What are the best ways to buy crypto in 2022?

by Arthur · September 7, 2022

Buying crypto is a much easier process than it was a few years ago; back in the day, people had to go as far as sending physical money across the country (or world) to score some BTC.

Today, buying crypto is as easy as registering with an exchange, going through the basic KYC (Know Your Customer) questions that exchanges must collect by law, plugging in your payment information, and buying the crypto you want. You don’t need a high degree of sophisticated crypto and blockchain knowledge to buy Bitcoin or any other coin.

When considering places to buy cryptocurrency today, consider the following factors:

Can you trust the stock exchange? The most popular exchanges today are reliable, but things can get a little shady if you explore the more unknown exchanges. Coinbase, Gemini, Kraken and UpHold are all solid options.
How many different types of cryptocurrencies does the exchange offer? Some exchanges only offer a few dozen, while others offer hundreds of cryptocurrencies.
What are the transaction fees?
Signup bonus offer? Why not make a little extra money by signing up for a platform you’ll use anyway? Don’t get too excited, most of these cost about $10 to $20 or so.

In this article, we will guide you through some of the easiest ways on how to buy crypto and how to store your money and keep it safe. The most common way to start is through a cryptocurrency service platform, such as a centralized crypto exchange; we will consider some.

Table of Contents

Before you buy crypto

The crypto market has thousands of different cryptocurrencies for buying, selling and trading. If you are starting your crypto journey, the vast majority are a hard mare.

Lesser known coins are subject to more extreme volatility and can be wiped out of the market in a flash. A large part of them can act as the flagship of unreliable and unknown projects that serve no real purpose for the sector besides becoming a get-rich-quick scheme. On the other hand, the top 10 currencies have the largest market values and the strongest societies.

How to buy crypto using a crypto exchange

One of the easiest ways to buy crypto is through a well-established cryptocurrency exchange, such as Binance or Coinbase.

Crypto exchanges allow users to buy, sell and trade digital assets. Some of these may have a broader display of products/services, such as staking, yield farming and crypto lending. But these companies are more aimed at experienced users as they convey a higher level of risk. For now, you should stick to more beginner-friendly exchanges like Coinbase.

Before opening an account with an exchange, make sure it has a solid reputation in the area. You can narrow down whether the platform is right for you by reviewing certain factors, including:

Safety: has the stock exchange been hacked before? What security methods does it use? Does it have insurance/have most assets in cold storage (storing funds offline to reduce the risk of cyber attacks)?
Fees: does the exchange have simple and transparent fees? Or rather a complicated fee structure or hidden costs? How competitive are these fees compared to others?
Supported Assets: This shouldn’t be a problem for beginners, but it’s good to know how many currencies the exchange supports since not all of them list the same assets.

Now that we have that in mind, it’s time to open your account.

All exchanges have different registration protocols, so the information you must provide varies. Typically, you’ll need to provide your email and full name, enter a password, and submit a government-issued document, such as a passport, social security number, or ID card, to verify your account.

After your account is fully verified (some exchanges require proper verification first to allow you to start placing orders), you need to connect a payment method.

You can link your bank account or use a credit or debit card (if the exchange supports their card deposits). Both options have an underlying transaction fee (some exchanges may charge a deposit fee), although wire transfers are usually cheaper than card deposits.

Once you have funds in your account, you can place a buy order. This process varies depending on the exchange. Generally speaking, most platforms will allow you to use your USD funds to buy Bitcoin, Ethereum or any other available crypto by simply entering the dollar amount you want to buy in crypto.

Some other exchanges, such as Kraken and Binance, present several buying options such as limit orders and market orders. The former allows you to place a buy order when the cryptocurrency hits a certain price, while the latter means you buy the asset at the current market price.

How to buy crypto with PayPal

PayPal allows users to buy crypto assets. You can buy crypto directly in-app using your PayPal balance, bank account or debit card linked to your PayPal account. Another way is to send money from an external wallet.

For example, you can send crypto from your Binance account to your PayPal account:

First, go to the Crypto Hub section of PayPal and copy the address from one of the available cryptocurrencies: Bitcoin, Ethereum, Bitcoin Cash and Litecoin.
Once you have chosen the currency you want receive, paste the address of Binance and confirm the transfer of tokens.

