Buying crypto can be exciting. However, this comes with an extra cost of risk. First thing investors should pay keen attention to first, is steps to protect their assets and personal information. This guide provides a step-by-step guide on how to purchase your first crypto asset safely.
Learn how to choose a trusted exchange, set up a secure wallet, enable two-factor authentication and complete identity verification. It also covers funding your account, how to make your first purchase, transferring assets to a private wallet and above all, avoiding scams. By following this guide, you can confidently enter the world of digital assets while keeping your investments secure.
Estimated reading time: 7 minutes
Table of contents
1. Choose a Reputable Crypto Exchange
A crypto exchange refers to any platform where one can buy or sell digital assets.
- Use trusted platforms: One is required to select an exchange that is well-established and one with a strong reputation. Binance, Coinbase and Kraken are some of the top and most trusted crypto exchanges. In order to protect their users’ funds, each of these platforms follows strict security measures. Also, they make sure to comply with regulations in the countries where they are operating.
- Compare fees: One key thing to take note of is their transaction fees before signing up. Whether for withdrawals, deposits or trading costs. Some exchanges charge higher fees but offer instant purchases in return while others offer lower fees but require bank transfers.
- Check payment options: Make sure to check and ensure the platform supports the preferred payment methods. Some accept credit cards, bank transfers or PayPal while others only allow crypto deposits.
- Security. Always choose an exchange with multiple security features. Look for two-factor authentication (2FA), withdrawal whitelists and encryption. At the same time, avoid unknown exchanges that lack transparency. Check for licensing and regulatory compliance to avoid risks. Also, read user reviews to check for customer complaints or security breaches.
2. Set Up a Secure Wallet
A crypto wallet is where digital assets are stored and every crypto owner needs one to keep their funds safe.
- Choose a wallet type: Wallets come in two types – hot wallets and cold wallets. Hot wallets connect and store crypto on the internet while cold wallets store crypto offline. Hot wallets are easy to use in comparison to cold wallets. However, cold wallets are more secure.
For long-term storage, one is advised to use a hardware wallet such as Ledger or Trezor. These wallets protect digital assets from hacker attacks. For quick transactions, however, it would be good to make use of software wallets like MetaMask and Trust Wallet. One is advised to pick one among the options according to their needs and preferences.
- Back up recovery phrases: The number one thing every crypto owner should do is to always back up the wallet’s recovery phrase. It is advisable to write it down on paper, store it safely and to not share it with anyone. Whenever access to the wallet is lost, the recovery phrase is the only way to retrieve funds.
- Enable extra security: Enable security features like biometric authentication and strong, unique passwords.
- Enable extra security: Do not keep large amounts of crypto in a software wallet. Transfer long-term holdings to a hardware wallet.
3. Enable Two-Factor Authentication (2FA)
Two-factor authentication (2FA) adds additional security. It involves a second verification before one can access an account. Most exchanges and wallets support 2FA. One more step to stay safe is to enable it immediately after signing up.
- Install an authenticator app: The best 2FA solution is an authentication app such as Google Authenticator or Authy. For authentication, these apps will produce temporary codes.
- Avoid SMS verification: SMS based 2FA is less safe than others, because hackers can intercept messages. So you should, of course, avoid them in any case. Do not share your 2FA codes with anyone, as scammers tend to ask for those to steal funds.
- Keep backup codes safe: These help in recovering your account if you manage to lose access to the 2FA app. Update the security settings regularly and use biometric authentication like fingerprint or face recognition if possible.
- Always verify login attempts: In case of unexpected login alerts, immediately change the password, be aware of phishing attempts and fake websites.
4. Verify Your Identity (KYC Process)
In most cases, Know Your Customer (KYC) verification is needed before you can get them. It is a process of confirming your identity before making any kind of transactions. It prevents fraud and money laundering.
- Provide valid details: Register with your true name and other valid details. You will be asked to upload a government issued ID like a passport or a driver’s license. Some platforms have a request for proof of address such as a utility bill. Follow the exchange’s instructions carefully. Typically, verification takes one or two hours to a few days. Some exchanges have instant verification while some take a little longer.
- Upload through the official site: Do not provide personal documents to unknown sources. Impersonating exchanges is a common act of scammers who steal information from users. It is advised to always upload files through the official platform website.
- Complete verification for full access: You can have access to the platform after verification. You can deposit, withdraw and trade higher amounts. Some exchanges limit non-verified accounts. If need arises, change your account details regularly.
- Always use secure internet connections: Uploading sensitive information should be done only over secure internet connections.
5. Fund Your Account Securely
- Pick a payment method: Once verified, choose a payment method and deposit money into your exchange account. You have a decision to choose a payment method that you like. Bank transfers are safe but take longer. Credit cards are faster but may include higher fees. PayPal and third-party payment services are also accepted by some platforms.
- Check transaction fees: Some exchanges charge a percentage-based fee while others offer free deposits but higher withdrawal fees.
- Use secure networks: Don’t send funds on public Wi-Fi networks. Your financial details can be intercepted by hackers.
- Double-check deposit addresses: Scammers create fake websites that look identical to real exchanges. Always verify URLs and domain names before logging in and use secure passwords for your banking and exchange accounts.
6. Buy Your First Cryptocurrency
After you’ve funded your account, buying crypto is quite easy.
- Start with major coins: First of all, start with main coins such as Bitcoin or Ethereum.
- Use limit orders: Instead of using market orders, you can use limit orders for precision and to avoid paying high prices.
- Check fees: Know the exact cost of your transaction.
- Confirm purchase details: Make sure to confirm everything before you complete the final pull of the trigger on the purchase.
7. Transfer Crypto to Your Wallet
- Withdraw to a secure wallet: Never leave a large quantity of crypto on an exchange because hackers target exchanges the most.
- Use the correct wallet: Copy and paste your wallet address carefully. Lost funds are a result of small mistakes. Utilize QR codes to cut down errors when moving crypto. Right before you confirm the transactions, double-verify the recipient address.
- Select the correct network: Some cryptos support multiple blockchain networks. Selecting the wrong one can cause permanent loss.
- Check withdrawal fees before transferring: Some networks have charges that are higher than those of others. Confirm the transfer only after verifying all details.
- Enable notifications: This enables you to monitor your transfers and get alerted of any unauthorized activity.
- Keep your wallet software up to date with the latest version: Regular updates fix security vulnerabilities and improve performance.
8. Stay Alert and Avoid Scams
- Beware of phishing websites: They behave similarly to real exchanges. Stay cautious by all means possible to protect your assets. Enter the login details only on a legit URL.
- Avoid fake giveaways: No legitimate offer will ask you to send money first. Scammers use these tricks or fake testimonials to lure victims. Before you invest in any project, make sure you consider doing research first.
- Don’t share private keys or recovery phrases with anyone: Scammers act as customer support agents to steal user credentials. Always verify the authenticity of a support representative. To stay safe, only contact official support channels for any assistance.
Final Thoughts
As much as buying crypto assets is very simple, keeping them safe is not. For any trading activity, always find a good seasoned exchange and secure wallet. Also, always enable 2FA and take safety measures whenever doing a transaction. Stay alert on scams and beware of risky investments as you continue learning, protecting and growing your digital assets.
