How to Start Investing in Cryptocurrency
Cryptocurrency is now big business for investors; there is plenty of money to be made if you have even just a little time to dedicate to these infant currency markets. At the time of writing, according to CoinMarketCap, there were 1890 cryptocurrencies, ranging in value from Bit20 at £189,583 per coin to Bitcoin at £5486 per coin to Sprouts which are worth next to nothing. However, at one point all of these cryptocurrencies were worth almost nothing.
So, I hear you ask, where and how do I buy these cryptocurrencies and what do I do with them?
In the beginning there were the Exchanges!
The first thing you will need to do is open an account with either a dedicated cryptocurrency exchange, or a Fiat money cryptocurrency exchange. Dedicated cryptocurrency exchanges will only change cryptocurrency to cryptocurrency, and won’t accept your GBP or USD or any other Fiat currency, so these must come second if you don’t have any cryptocurrency to start with.
At present, one of the most popular exchanges to send your hard earned cash, to convert to cryptocurrency is Coinbase. Opening a Coinbase account is a simple process, outlined below…
Coinbase Account Registration
- In your web browser of choice, go to Coinbase.com and click on the Sign Up button in the top-right corner.
- A form will appear with fields for your first and last name, your email address, and a password. Make sure to use your real name as shown on your passport or drivers licence as using an alias could delay the confirmation of your identity later on. Double-check that your email is written correctly as well.
- Choose your password. Make sure to use a combination of upper and lowercase letters in addition to at least one number.
- Press the Create Account button.
- A confirmation email will now be sent to your chosen email address. Visit your email inbox and open the email. Within it should be a confirmation link. Clicking on it will open a new browser window which will activate your Coinbase account.
- You will now be presented with a set of steps for confirming your identity. You can skip this for now and do it later but it is worth setting up as the more information you give them, the more cryptocurrency you’ll be allowed to buy per week and the more secure your account will become.
Confirming Your Identity on Coinbase
Coinbase will give you the option to confirm your identity via several methods during the account creation process and afterwards in the Settings > Security options in your Coinbase Dashboard. You can access these options at any time.
Confirming your identity on Coinbase can help increase your buy limit (the amount of cryptocurrency you can purchase on a weekly basis) and can also improve your account’s security. Here’s what you’ll be asked for either from the link in the account confirmation email you would have been sent after creating your Coinbase account or in your Dashboard security settings.
Phone Number: Confirming your phone number is a very simple process. You’ll be asked to select which country your number is registered in and for the number itself. After submitting this information, Coinbase will load a second webpage and will send an SMS to your mobile with a code. Enter this code in the verification field on the new page and click the blue Verify Phone Number button.
Address: You will be asked to fill in your residential address after confirming your phone number in the initial account setup or in Settings > My Profile section of the Dashboard after logging in. As with other account information, it’s important to be truthful here. The Country field in particular is very important as it will determine which financial services you can use on Coinbase and how much you can buy or sell.
Document Verification: After the address section in the initial account setup, you’ll be asked to confirm your identity by sharing copies of government approved ID such as a passport, proof of age card, or drivers licence. The requested documents will vary depending on which country you’re based in. If you skipped this option initially, you will be reminded to submit this information in your Coinbase Dashboard after logging in. You can also find the option to submit your documents via Settings > Limits.
- In the account setup, you will be shown a blue button that says Start verification. Press it to begin the process.
- After beginning the document verification process, you will be given a choice of two to three document types. Click on the one that you wish to use such as your passport or drivers licence.
- The next screen will have a camera feature that will enable your device’s webcam. Hold your ID in front of your webcam and press the Take snapshotbutton to take a photo of it.
- A preview of the photo taken will soon display on the page. If the photo is clear and shows your face and all of the necessary text, press the Finish & start verification button. If you want to redo your photo, simply press the Take another snapshot button to try again. You can try as many times as you like.
- Coinbase can take several days to over a week to verify your submitted document.
Coinbase Payment Options
Coinbase users in the UK can use PayPal to redeem cryptocurrency for cash, wire transfers for withdrawing and depositing funds, and credit and debit cards for buying cryptocoins. The best option by far though is to link a bank account to your Coinbase account as this payment method can be used for buying and selling crypto as well as depositing and withdrawing funds.
You’ll be asked to add a payment option after verifying your identity in the initial account setup. If you chose to skip that option, you can add a payment method from within your account by clicking on the Buy / Sell link in the top menu and choosing Add a new account under Payment Method.
Adding your debit or credit card information usually allows for the immediate buying of Bitcoin, Litecoin, Ethereum, and Bitcoin Cash on Coinbase. Adding PayPal is also instant. When submitting your bank account information though, there is usually a two-day (or more) waiting period before it can be used to buy or sell with.
Increasing Coinbase Buy Limit
Coinbase usually limits new accounts with a £250 buy limit. This is done to prevent money laundering and other illegal activities. Limits can be increased by doing each of the following.
- Completing Your Profile: Filling in all of your Coinbase account information is the quickest way to increase your buy limit. This includes adding (and confirming) a phone number and submitting at least one identification document.
- Make Regular Buys: Coinbase accounts that are frequently active usually get their buy limits increased. Try to make one small purchase per week for a month or two.
- Wait: The older an account is, the more legitimate it appears in Coinbase’s eyes. Newer accounts are usually limited while older ones have their limits removed eventually.
How to Get £7 of Free Bitcoin With Coinbase
Anyone can join Coinbase for free from the Coinbase website but if you know someone else who is already a member, it’s worth asking them to invite you first. If you sign up for Coinbase via someone’s invitation, not only will that person’s account be credited with £7 worth of Bitcoin but so will yours whenever you spend over £77. Furthermore, once you’ve created your account, you can refer your own friends to earn another £7 of Bitcoin.
- To invite someone to Coinbase, log into your account and click on your name in the top-right corner of the screen.
- A menu will drop down. Click on the Invite friends option.
- You’ll be taken to a page with the option to invite people to Coinbase via Facebook, Twitter, or email. The page will also display a website link that you can share on another social network like Instagram or even within a blog post.