How to buy Altcoins?

With thousands of cryptocurrencies circulating, it can be hard to make sense of everything going on – what are all those coins next to Bitcoin anyway?

There are currently over 2.000 cryptocurrencies listed on different exchanges and growing. There is no way to search for all these projects. However, sooner or later, you may stumble across a great investment opportunity. Knowing that astronomical cryptography returns, you may not want to pass it on. However, buying lesser-known altcoins is more complicated and risky than it sounds. Fortunately, you've come to the right place, as this guide shows you how to buy altcoins safely in 2019.

What are Altcoins

The history of cryptocurrencies began with Bitcoin in 2009. Since the genesis block, it has had the following set of parameters:

• There can only be 21 million Bitcoins.
• New coins are produced every 10 minutes.
• Bitcoin is extracted and protected by huge amounts of computing power.
• It was designed to be a means of payment.

As you can see, Bitcoin has a predefined niche, parameters and use case. But being a technological advance that it is, the technology behind Bitcoin allows for much more opportunity. Despite being the first fully decentralized digital currency, it also paves the way for a diverse ecosystem of other projects and cryptocurrencies. Many visionary entrepreneurs and technology pioneers realize thousands of ways distributed ratio technology (DLT) can revolutionize the way we live. And that's where altcoins come in.

By definition, altcoins are “alternative currencies”. The term literally applies to all non-Bitcoin cryptocurrencies. Popular altcoin examples include Ethereum, Litecoin, Ripple, Tron , Verge , EOS and everyone else.

Many altcoins are just direct copies (forks) of the Bitcoin open source protocol. Others are merely money-making projects or failed experiments. Despite this, there are also many exciting developments with unique value propositions, solutions and features. You just need to separate the wheat from the chaff.

Main types of coins

It's very easy to get lost in the ever-expanding sea of ​​crypto projects and startups. Let's put cryptographic assets into five different categories to make things easier:

Digital currencies

Digital currencies, also known as cryptocurrencies, digital currencies or currency tokens, are designed to facilitate fast and reliable peer-to-peer transactions. Bitcoin and various alternatives fall into this category. In fact, many of them came into being simply by modifying Bitcoin's core code. these coins are Litecoin , Bitcoin Cash , Dash , Zcash and many others. Other digital currencies are written from scratch. Coins like Monero, Bytecoin, Ripple, Stellar, Nano and similar projects still have the same goal but use different approaches.

Utility Tokens

These are tokens that grant specific rights to users, such as access to platform functions, services and privileges. Alternatively, they are called application currencies. In most cases, utility tokens are issued on a blockchain specific or DLT platform (such as Ethereum) and are distributed through initial coin offerings (ICOs). ICOs are used for the development of crowdfund projects. ICO investors, in turn, receive platform tokens. Some projects allow token holders to vote on important governance decisions or stake tokens for bonus rewards. Few popular examples of utility tokens are Basic Attention Token (BAT), Golem (GNT), Status (SNT), Revain (R), Augur (REP).

Security tokens

Security or equity tokens grant buyers a fraction of ownership of the project. In some cases, they represent a company's digital stock and even pay dividends to holders. However, many security token offers were canceled due to regulatory restrictions. However, they are gaining more and more strength. Investors like security tokens because of their benefits, while projects can leverage investor resources. Also note the difference between security tokens and tokenized titles. One is a bond, explicitly issued in a distributed ledger, while the latter is just a chain representation of an existing asset.

There have been a lot of heated debates about what actually constitutes a security token, and it's still kind of a gray area. For example, the US Securities and Exchange Commission (SEC) uses the Howey Test. According to the test, a security token must meet the following criteria:

• It is an investment of money (or other assets).
• The investment is in a joint venture.
• There is an expectation of profit from the work of others.

When equity tokens are classified as bonds, they become subject to federal laws and regulations. In addition, security tokens go through a different issuance process called the Security Token Offer (STO). Once issued, security tokens do not appear in regular cryptocurrency exchanges. They are traded on specialized security token exchanges accessible only to accredited investors. The main examples of tokenized bonds are BCap (Blockchain Capital), Science Blockchain fund and Lottery.com. Projects that help companies launch STOs are Polymath (POLY), Harbor, Securitize and Swarm.

