CCryptocurrency

How To Buy Altcoins: A Beginner’s Guide To Buying Altcoin

Altcoins arose immediately after Bitcoin (BTC), providing a viable alternative to the most well-known cryptocurrency. It accounts for over 80% of the cryptocurrency market with over 5,000 cryptocurrencies in use.

This article covers various topics, including what an altcoin is, how to buy altcoins on various platforms, and how to trade them.

Cryptocurrencies provide a plethora of entry points into the industry. When writing, over 6,000 cryptocurrencies were traded on 250 different exchanges worldwide. Every day, new cryptocurrencies emerge while old ones fade out of favor. The market is growing at the moment. The crypto gold rush is attracting an increasing number of investors, corporations, governments, and consumers.

Altcoins allows users to make a lot of money, especially if they know how to get the most out of their current altcoins. This may be used as a brief guide for first-time cryptocurrency investors.

Table of contents

What Is An Altcoin?

The term “alternative coin” is abbreviated as “altcoin.” Altcoins, which include Litecoin (LTC), Uniswap (UNI), Dogecoin (DOGE), Zcash (ZEC), and Cardano, are all cryptocurrency coins that are not Bitcoin (BTC) (ADA).

Since Bitcoin’s debut in 2009, a few other cryptocurrencies have emerged, with more appearing regularly. These Bitcoin alternatives begin to deviate from the Bitcoin consensus method, adding various privacy features, functions, and supply schedules.

The altcoin approach of adding extra features makes them more appealing and valuable than their original equivalent (Bitcoin), and investors see them as having more usefulness.

Are you wondering if buying a bitcoin with your credit/debit card is easy or difficult, or you gotten stuck while trying to buy a bitcoin?  See How to Buy Bitcoin with Credit or Debit Card.

The following are some of the most popular altcoins on the market right now:

1. Ethereum

By market cap, Ethereum is the second-largest cryptocurrency after Bitcoin and the largest altcoin. Many investors, however, no longer consider it an altcoin because of its price stability potential; it is a more risk-adjusted investment than most altcoins.

Ethereum was the first blockchain to provide smart contracts, paving the way for decentralized finance (Defi) and emerging financial instruments. In contrast to Bitcoin, which is primarily a transactional protocol, Ethereum is regarded as a true money protocol.

Ethereum may also be used to lend, borrow, short, and long, among other things that are impossible with Bitcoin’s foundation layer.

If you are looking to invest in Ethereum, you need to know this Before You Invest In Ethereum- This is What You’re Facing In 2023

2. Litecoin (LTC)

Litecoin is a fork of the original Bitcoin mechanism and is the silver counterpart to Bitcoin’s gold. It uses a new hashing method (Scrypt) and has a higher block processing speed, resulting in a 4x increase in production capacity over Bitcoin. It was, however, condemned as a pointless (and ultimately unneeded) Bitcoin fork.

Related Post: How to buy Litecoin with a Credit Card in 2023 | Easy Guide

3. Stellar (XLM)

Stellar, unlike the majority of cryptocurrencies, concentrates on international bank transactions. Stellar uses distributed ledger technology (DLT) to transfer value across borders and convert cryptocurrencies into fiat currency.

4. Ripple (XRP)

Ripple (XRP) is a well-known digital payment platform hosting cryptocurrency. It’s also one of the most common cryptocurrencies and uses a consensus mechanism that is different from Bitcoin’s traditional proof-of-work (PoW) mining process.

See How To Buy Ripple Stock In 2023 | Step-By-Step Guide

5. Uniswap (UNI)

The first decentralized exchange (DEX) is Uniswap, which runs on the Ethereum blockchain. As a result, Uniswap employs the ERC-20 algorithm, which is built into its platform. Sushiswap (also on Ethereum) and PancakeSwap are two copycat rivals in the field, thanks to their open-source nature (on the Binance Smart Chain).

Where Can I Buy Altcoins?

Traders can now buy, hold, and sell altcoins on various platforms. However, each platform has its own set of privacy policies and features. As a result, the best cryptocurrency exchange is determined by several variables, including buyer preferences.

Many users, however, have lost money as a result of frauds and flaws that have been exploited on various exchange platforms. As a result, each investor is responsible for trading on a trustworthy exchange.

If an investor wants to trade privately with another investor through direct transactions, they should make an effort to find trustworthy traders. Before investing cash, one of the greatest methods to safeguard one’s assets is to undertake extensive research on each platform and trader.

You can buy altcoins from reputable exchanges like Coinbase, Binance, KuCoin, eToro, or Crypto.com instead of lesser-known platforms.

Users should shop around before purchasing to study the allowed exchanges in their jurisdictions and verify the exchange markets to ensure they can access the cryptocurrencies they want.

