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How to Securely and Safely Invest in Bitcoin and Altcoins with the Top Crypto Exchanges in 2020

The definitive guide to investing in bitcoin, ethereum and other popular cryptocurrencies with the top cryptocurrency exchanges in 2020.

Market Gladiator
Market Gladiator

Let's face it: Bitcoin (and cryptocurrencies in general) is a complicated topic.

It can be pretty daunting for beginners who are trying to learn the ins and outs of the industry, especially upon entering various forums and social media groups where buzzwords such as "blockchain," "altcoin," "mining," and "wallet" are thrown at them from all directions until their interest in Bitcoin has subsided.

It can be pretty daunting for beginners who are trying to learn the ins and outs of the industry.

This is an unfortunate side effect of Bitcoin and its entering into the mainstream in recent years, however cryptocurrencies are still an extremely valuable tool for everyone, whether you're hoping to invest in the next Bitcoin or Ethereum, or want a way of preserving your privacy in a society that is becoming increasingly cash-less.

Despite what hours of frustrating web-searching and countless shady-looking websites may have led you to believe, buying Bitcoin and Altcoins can be easier than you think.

What is Bitcoin? A Short History

Most people these days have already heard about Bitcoin and cryptocurrencies, but depending on who you talked to, you may have been told either positive or negative things.  

Here I will give you a short history of Bitcoin and why it's been so controversial from the moment it appeared on mainstream media, just like the Internet and E-mail in the 90's, the media has struggled to understand this new technology.

Bitcoin started out in 2007 as an obscure technology being developed by a mysterious individual, or group of individuals, named Satoshi Nakamoto (even to this day nobody knows who this actually is).

“I did not create, invent, or otherwise work on Bitcoin." - Dorian Satoshi Nakamoto

However, this revolutionary technology appears to come into existence just as the world enters a global financial crisis in 2008. The idea probably came into effect due to Satoshi’s dissatisfaction with the existing financial system.

Satoshi wanted Bitcoin to be a currency, which could be used for peer-to-peer transactions without having to trust a third party like a central bank. The actual Bitcoin network first launched on January 3rd, 2009. The earliest users of Bitcoin could have never dreamed that it would become what it is today.

Over time, more and more people hopped on board and began using this original cryptocurrency. In the earliest days it was mostly seen as nothing more than a fun proof-of-concept that an entirely digital currency backed by no government would be possible, could be possible.

It began being used mostly for black market transactions since law enforcement was not yet aware of it.

Then, it began being used mostly for black market transactions since law enforcement was not yet aware of it, and transactions could be completed (mostly) anonymously.

As early as 2011, the price of a single Bitcoin was just $0.30. Today, Bitcoin and some other popular cryptocurrencies have turned more into an asset rather than a currency. Bitcoin is increasingly becoming a new store of value and reserve asset by millions of people around the world, including major corporations, millionaires, billionaires, and even governments.

Related Article: The Dawning of the Crypto Economy

To put it mildly, the Bitcoin story is one that is extraordinarily fascinating and well worth looking in to. If you are reading this article, however, you likely just want to know how you can take the plunge and buy some Bitcoin for the very first time.

Fortunately, it is easier than ever to do just that.

First, How Much Do You Want?

When buying Bitcoin for the first time, you need to ask yourself how much Bitcoin you want.

While a single Bitcoin today sells for many thousands of dollars, you can buy fractions of Bitcoin for much less. Every Bitcoin can be 'broken down' into smaller units.

Stacking Sats - verb: the act of accumulating bitcoin through buying, earning, or mining.

The smallest unit of a Bitcoin is called a Satoshi, or Sat, after the original creator. A single Satoshi is 0.00000001 Bitcoin. This is a much more affordable way for the average person to buy Bitcoin for the first time.

"Stacking sats" is a term used in the crypto community to regularly accumulate small amounts of Bitcoin. This can be done via either buying, earning, or mining Bitcoin. We'll save the topic of mining and earning crypto in another blog post.

