BUY, sell & trade crypto
A beginner's guide to all things tokens and cryptocurrency.
Getting started in crypto is really a simple process. You can begin by purchasing some cryptocurrency for your own use, and it takes only a small initial investment. Depending on which exchange you use, you might be able to purchase some crypto for as little as a few dollars.
For the curious beginner, Ava Labs has put together an overview of how to buy and sell cryptocurrency. It will not turn you into a crypto expert but should give you the basic tools to navigate this exciting field and point you in the right direction for further explorations.
Know What You’re Dealing With
As a crypto beginner, you’ve probably never owned any of these kinds of digital coins, and you might not be certain exactly how they differ from “real” money. It’s worth taking a few moments to make things clear. Cryptocurrency is a digital asset—it exists on blockchains (a type of distributed ledger) maintained by computer networks that are in turn managed by countless private users across the globe.
When you buy crypto coins, your ownership of these assets and the timestamp of the transaction is immutably recorded on the relevant blockchain. The coins are not “sent” to you in any sense. You have control over your coins due to your private key, a long, randomly generated string of numbers and letters that you alone know.
If you sell your crypto, the details of that transaction will be added in a new block that will be appended to the blockchain. The blockchain’s consensus (voting) protocol ensures that the transaction has been completed in valid fashion. Because all the blocks are linked to one another with hashes—each contains the data of the previous block—it is impossible to falsify data without detection, as altering one block creates an immediate cascade effect in which all previous blocks are altered.
The cryptocurrency ecosystem is much more volatile than the traditional fiat currency sector; wild swings in value occur frequently. That’s one of the reasons why crypto should not be approached as a get-rich-quick scheme, especially if you’re just starting out.
Having said that, how do you go about acquiring your own crypto?
First Step: Buy Crypto
You have quite a few options when it comes to purchasing cryptocurrency. There are literally hundreds of credible crypto exchanges in existence, offering a wide range of coins. Even some traditional brokers provide crypto services, although these tend to be restricted in scope. If you’re already working with a broker who handles your stocks and other standard banking services, you might try contacting them to see what kinds of crypto options they offer, if any.
Most beginners, though, will end up buying their first coins from a cryptocurrency exchange. Some of the more widely used exchanges include Coinbase and Binance, but these are far from the only valid options for the crypto novice. It’s worth taking the time to research the terms and conditions of an exchange before you sign up. Important features to look for include:
Payment options - As a beginner, you need a crypto platform that allows you to use standard fiat money (e.g., U.S. dollars) to fund your account. You usually have the option of using a debit/credit card, a wire transfer, or your bank account, but some exchanges don’t allow all of these. Be sure to check the fees associated with each option.
Security - Crypto exchanges don’t usually have the kinds of insurance associated with traditional brick-and-mortar banking. If you lose your crypto due to hackers, you may have no recourse. However, some exchanges carry insurance that can provide compensation in the event of disaster.
Types of crypto - There are many different cryptocurrencies out there, but not all are necessarily available on any given exchange. Bear in mind, however, that you can convert one type of crypto to another at a future date.
Storage options - With crypto exchanges, you often have the option of storing your crypto on the exchange or transferring it (actually your private keys) to your own wallet. Keeping it on the exchange is the easiest solution, but it also exposes you to hacking. For that reason, most users prefer to set up their own wallet (see below for details). Be aware that some platforms won’t allow you to transfer your crypto out of your onsite account, and you need to be certain you are comfortable with that before you proceed, as it would limit your future options in regard to the coins you purchase.
Fees - Exchanges levy fees for various transactions, such as executing buy or sell orders, and these could add up to more than you’re interested in paying.
In addition, you should research whether the exchange is compatible with the Avalanche network, and how to transfer crypto to it properly. Failure to follow correct procedure can result in the loss of your coins.
The specific buying process varies according to which platform you’re on. It’s usually possible to make your first purchase very cheaply, as coins can be bought fractionally. However, there may be a minimum purchase threshold that you must meet.
When you sign up for an account with an exchange, you may need to provide personally identifiable information in conformity with what the financial industry calls Know Your Customer (KYC) requirements.
Second Step: Set Up Your Storage Option
As mentioned above, you often have the option of keeping your coins on the platform, but most crypto enthusiasts advise setting up a non-custodial wallet. By “non-custodial,” we’re referring to a type of wallet where you are in full control of your private keys, whereas a custodial wallet is one controlled by a third party.
A non-custodial wallet gives you complete control over your account, which is useful for your crypto education as it helps you familiarize yourself with the decentralized, trustless nature of blockchain technology. As a common crypto saying goes, “Not your keys, not your coins.” If you're serious about learning how to invest in cryptocurrency, your best option is to assume responsibility for managing your account. But be advised that you need to keep your private key in a safe place, as losing it will mean losing access to your coins.
There are a variety of non-custodial crypto wallets out there. If you’d rather avoid doing a lot of comparative research, one good option is to simply download Core. This is actually a complete Web3 operating system designed for the Avalanche ecosystem, and it’s free of charge. It gives you easy access to the networks and subnets of the Avalanche platform. Core users can always consult our large collection of how-to articles for help in mastering its various options.
Third Step: Sell or Trade Your Crypto
So what if you want to sell your crypto? One of the benefits of cryptocurrency is the option to “cash out” and sell your coins for fiat currency. It’s called “off-ramping” your crypto. You can perform this action through your cryptocurrency exchange or with your crypto wallet. Selling crypto may be subject to minimum amount thresholds set by the exchange.
When selling on an exchange, you generally have the option of placing a limit order (sell at a specified price or more), market order (sell a certain amount at the best possible price), or stop order (sell a certain amount only when the asset has sold at a specific price). There are a number of useful trading strategies, all of them beyond the scope of this crypto-for-beginners article.
You may at times wish to exchange one type of coin for another. This is known as a “token swap” or “token migration,” and it’s a common procedure. Sometimes you need to swap coins to participate in another blockchain platform. Whatever your reason, this is another procedure that Core can help you with, as it’s configured to enable quick and easy token swapping.
That’s hardly all you can do with your crypto. For instance, it’s possible to use your coins to make real-world purchases from vendors that accept this cryptocurrency. A number of charitable organizations are also set up to process crypto donations. On the Avalanche platform, your AVAX can also be used to support the ecosystem by staking on validator nodes.
You may wish to join the vibrant Avalanche community, which draws participants from all over the globe and all levels of expertise. By using Core and consulting the resources we have made available to novices, you can easily explore many features of the Avalanche platform and learn more about the fascinating world of blockchain.
Building a Better World With Blockchain
Ava Labs’ dedication to promoting socially responsible activities manifests in various ways—through maintaining its Avalanche platform in an eco-friendly manner, through its campaign to popularize energy-efficient blockchain technology across the business sector, through its direct financial support to a number of carefully vetted crypto startups, and through its endorsement of general “green” policies.
At the heart of these efforts is a strong belief in the revolutionary potential of blockchain to improve everyday life by digitizing the world’s assets.