By: Brandon Mintz, CEO, Bitcoin Depot
As the market for Bitcoin and cryptocurrencies expands and matures, the barriers to entry also continue to fall. It is easier than ever for the public to buy and sell cryptocurrencies, use them to pay for things, and to hold as short or long-term investments. Cryptocurrencies are attractive due to their decentralized structure and global usability. They enable commerce across geographic boundaries and are not constrained by any central banking organization or similar authority. The public’s understanding of Bitcoin and the other main currencies continues to grow, and now they want to get in on the action.
Buying cryptocurrencies is much easier than it was just a few years ago, and buyers can choose amongst multiple options that best suit their needs.
- Use a Cryptocurrency ATM
Bitcoin ATMs, or “BTMs” look like traditional ATMs that distribute fiat (dollars, etc.) currency. The difference? The BTM allows customers to buy cryptocurrencies in a matter of seconds through the terminal. First-time users only need to add a minimal amount of personal information, and they can quickly buy their preferred cryptocurrency securely and easily. And when they are ready to sell, the BTM can exchange cryptocurrency for actual cash. BTMs, like Bitcoin Depot, are found at gas stations, convenience stores, and grocery markets, are vitally important for the growth of Bitcoin as a recognized daily payment source.
The security protocols for BTMs are the same as traditional ATMs, as they’re all made by the same companies. This security and the ease of transaction is fueling explosive growth of BTMs. One company, market leader Bitcoin Depot, manages more than 500 machines, part of a network of more than 2,000 (and counting) machines located in the U.S. alone.
- Find a Peer
Peer-to-peer or person-to-person cryptocurrency exchanges are not actually completed in person. They are done over a trusted trading platform that allows people to perform trades anonymously with others. These types of trades are vital for what is known as “underbanked” people, which are those with limited access to costly traditional banking services. Trading platforms help people pay for goods or services in their community with security, and without the need for a third-party intermediary that takes a healthy fee.
Buyers and sellers should exercise some caution using peer-to-peer platforms. They should read reviews and choose a platform with a great reputation for security and reliability.
- Use a Cryptocurrency Exchange
Online exchanges enable buyers and sellers to collect a variety of cryptocurrencies, from Bitcoin to the more obscure coins that hit the market frequently. Some of the biggest names include Coinbase, Kraken, and Gemini, with several other players operating.
These exchanges function as a user’s “wallet”, which is simply a digital way to hold cryptocurrencies that is tied to the owner’s personal information. This type of arrangement is easy and a good starting point for many cryptocurrency buyers. For example, someone can download the Coinbase app on their phone and buy cryptocurrency with a credit or debit card in seconds. However, some users want complete control over their security, so they use a “decentralized” service where the user completely controls their own wallet. There are multiple types of these secure wallets, that range from mobile apps to actual hardware key fobs. And some users leverage “cold storage” such as paper wallets that contain codes for cryptocurrency purchases and eliminate any digital access points.
Here are some things to keep in mind about exchanges:
- Beginners should start with the Coinbase portal or app. It is as simple to use as Venmo or PayPal and has a strong history of security and reliability.
- More experienced investors looking for obscure cryptocurrencies will enjoy the advanced features and lower fees of Gemini and Kraken.
- Coinbase and Gemini holds dollar-based accounts in FDIC-covered accounts (like a bank), giving extra peace of mind to investors
- Work for Cryptocurrency
Cryptocurrency’s move from the fringe to the mainstream sees it becoming used for all types of transactions. This includes employee compensation and salaries. There are some U.S. companies offering Bitcoin payments; however, the legal status is murky. Freelance gigs sometimes are paid in Bitcoin, especially those listed on job platforms like Cryptogrind or Coinality. Taking payment in Bitcoin or another popular coin is a way for workers to gain some exposure to cryptocurrencies. With the prevalence of BTMs and exchanges, it is easy for workers to turn some of their coins into cash and choose to invest a portion for potential gains.
Bitcoin and other coins offer the public instant investing diversification and a truly global currency. They are less affected by country-specific events then the stock market, and with the proliferation of BTMs and exchanges, cryptocurrencies are very liquid. Before diving into crypto, buyers should understand their different purchasing and selling options, and then pick a method that best fits their needs.
Disclaimer: This content does not necessarily represent the views of IWB.