What are these Altcoins?

Before you buy Bitcoin and other cryptocurrencies known as "altcoins", as they are alternatives to Bitcoin or BTC, the token symbol used by crypto exchanges analogous to a stock ticker symbol.  The most popular altcoin cryptocurrency today is Ethereum or the token symbol ETH.

An important take away all new crypto investors should know is that Bitcoin or BTC is the largest and most popular cryptocurrency.  This means that it heavily influences the prices of the entire cryptocurrency market.

Buying altcoins can be very risky, while it may be possible to see returns of thousands of percentages, it is also very possible to see losses of 90% or more.

Buying altcoins can be very risky, while it may be possible to see returns of thousands of percentages, it is also very possible to see losses of 90% or more. The cryptocurrency market, being significantly smaller than traditional markets, still has a lot of room for growth.

There are thousands of cryptocurrencies, and the majority of these will likely fail to gain mainstream adoption, but on the flip side, many of these projects will survive and grow with their communities.

This is where the real opportunity lies, as more people invest, adopt, and use Bitcoin and popular cryptocurrencies, the inevitable result is higher prices due to the limited supply and increased demand.

Where to Buy Bitcoin and Altcoins?

For years, the biggest challenge to buying Bitcoin was finding a place where you could turn your fiat currency (a US dollar, for example) into Bitcoin. Today, there are many different apps, exchanges and services that will let you do this quickly and easily.

The following list are just some of the easiest and safest options out there:

Cash App - Send, spend, save, and invest. No bank necessary.

•​ Cash App - Cash App is an extremely popular mobile app that allows users to send and receive money with just a few taps. Today, they also allow you to buy and sell Bitcoin through their app. Simply click on the Bitcoin tab in the app and select how much you want to purchase. You can enter that you want to purchase $100 worth of Bitcoin and it will determine exactly how much you will get and complete the transaction.

The process is extremely fast and extremely easy. For the complete novice, there really isn't a better option.

Coinbase - The best place to get started with crypto.

•​ Coinbase - Coinbase is another app that is developed to help people buy and sell Bitcoin (and quite a few other cryptocurrencies) without having to understand the technology behind it. You can link your bank account, deposit funds, and purchase any amount of Bitcoin you choose.

Experienced traders prefer Coinbase Pro over Coinbase due to its lower fees and advanced trade options.

Gemini is a digital currency exchange and custodian that allows customers to buy, sell, and store digital assets.

•​ Gemini - Gemini Trust Company, LLC (Gemini) is a digital currency exchange and custodian that allows customers to buy, sell, and store digital assets. It is a New York trust company that is regulated by the New York State Department of Financial Services (NYDFS) and was founded in 2014 by Cameron and Tyler Winklevoss, also known as the Winklevoss Twins.

Gemini Exchange now accepts a fiat currency (USD only) as well as different digital assets, such as BTC, ETH, LTC, BCH, BAT, LINK and others.

eToro is a social trading and multi-asset brokerage company that focuses on providing financial and copy trading services.

•​ eToro - eToro is well known as a platform where people can buy and sell stocks and other financial instruments. They now offer the option to buy and sell Bitcoin as well. If you already have an eToro account, this is an obvious choice for where to purchase your first Bitcoin.

eToro has a copy trading feature that allows you to copy other successful traders, we recommend caution using this feature and always check your performance on a regular basis.

Binance cryptocurrency exchange - We operate the worlds biggest bitcoin exchange and altcoin crypto exchange in the world by volume.

•​ Binance - Binance is the leading crypto only exchange with over 100 altcoins supported for deposit or withdrawal. The exchange accepts users from around the world and has some of the most competitive rates when combined with the exchange's native Binance Coin (BNB), which makes it a popular choice in the crypto community.

Binance has a large range of crypto trading products and services, ranging from peer-to-peer trading to futures contracts and margin trading, even interest earning savings and crypto-backed loans.