READ ALSO: How to Buy Coinbase Stock in 2022

How To Buy Altcoins

The method for buying cryptocurrencies on different sites may change somewhat, but the stages are largely comparable and quite basic.

While exchanges are safe for beginners and help users avoid fraud, advanced traders may prefer to buy altcoins directly from owners.

Many altcoins may be purchased in only a few steps after acquiring bitcoin. We recommend buying Bitcoin (BTC) and trading it for the altcoin of your choice in this article. On one of the exchanges, many, if not all, altcoins should be paired with BTC.

You do not, however, have to buy cryptos through exchanges. Cryptocurrencies can be bought directly from another owner or over the counter. To protect themselves from fraud, we recommend that beginners use exchanges.

Here’s a step-by-step process for buying Altcoins:

Step 1: Set aside a percentage of your portfolio for the investment

Many other teams have released their currencies and vanished after dumping their allotted quantities on the market, while most altcoins are still in the experimental phase (also known as a rug pull). As a result, a large number of blockchain ventures fail soon.

Purchasing altcoins is a high-risk investment, with a high likelihood of the coin collapsing. As a result, separating a portfolio into multiple risk layers is a good idea, especially for investors interested in lesser-known cryptocurrencies.

Want To Buy Dogecoin? What To Know Before You Purchase

Step 2: Do some research to find the most potential coins

For investors, there are thousands of cryptocurrencies to choose from. The suitability of one for investment is determined by several criteria, including the investor’s requirements and preferences.

As a result, every user should become more knowledgeable about cryptocurrencies associated with their preferred projects. They should also consider their various characteristics and choose the coins that appeal to them the most.

Step 3: Convert fiat money to cryptocurrency

Most exchanges do not enable U.S. dollar purchases since they are not fiat on-ramp platforms. As a result, investors must first purchase supported cryptocurrencies before exchanging them for altcoins on the exchange.

Several exchanges enable you to buy cryptocurrencies directly with a credit card, making getting coins for an altcoin exchange simple.

Litecoin is one of the most popular cryptocurrencies in the world and is even referred to by some as silver to Bitcoin’s gold. See How to buy Litecoin with a Credit Card in 2022 | Easy Guide

Step 4: Select the appropriate exchange

Investors will need to define the exchanges that offer their preferred altcoins once they have a bag of cryptocurrencies ready to trade. Because popular exchanges have high liquidity and fewer fraud cases, new buyers are safer transacting on them.

As a result, it’s critical to locate various cryptocurrency exchanges that provide a favorable trading pair. Users can start trading their coins after they’ve found the trading pair they desire. However, before making a deal, there are a few things to think about:

  • Is the exchange trustworthy?
  • Is there any evidence of hacking or bug vulnerabilities on the platform in the past?
  • What are their rates in comparison to those of their competitors?

You may want to see: 10 Best Alternatives To Coinbase

Step 5: Select a currency pair to trade

The next stage is to link a Web 3.0 wallet to the exchange to store the cryptocurrencies. Before executing the trade, the user should take note of the currency pair’s patterns and performance over the previous month or a few weeks to determine that the transaction is executed at the optimal moment.

Step 6: Put the transaction into action

It’s time to initiate if the conditions appear good and the user is prepared to make the deal. If you’re new to trading, research how orders operate before placing an order on the exchange for the cryptocurrency you want.

Step 7: Verify that the altcoins have been added to the wallet

The bitcoin will already be in the wallet when the deal is completed. When an exchange is centralized, the only time a user needs to move funds from the exchange to their wallet is when the exchange is centralized. Unless funds are supplied for liquidity pools, yield farming, or any other Defi mechanism, monies are not held by DEXs.

Cold (sometimes known as “hard” since they’re hardware) and hot wallets are the two types of crypto wallets. Cold wallets, like Trezor and Ledger, are USB-like devices that hold a user’s private keys, making it impossible for hackers to manage a user’s cash unless they also have physical access to the hard wallet.

Hot wallets, on the other hand, are linked and hosted online, whether through a phone app (Trust wallet, for example), a desktop program (Daedalus), or a web app (Metamask). Hot wallets are more susceptible in terms of security, but consumers benefit from the reduced security.

Conclusion

Although altcoins often increase in lockstep, unsuccessful ventures will inevitably sink. And most new initiatives have a short lifespan. On the other hand, solid cryptocurrency projects like Ethereum, Polkadot, Cardano, and Polygon have endured the test of time and deserve deeper investor attention.

Also, remember that altcoin values are still tied to BTC, so whether BTC rises or falls, altcoins tend to follow suit (after ETH). However, people should be cautious when choosing an altcoin to invest in.

References

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What’s up, I’m Dums. I help brands gain visibility through SEO Writing and other applicable Content Marketing Strategies. My educational background includes a BSc in Mass Communication with a focus on writing for the New Media.

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