It seems odd to be writing about how to use money to buy more money, but such is life in the 21st century. Digital assets are quickly becoming the new normal, so it’s time to join the crowd. For beginners, buying cryptocurrency, or “crypto” for short, can feel confusing at first. The good news is, it’s actually simpler than it seems.
To get started with crypto, just follow these few steps:
1. Choose a method
Your first step as a fledgling crypto investor is to select a platform on which to carry out your buying and selling. Note that whichever option you choose, you’ll want to make sure they allow fiat currency transfers and purchases made in U.S. dollars, not crypto. Otherwise, you’ll need to find another place to buy the tokens your exchange or brokerage accepts before you can begin trading in crypto on your chosen platform.
Here are your options:
Opening an Account with a Traditional Broker
A brokerage takes a lot of the complexity out of the equation and offers pretty intuitive interfaces that will feel user-friendly for beginners. There’s a charge for this convenience, but rates vary across different brokers. Just be careful of any brokerage claiming to be “free,” as that typically means they’ll be making their money by selling your information or giving you less-than-ideal trades. You can also diversify your assets with a brokerage, as you’ll typically have the opportunity to invest in stocks, bonds, and ETFs in addition to crypto.
While this route tends to be less expensive and more intuitive for beginners than an exchange, there’s one big thing to keep in mind: many brokerages don’t let you move your money off their platform. For example, popular crypto brokers like Robinhood and SoFi won’t let you transfer your holdings out of your account and into, say, a crypto wallet. That’s a problem for some investors who prefer to hold their crypto in wallets for added security.
Opening an Account with a Cryptocurrency Exchange
A crypto exchange can be more confusing for new investors. Each platform has its own set of rules, trade types, wallet storage options and fees. Plus, they tend to have much more complex interfaces. Coinbase and Gemini are two popular crypto exchanges, both of which offer their standard trading interface or a more pricey beginner-friendly interface. The good news is, you’ve got a third option to make getting started even easier.
Receiving a gift on Stack's Platform
Here at Stack, we’re neither a brokerage nor an exchange. Instead, we act as a bridge, connecting a gifter's wallet with a recipient’s crypto exchange or brokerage account. That means we do all the confusing back-end work with exchanges and brokerages, so all you have to do is press ‘claim my gift.’
For new crypto users, we partner with Coinbase to help you open an account hassle-free. From there, you’re off and running! For existing Coinbase users, we can integrate directly with your account.
In the future, we plan to also partner with additional crypto exchanges and brokerage firms so you can gift/receive both crypto and stock within our app.
2. Open and verify your account
Once you’ve chosen your method for investing in crypto, the next step is to open your account. Some platforms will ask you to verify your account by uploading identification documentation like a driver’s license, passport, and even a selfie. These steps add security to your account to prevent fraud and to meet federal regulatory requirements.
3. Put funds into your account
To buy digital cash (that’s crypto), you’ll need to have traditional cash. In most cases, you’ll either link your bank account or conduct a wire transfer. Be cautious about paying with a debit or credit card, as it can result in some hefty fees. Also, depending on your brokerage or exchange, you may have to wait a few days to start trading until your funds hit your account.
At Stack, our gift transfer technology passes funds to your account within 24 hours of claiming a gift (and often way quicker than that).
4. Place your order
It’s time! Now that you have your account set up and flush with funds, you can begin to purchase crypto. There are hundreds of cryptocurrencies out there to choose from, ranging from Bitcoin to Ethereum to Dogecoin to USD Coin. At Stack, all gifts are given in USDC. We hope to eventually offer gifting in Bitcoin, Ethereum and many others in the not too distant future. You can check out the full list of coins and their market cap here.
5. Secure your crypto
Last but not least, you’ll want to select your storage method for your cryptocurrency. Again, you’ve got a few options:
Leave your wallet on the exchange. We lied. Sometimes, you don’t have an option. As we mentioned above, some exchanges will make you keep your crypto within their account. Some do let you transfer it out to another wallet, but it’ll cost you.
Hot wallet. These are digital wallets that are stored online and connected to the internet. They’re the most convenient, but there is a higher risk of theft (when compared to cold wallets, below) given their internet connection.
Cold wallet. Cold wallets aren’t connected to the internet. Instead, they usually take the form of a USB or a hard drive. The good news is they’re more secure, the bad news is that if you lose the keycode associated with them or if the device breaks or fails, you may never be able to get your cryptocurrency back. Don’t be like these dudes.
Stack partners with various exchanges, and each has different wallet options. Please refer to the respective exchanges website for specific details.
And that’s it! You’re now 5 steps closer to joining the digital currency revolution. Want to be one of the first to gift crypto with Stack? Join our waitlist.