Kraken - We put the power in your hands to buy, sell and trade digital currency.

•​ Kraken - Kraken is a cryptocurrency spot exchange that also offers futures contracts and margin trading. Founded in 2011 and being headquartered in the United States, Kraken must comply with American laws and regulations.  

This makes Kraken a good option for U.S. based professional traders and institutional investors.  Having never been hacked, Kraken is considered to be one of the safest exchanges to trade on.

KuCoin is the most advanced and secure cryptocurrency exchange to buy and sell Bitcoin and Altcoins.

•​ KuCoin - KuCoin is one of the lowest-fee exchanges in terms of trading fees. KuCoin and Binance have similar competitive strategies. They both charge almost equally low fees, especially when paid with the native exchange token KuCoin Shares (KCS), similar to Binance's BNB token.

The Hong Kong based exchange was established in May 2017 by an experienced team of blockchain and cryptocurrency professionals who started developing and building the exchanges architecture back in 2011.

LocalBitcoins.com - Get bitcoins. Fast, easy and safe. Near you.

•​ LocalBitcoins - LocalBitcoins was one of the first places on the web where you could actually purchase the cryptocurrency. Launched in 2012, it was originally a site where you could find someone in your area (hence the name) who had BTC, meet up with them, pay in cash and then have the coins transferred to your wallet.

Since then it has evolved to become a place where Bitcoin can be bought and sold entirely online.

Paxful is a global marketplace to securely trade bitcoin with millions of users, using 300+ modes of payment.

•​ Paxful - Paxful, billed as the "Uber of Bitcoin", has made a name for itself within the cryptocurrency community and is now a respected and trusted site to trade Bitcoin. Similarly to Local Bitcoins, Paxful is a peer-to-peer marketplace where you can trade directly with another person.

You can use a huge variety of payment methods to buy your BTC, with some sellers even supporting gift card payments.

Robinhood, a pioneer of commission-free investing, gives you more ways to make your money work harder.

•​ Robinhood - Robinhood is a popular app for people to buy stocks. They really made a name for themselves for providing the 'average Joe' with a way to purchase a small amount of stock on a regular basis so they could build up a portfolio. They do the exact same thing with Bitcoin, which makes it a great option for many people.

Something to be aware of, at the time of this article, Robinhood does not allow users to transfer out their cryptocurrencies from their accounts to their wallets or other crypto exchanges.

Voyager - Your new favorite place to invest in crypto.

•​ Voyager - Voyager, which was founded in by established Wall Street and Silicon Valley entrepreneurs who teamed to bring a better, more transparent and cost-efficient alternative for trading crypto-assets to the marketplace. Voyager also recently acquired Circle Invest, another up and coming crypto trading app in February of 2020.

Voyager is different than most exchanges, because it automatically searches for the best deal on the top crypto exchanges at once, then executing the trade all without you ever having to open an account on any of the other exchanges.

Note: This list will be updated with more apps and exchanges as time goes on, be sure check back to see if any new exchanges have been added.

All of these options are available 24/7/365 so you can buy (and sell) Bitcoin or Altcoins at your convenience. They do charge a small fee as well, but it is typically no more than a few dollars.

Some of the services charge based on the amount you are purchasing. Others will have a flat fee. While understanding the fees is important, for the first-time buyer these small charges shouldn't be enough to get in the way of owning your first piece of a Bitcoin.

You Are a Bitcoin Owner... Now What?

Congratulations! You are now (hopefully) the proud owner of at least a fraction of a Bitcoin. If you are like most people, your next step will be to keep buying more as you have some extra money to invest.

Congratulations! You are now (hopefully) the proud owner of at least a fraction of a Bitcoin.

Over time, you can reach your Bitcoin goals, whatever they may be. While this next piece of advice goes beyond the guide, it is extremely important to note. Cryptocurrencies (including Bitcoin) are unlike any other financial tool.

