So you’ve heard all about and have been captivated by the crypto craze, done your research (hopefully) and now you’re ready to make that first step in actually purchasing some coins to put your curiosity to rest. If so, you’ve come to the right place!
In this article we outline some of the cryptocurrency basics as well as give you advice on how to go about purchasing your first ever cryptocurrency in Australia, and then give you some ideas as to how to spend and what to do with them once you have them!
If you have done some research on cryptocurrencies before, you have probably heard of the Blockchain. The Blockchain plays a vital role in the functioning of various cryptocurrencies.
The Blockchain is basically the ledger that holds a record of all the crypto transactions ever made. The Blockchain works by solving complex algorithms in an effort to ensure that each transaction made on the system is secure.
The way these algorithms are solved is through miners, who use specialised computer equipment. A solution needs to be checked by a number of miners before it is deemed correct and added to the system. In this way, it encourages miners to work together and the reward for miners solving algorithms is that they get paid in Bitcoin or other cryptocurrencies. Blockchain also ensures that anyone sending funds truly does have those funds and is not using the same funds twice.
Blockchain technology has proved itself to have many other uses since it first came about in 2009. It can assist in everything from tracking pieces of art to providing safe and secure messaging platforms. It truly is versatile and a highly praised system.
You wouldn’t be interested in buying into cryptocurrency and its technologies if it didn’t come with benefits. If you compare cryptocurrency to fiat currency you will come across an impressive amount of benefits and advantages, here are some of the benefits you can expect when using cryptocurrency:
When making transactions, both deposits and withdrawals, cryptocurrencies often have far lower fees in comparison to fiat currencies. In many cases making transactions with cryptocurrency is free. With online banking fees and charges ever increasing, this is definitely a welcomed benefit.
Although a while ago the Blockchain did become inundated with transactions that led to slower speeds, the problem has been fixed and cryptocurrency transaction speeds are some of the fastest out there. This makes cryptocurrencies perfect to use for paying bills and online shopping.
Despite the numerous crypto scams out there, it is actually very difficult for a digital bank robber to gain access to your funds. Unlike a credit card, that once stolen has a myriad of ways to be used to buy things online, cryptocurrencies require you to use a special signature that only you should know and have access to.
When making a purchase online with your credit card, you are basically providing your ID number, cell number, name and even address, as all that information is linked! But when paying with cryptocurrency you have the opportunity to be totally anonymous. Only your crypto ID will come up on the system, but if you wish this can be an alias or nickname. It is not necessary to give any more personal information than that.
As long as you have access to the internet, you can be part of the cryptocurrency community. There are very few limitations and rules when it comes to crypto, which makes it very accessible to a vast array of people.
Now that you have a general background on cryptocurrency, how it works and the benefits you can expect to obtain from it, you can now look at finally purchasing some crypto coins. In 3 simple steps we’ll explain just how to go about doing that.
When choosing a cryptocurrency you should keep in mind what you intend on using the cryptocurrency for (trading, investing or spending). Always do thorough research to ensure that the cryptocurrency you plan on buying into is 100% legit. In most cases it’s best to go for one of the better known currencies as they are more widely accepted and can be trusted. Reading this article in full may be able to help you in picking a cryptocurrency.
You’ll need a place to store your coins so you will need an online or offline wallet. There are many great wallets out there. But again, you’ll have to do some research as some wallets are designed to be used specifically just for storage while others are more adapted to being used for multiple transactions. Some wallets are also incompatible with certain coins so it’s imperative to find out if the wallet you have your eye on can store your chosen coins. Some wallets come in the form of a mobile app which can be very useful for spending coins on the go. Of course there is the option of simply leaving your coins on the exchange’s wallet, but this is never recommended due to the potential for the exchange to be hacked. It’s not something that happens often, but why risk it?
You will need to make your initial payment in exchange for your coins using fiat currency (Australian dollars or AUD), either by an internet bank transfer, credit card or a service such as POLi Pay if the exchange offers it.
Once you have verified your identity through your coin wallet and your deposit for your coins has cleared, you will receive your crypto coins into your wallet and you can start saving or spending!
Before you use an exchange, it is recommended that you do just as much research on the exchange as you would for the coins themselves.
For an full overview of the best exchanges in Australia, you can read our guide here.
Alternatively, choose one of the recommend ones below:
The first exchange that we recommend is CoinSpot. They have a huge number of cryptocurrencies available to purchase with Australian Dollars. You can read the full review here.
Another great Australian exchange is Independent Reserve. Although they only offer 4 cryptocurrencies (Bitcoin, Ethereum, Litecoin and Bitcoin Cash), it will be enough to get you started. You can read the full Independent Reserve review here.
If you want to trade purely with cryptocurrencies (without fiat/AUD), then Binance is a great option. We’ve reviewed Binance here.
Alternatively, another option for trading cryptocurrencies is Cryptopia. Check out review of Cryptopia here.
Obviously once you have gotten your hands on your coins, it’s important to store them somewhere safe. There’s nowhere safer than a crypto wallet. When searching for potential wallets online to suit your crypto needs, you will come across one major difference- some are online wallets while others are offline. We recommend you have one of each (or a wallet that acts as both), so you can transfer between the two when you need to.
