Cryptocurrency offers a new way to invest, transact, and store value. If you're new to this exciting digital frontier, you're not alone. Many beginners are eager to explore the world of Cryptocurrencies, but it can seem daunting at first. To buy Crypto feels like it should be hard. This guide is designed to help you embark on your Crypto journey and buy your first Crypto with confidence.
Cryptocurrency is a digital asset or virtual money that uses cryptography for security. Three characteristics define “money.” It is a unit of account, a medium of exchange, a store of value. Unlike traditional currencies issued by governments (fiat), digital currencies operate on decentralized networks based on blockchain technology. Key terms include:
The first step in your journey begins by choosing a Cryptocurrency wallet. You need to answer three questions: 1. Custodial or non-custodial Crypto wallet? 2. Which type of wallet? 3. Which Crypto wallet?
Crypto wallets can be either custodial wallets or non-custodial wallets (also known as self-custody wallets). Which you choose has important implications.
The main tradeoff is between security and ownership.
In short, with a non-custodial Crypto wallet, when you buy Crypto you own and control your tokens. You control the Private Key and only you have access to your assets. You are also responsible for the security of your wallet and your assets.
With custodial Crypto wallets, on the other hand, when you buy Crypto the organization that provides the wallet controls the assets stored there. Similar to traditional finance. If something goes wrong, the company shuts down, is sued, or is not trustworthy your assets can be lost.
For additional research, start with an earlier blog post called “Understanding the Difference: Custodial vs Non-Custodial Crypto Wallets.”
There are three types of Crypto wallet: software wallet, hardware wallet, and mobile wallet. Which is right for you is personal.
How do you plan to use the wallet? Do you intend to buy and hold tokens long term, do you want to trade frequently? Are you interested in swaps or advanced trading tools? Do you want access to DeFi and the broader Web3 universe?
Software wallets and mobile wallets offer more flexibility and access. Hardware wallets are more secure and better suited for long-term storage.
The links above provide more detail when you’d like to learn more about each type.
There are hundreds, if not thousands, of Crypto wallets available to choose from.
In the EVM world, self-custody Crypto wallets Include the Nash Wallet, MetaMask, Safe, Brave, Uniswap, Trust Wallet. Custodial Crypto wallets include Coinbase (they also distribute a non-custodial wallet), Binance, Gemini, BitGo, Anchorage Digital.
Each offers different features, capabilities, functionality, accessibility, security. We’re biased, of course, our recommendation is the Nash Wallet. It is self-custody, has a registered fiat to Crypto ramp natively integrated, comes with DeFi by default, and connects to all WalletConnect supported protocols.
That said, you should do a bit of research and select one that aligns with your needs and preferences.
The great benefit of self-custody wallets is that you can always transfer your assets to another self-custody wallet in the future. And, if you choose a custodial solution, you can always transfer your tokens to a self-custody wallet later.
Security is paramount in Crypto. Your wallet is your digital vault and you must protect it. Whether you choose a self-custody Crypto wallet or custodial solution.
Crypto will introduce you to a number of Web3 specific concepts and tools. You’ll also find many of the same security practices in Crypto that you do in Web2. Concepts like usernames, passwords, and 2FA.
After you’ve chosen which Crypto wallet, and assuming it’s a self-custody Crypto wallet, security begins during wallet creation. At some stage of the flow you’ll be asked to save a seed phrase (12 or sometimes 24 words).
The seed phrase is critically important and requires special attention. It is literally the keys to your kingdom. Best practices include not storing it on a digital device, not saving it on anything connected to the internet, and never sharing it. More on this below.
You might be familiar with other key elements of security, while Crypto-specific ones might be new. Key terms and concepts:
More advanced Crypto/blockchain security concepts are for another blog post. E.g. cryptography, consensus, network security, decentralization, the role of validators and community, and staking.
When considering custodial wallets, be aware that accounts are centralized at the organizational level. Thus, susceptible to all the same security challenges as Web2. Threats like cyberattacks, fraud, hacks, legal actions, nation-state actions.
Acquiring your first Cryptocurrency token is a big step. It means venturing into a whole new world of uncharted territory.
Selecting which Crypto to buy is a topic for another post. In short, it’s similar to any other investment. Research the projects, understand the goal, understand the tech, be honest about your risk tolerance, check the market capitalization.
Your first experience investing in Crypto involves two steps. Subsequent purchases typically require only the second.
To buy Crypto, you first need to connect an external, fiat currency account. This could be a traditional bank, neo-bank, debit card, credit card, wire, or platforms like PayPal and Plaid.
Every fiat to Crypto ramp, platform, Crypto exchange has their own set of integrations. Every geographic jurisdiction has their own requirements. Pay particular attention to the limitations you legacy finance institutions have implemented. Some are friendly to Crypto, others are hostile.
Our recent blog post “Understanding Crypto Fiat Ramps” has more information on fiat to Crypto ramps,
Crypto wallets and apps make this step straightforward. Just follow the in-app prompts, go through the KYC, and link your source of funds. If you’ve ever made a legacy bank transfer or connected a traditional bank account to a platform like Plaid, you will be familiar with this process. Absent any issues, the process takes only minutes.
“KYC” is an acronym for Know Your Customer. It is a required step to prove who you are and your ownership of the external account you chose to connect.
KYC is a controversial topic. Also, a necessary step when connecting to a fiat to Crypto ramp or getting started with a Cryptocurrency exchange. Only compliant and/or regulated Crypto apps and platforms require KYC. It is a strong signal the App you chose does things the right way. More info on this topic is available in the blog post linked above.
If you are an experienced investor, you might choose a trading platform with advanced features. E.g. limit orders, stops, technical analysis tools. If you are new, a streamlined interface is less intimidating.
With your funding source connected, and your platform selected, the buying (and selling) process is quick and easy. Let’s buy Cryptocurrency:
Investing in Cryptocurrency and embarking on a Web3 journey can feel complex. Hopefully, the above illustrates that it is easy to buy Crypto. With the right tools, it is accessible. The Nash Crypto App and investment platform is designed to simplify each step and provide advanced features.
Cryptocurrencies offer new opportunities for financial growth and security. They open doors to the decentralized world of Web3, individual ownership, and empowerment.
Buying Crypto and navigating the space as a beginner may seem daunting, but it's entirely achievable with the right guidance and tools.
Nash is here to support you on your journey whether you're looking to invest, transact, dive into Web3, or simply learn.
Welcome to the future of personal finance, where Crypto and traditional banking seamlessly coexist, and financial empowerment is at your fingertips.
To get started with Nash, click the QR code below (if you’re reading on mobile) or scan it (if you’re reading on desktop).