Warning: Keep Your Crypto Safe and Secure!

If you accidentally send your Bitcoin or another cryptocurrency to someone else because you were testing to see what a button did in an app or to the wrong address, your cryptocurrency is gone. If the person you sent it to does not want to be nice and return it, there is absolutely no way to get your crypto back.

This is one of the features of Bitcoin and most cryptocurrencies (once a transaction is made, it can not be reversed). With this in mind, make sure to always be careful when taking any action with your cryptocurrencies.

If you accidentally send your Bitcoin or another cryptocurrency to the wrong address, your cryptocurrency is gone.

Some of the apps and platforms mentioned above do a good job at making sure you won't accidentally send your Bitcoin, but if it happens, you will have lost your investment. Always double and triple check the address to be sure you are sending your crypto to the right location before hitting that send button.

Here are some other things to consider in order to keep your cryptocurrencies safe and secure:

•​ Crypto Exchange Hack - Cryptocurrency exchange hacks account for the majority of Bitcoin lost. Exchanges are popular targets for cybercriminals, some exchanges have taken extraordinary safe guards over the past few years to prevent these types of attacks.  

•​ Phishing - Cybercriminals stealing peoples Bitcoin by fraudulently obtaining usernames, passwords and login into hot wallets and withdrawing all coins. Some of the most common cryptocurrency phishing scams are fraudsters impersonating exchanges using emails that closely resemble emails you are used to seeing from the exchange.

•​ Ponzi Schemes - A Ponzi scheme is a form of fraud where early investors are paid out quick profits with funds obtained from the most recent investors. A Ponzi scheme has no realistic way of making money and offers people unrealistic returns.

•​ Fake Wallet Apps - Fraudsters create fake wallet apps and list them on Google Play Store, they usually mimic real cryptocurrency wallet apps. Their purpose is to get peoples credentials or steal peoples crypto. These apps may ask you for your private keys, then show a fake balance while they withdraw your cryptocurrencies.

•​ Catfishing - Be wary of fake social media accounts impersonating reputable cryptocurrency projects or people. This is used in combination with phishing to get access to user accounts login details, or they hack social media accounts of famous celebrities and other influential people requesting you send them crypto with the promise of getting more crypto back.  Don't do it.

•​ Malware - Malware can infect your computer or mobile device from a number of sources, popular targets are sites that offer pirated software, adult websites, and even the Google Play Store. One of the common ways malware can steal your Bitcoin is by changing the address when you send or receive, so always double check the address to be sure it is exactly same.

•​ Fraudulent ICOs and DeFi Scams - People who are new to crypto fall prey to fake initial coin offerings (ICOs) or decentralized finance (DeFi) who advertise themselves as a new cryptocurrency investment that will yield high returns. They utilize the fear of missing out (FOMO) only for the projects never to materialize and the funds are never returned to the investors.

•​ Pump and Dumps - A pump and dump is price manipulation, fraudsters use social media groups to hype up projects or tokens known as “shit coins” because they add no value or have no real use-case which goes up exponentially in value overnight.

Once the value increases, the fraudsters sell their tokens and soon after the massive sell-off the token price sinks dramatically causing the people who held on for longer or who bought at higher prices to make massive losses.

There are a number of other potential pitfalls when investing into Bitcoin and other cryptocurrencies, that being said, the best way to keep your cryptocurrency safe and secure is by using a hardware wallet.

Conclusion

Finally, make sure to do some additional reading about owning your own cryptocurrency keys. This is outside the scope of this guide, but getting your own crypto wallet will help to provide significant protection for your investment.

We recommend the Ledger Hardware Wallet, it's by far the most popular option for keeping your cryptocurrencies safe and secure.

After you make your first Bitcoin purchase, make sure to read more about how to keep it safe. We recommend the Ledger Hardware Wallet, it's by far the most popular option for keeping your cryptocurrencies safe and secure.

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Welcome to the exciting world of crypto investing, and good luck.

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