An online wallet stores your funds in an online cloud. This is a good type of wallet to store a small to medium amount of funds. It is also great for transactions as it is easily accessible and can be accessed from more than one device, making it perfect for payments, online shopping. A mobile wallet is also considered to be an online wallet.
An offline wallet, also called a hardware wallet, is recommended for storing large amounts of cryptocurrency as they are very difficult to hack into as the hacker will need the device that your offline wallet is stored on as well as your secret code. Offline wallets are perfect for storing investments and if you ever need to spend your crypto you can always transfer it into your online wallet.
Cryptocurrencies cannot be used everywhere, yet. But you’d be surprised at the amount of sites and establishments that offer cryptocurrencies as a valid form of payment. But just how far can your cryptocurrency get you? Have a look at this list to find out!
Many of the world’s major online shopping retailers accept popular cryptocurrencies as a payment method. Popular sites include overstock.com and Etsy. Depending on what sites you like to do your shopping on, you should be able to get in a good dose of retail therapy using your Bitcoin or other crypto coins online.
Do you prefer spending your money on experiences rather than items? Then you may want to spend your crypto coins on a travel experience. Virgin Air accepts payments in crypto, as does Expedia. You can even take a flight to outer space with Virgin Galactic!
If you’re kind-hearted you may want to treat your friends and family with your crypto funds. You can buy both gifts and gift cards at sites like Gyft and eGifter.
Pay for services- Need something translated or copy written? Fiverr is a site that offers a very wide variety of services for reasonable amounts. The site lists thousands of professionals that can help you with everything from video editing to transcription.
We are by no means are advocating gambling, but if that is your thing you’re in luck. Both gambling and gaming is closely linked to the crypto industry and most international gambling sites let you make deposits and withdrawals in your desired cryptocurrencies. There are even gambling sites out there that are entirely dedicated to cryptocurrency – with Bitcoin themed games and the works!
While many of the above mentioned places are online retailers, there are a few brick-and-mortar retailers in Australia that are starting to accept Bitcoin and other cryptocurrencies. You’ll find that many restaurants and accommodation services across the country are starting to become more inclined to offer popular cryptocurrencies among their payment methods.
When buying your lot of cryptocurrency, you need to decide whether you plan to invest or trade. Of course you can do a bit of both, it’s a good idea to have a clear vision as to what you plan to do with your crypto funds before you purchase them. Below are the major differences between investing and trading.
Investing is far more passive than trading. Making an investment is a commitment of at least a few months, wherein you buy an amount of cryptocurrency and not touch it for a long-term time period- at least a few weeks but more often than not investments can be commitments that last months and even years. The best way to invest is to buy a cryptocurrency that is stable and has been generally increasing in value for some time.
Trading requires a bit more commitment as in order to trade in effectively, you’ll need to learn how to read trading graphs and be actively involved as you may need to be buying and selling crypto coins daily and even hourly to make the best profits. You’ll need to stay up to date with crypto news, so an app may be very helpful in keeping you in the loop.
On top of spending, investing and trading in cryptocurrencies: you can also earn in cryptocurrencies! Here are some of the best and easiest ways to earn a salary or at least a part time salary in cryptocurrency.
Mining is one of the best ways to get paid directly in cryptocurrency, while strengthening the crypto economy as you do so. Mining does have its drawbacks though. It is a very pricy outlay. The equipment is very expensive and you can expect some exorbitant electricity bills to keep the hardware running.
This may be a shot in the dark but you never know who is into cryptocurrencies these days. For all you know your boss may have a whole horde of Bitcoin he’s just looking to spend somewhere. There are also services starting to pop up that make the process more easy for your employer to start paying you in cryptocurrency.
This is a good idea if you have a knack for entrepreneurship. Scope out the market, see what you think will sell and then go about setting up your shop on either platform to start trading goods (handmade or not) in exchange for cryptocurrencies.
Like you, there are thousands of other people interested in buying cryptocurrencies in Australia, and unfortunately there are sinister fraudsters out there looking to take advantage of that. Most scams are linked with certain ICOs, where initial coin offerings are structured similarly to a pyramid scheme. They offer high returns on your investment, but instead of allowing you to make profits, the ICO takes your money and runs.
Another scheme that often occurs is a phishing scheme. People with large amounts of cryptocurrencies often fall victim to these scams. What happens is, the victim will receive an email saying that someone tried to log into their online exchange account and that they should log in immediately to make sure their funds are still there. A link is provided for the victim to click on, which leads to a fake site that looks very similar to the exchange’s real site. This way the phishers get your username and password and then clean out your exchange wallet before you know what’s happening.
These scams may sound scary, but don’t let them put you off being involved with cryptocurrency.
Keep the below tips in mind before making any decisions regarding cryptocurrencies.
NEVER click on a link that is sent to you via email. Rather type in the site’s address in a new tab to ensure you are directed to the exact site you want to go to.
Always research a new coin before buying into it, and that means checking multiple sources.
To be extra safe, rather buy coins that already have a solid and long withstanding reputation.
As with anything, if an offer sounds too good to be true: it probably is! It’s safer to remain slightly sceptical than to buy into a scam.
Keep your special security code completely secret. If you feel you may forget it, keep it written down on a piece of paper and hidden somewhere in your home – a safe is a good option. If it is saved on your computer there is still potential for hackers to find it.