It’s the same process in reverse:

Head over to Wallet in your Binance account and click on Deposit.
Copy Binance address of the cryptocurrency you wish to receive.
Go to PayPal’s crypto section, select the asset you want to send, paste the Binance address, and click Send.

Note that PayPal generates a new address for each deposit. You can reuse an old address to send and receive crypto. However, it is not recommended due to privacy and security reasons. For example, since the blockchain is transparent, a hacker can know how many funds you have if you keep using the same address, who you often trade with, and more. So an attacker can try to steal your private keys using several hacking methods.

Alternative ways to buy crypto

There are a few ways to buy Bitcoin or other cryptocurrencies besides cryptocurrency exchanges and payment processors.

P2P (peer-to-peer) marketplaces are a popular way to buy Bitcoin, but without the anonymity of decentralized exchanges. On a P2P marketplace like LocalBitcoin, users can choose from a list of buyers and sellers and choose the person they want to trade directly with.

Another method is to buy crypto through online brokers such as eToro and Robin Hood. But keep in mind that some brokers that support crypto may not allow you to send your funds to an external wallet. This means that your broker holds the private keys – a secret alphanumeric code that proves ownership of an asset – to your cryptographer and not you. This poses a risk – no matter how secure your broker, centralized or decentralized exchange is, they are always subject cyber attack. We will expand on this point in another part.

Store crypto safely

If you bought Bitcoin or crypto, the best security practice is to store them outside of any institution or protocol. Crypto wallets are usually the way to go, but it’s a good idea to distinguish between a hot wallet (online) and a cold wallet (offline).

Hot wallets (software wallets) connect to the internet via devices such as smartphones or computers. They are convenient to buy, sell, exchange and store crypto assets directly on your phone or PC as they generate the private keys in these devices. However, hot wallets require the implementation of a number of security protocols since they pose several risks. For example, your phone, computer or tablet is stolen, hacked or lost 2) the hot wallet suffers a security breach and your funds are compromised.

Cold wallets (hardware wallets) are small devices similar to a pen drive that do not need an internet connection to store crypto. Therefore, they are usually considered the safest method to protect crypto and stay far away from cyber attacks. Some popular options are Trezor and Ledger, the leading hardware wallets on the market.

Remember the old crypto adage: not your keys, not your coins.

Final thoughts: How easy is it to buy crypto?

If you are new to the crypto space and want to get your hands on a cryptocurrency, you may feel overwhelmed by the number of crypto assets and the technical jargon in the market. But it is much easier than it seems. As we said earlier, you don’t need a high level of knowledge about all things crypto – just some basic guidelines to start your crypto journey.

Whether you choose to buy Bitcoin or another coin, you should always research the exchange or platform. Ask yourself:

Does the company allow you to send your money to external wallets?
Has it been hacked before?
Do they offer cold storage or do they utilize industry standard security protocols?

It is important to learn how to use a hardware wallet as it can help you in the future if you decide to move your money offline.

Frequently Asked Questions (FAQ)

Can I buy crypto with a credit card?: Buying with a credit card is the same as using a debit card or ACH transfers. Simply enter your credit card information and authorize the transaction. But not many exchanges allow users to buy crypto using credit cards since card transactions are more expensive as they have more underlying processing fees that the platform passes on to you.

Is cold storage better than hot storage?: software wallets, although they can run multiple security protocols to protect your account, are always at risk of falling to sophisticated hacks and other types of attacks that can compromise users’ funds. Hardware wallets provide a higher level of security as they are far from cyber attacks.

Why is it not recommended to buy lesser-known assets?: If you’re new to the crypto space, you’re exposed to several risks: people peddling worthless tokens, scammers trying to lure you into Ponzi schemes, and more. Most people in the crypto industry will advise you to go with the projects and cryptos that already have a proven record of transparency in the space, and have a product/service that brings something valuable to the industry rather than just get-rich-quick marketing strategies.

What are some of the most trusted cryptocurrencies on the market?: By finding the previous question, you can find a diverse library of cryptoassets trusted by the crypto community at large. Some of them are:

Bitcoin (BTC)
Ethereum (ETH)
Cardano (ADA)
Solana (SOL)
Binance Coin (BNB)
Polygon (MATIC)
Avalanche (AVAX)
Aave
Polka dot (DOTS)

What are the best exchanges to buy crypto from?: There are several cryptocurrency exchanges with a solid reputation in the industry, such as Binance, Kraken, Coinbase, OKX, Gemini and Huobi.