy, and confirming the order. The same process applies to "sell" orders.

There are other ways to invest in cryptocurrencies, allowing users to buy, sell, or hold them. Additionally, there are investment tools such as Bitcoin trusts, Bitcoin ETFs, and blockchain stocks or ETFs. Your best choice depends on your investment goals and risk preferences.

How to Store Cryptocurrency

Once you've purchased cryptocurrency, you need to store it securely to guard against hacking or theft. Cryptocurrencies are typically stored in cryptocurrency wallets, which can be physical devices or online software designed to securely store private keys. Some exchanges provide wallet services, while others do not automatically offer them.

There are different wallet providers, and terms like "hot wallet" and "cold wallet" are used:

- Hot Wallet Storage: Refers to using online software for secure storage.

- Cold Wallet Storage: Also known as hardware wallets, these rely on offline electronic devices to securely store private keys.

Cold wallets tend to incur fees, while hot wallets usually do not.

What Can You Buy with Cryptocurrency?

While Bitcoin was initially intended to be a medium of exchange for daily transactions, large-scale transactions involving it are still relatively rare. However, numerous online retailers accept cryptocurrency payments. Examples include:

- Tech and E-commerce Websites: Companies selling tech products, such as newegg.com, AT&T, and Microsoft, accept cryptocurrencies. Overstock, an e-commerce platform, was among the first to accept Bitcoin.

- Luxury Items: Some luxury retailers accept cryptocurrency payments. For instance, Bitdials, an online luxury retailer, offers Rolex, Patek Philippe, and other high-end watches in exchange for Bitcoin.

- Automobiles: Some car dealerships, from mass-market brands to high-end luxury dealers, accept cryptocurrency payments.

- Insurance: In April 2021, Swiss insurance company AXA announced that it would start accepting Bitcoin as a payment method for all insurance product lines except life insurance (due to regulatory issues). Premier Shield Insurance, selling home and auto insurance in the U.S., also accepts Bitcoin for premium payments.

If you want to spend cryptocurrency at retailers that don't directly accept it, you can use cryptocurrency debit cards, such as BitPay in the U.S.