Asset Tokens

Assets Asset tokens are backed by commodities like fiat currency, gold, oil and others. They constitute a digital representation of underlying assets and derive value from them. As a result, most asset-backed tokens maintain a relatively stable price compared to regular cryptocurrencies. Active tokens present a new way to utilize the blockchain, and their market is likely to continue to grow. Essentially, they facilitate the purchase of commodities without additional logistics and transport costs. Popular examples of asset-backed tokens are Tether (USDT), TrueUSD (TUSD) and Digix Gold Token (DGX).

reward tokens

Reward tokens are used to express the status of users in an ecosystem. Like utility tokens, they are used ​​on specific platforms, but instead of purchasing them, users collect them as rewards for active participation. Typically, they are intended to encourage users to complete tasks that feed the ecosystem. However, they can be sold for other currencies on exchanges. Some interesting examples of reward tokens are Steem (STEEM), Lympo ( LYM ), BitDegree (BDG).

Some coins and tokens are very difficult to categorize and fall into multiple categories. Also, there is a segment of cryptocurrencies that seem to have no serious purpose. These projects are often called “joke coins”.

Coins Joke Coins

Jokes work like coins and in some cases act like reward tokens. They can be sent from person to person, and even exchanged for fiat, but most of them were created purely for fun, with no intention of innovating. Some of them are just get-rich-quick schemes without any value, so they are not good investments. Examples of joke coins include Dogecoin (DOGE), Kanye West (Coinye), PonziCoin (PONZI).

Main types of Altcoins by popularity

Some altcoins are easier to get than others. They are listed on several exchanges and are easy to purchase. For example, Litecoin (LTC) is listed on at least 150 trading platforms. Ripple (XRP) is listed on over 110 exchanges. The most popular privacy coin, Monero (XMR), can be found in over 50 exchanges.

However, not all altcoins are so popular. Getting listed on popular exchanges takes time, especially for new projects and their respective altcoins. Lesser known coins are usually listed on only one or two reputable exchanges, which makes acquiring much more complicated. Most of the time, you need to register with multiple exchanges to get specific and discreet altcoins.

How to Buy Altcoins

There are many ways to buy altcoins in various purses, but which one is best for you?

The most convenient way always depends on your situation. Do you already have cryptocurrency? Do you have a trading account? Let's go through the process of purchasing your first altcoins.

Choose a reliable fiat-to-crypto exchange

On most exchanges, altcoins are paired with Bitcoin or Ethereum. You will need to exchange them for altcoins. In some cases, you will need to register and transfer cryptocurrency between a few exchanges to get what you want. On the other hand, it's a relatively easy process, and returns often outweigh the problem. So if you don't have Bitcoins or Ether yet, let's start from the beginning.

First, you need to register with a gateway service. Gateway or fiat-to-crypto platforms are services where you can buy cryptocurrencies with fiat. In our experience, one of the most user-friendly exchanges for beginners is the Crypto.com exchange, which allows you to buy, sell, trade cryptocurrencies and deposit funds into your account with ease. In addition, it comes with a handy Crypto.com app and debit card, which allows you to pay your daily expenses with encryption.

Other reputable and beginner-friendly fiat-to-crypto platforms include
Coinbase (currency review), eToro (broker review), Binance (currency review) and a few others.

Look for a service that meets your needs and is not blocked in your jurisdiction and pay attention to deposit and transfer fees. Some exchanges or gateway brokers offer fast credit/debit card transfers, but it usually costs more than a regular transfer. Also check which cryptocurrency markets they have. Most services always work by listing more cryptocurrencies, so if you're lucky, you might find a desired altcoin listed on an affordable fiat-to-crypto platform. In that case, you should simply buy it there.

Here is a list of popular gateway exchanges and their rates compared:

Always strengthen your account security as soon as you register for a new exchange. You can do this simply by enabling two-factor authentication.

Register and buy Bitcoin or Ethereum

Now that you've chosen the most suitable exchange, it's time to get there, register an account and buy Bitcoins or Ether (or altcoins, if they're listed there). Both Bitcoin and Ethereum are popular and widely accepted cryptocurrencies. They also have most trading pairs, so exchanging them for altcoins is easy and convenient.

Every reliable exchange has a complete guide or extensive FAQ to help you make your first purchase, so it shouldn't be too much of a problem. You can find links for each of them below:

• Coinbase: How to buy Bitcoin?
• eToro: Bitcoin Trading
• Binance: How do I get started?
• Bistamp: How to buy Bitcoin on Bistamp?
• Kraken: Trading Guide

(Optional) Register for Altcoin Exchange

If you get the altcoins you want using a fiat-to-crypto exchange, your mission is done. However, generally fiat-to-crypto exchanges have a very limited selection of altcoins, so what you're looking for may not be there. That's why there are so many so-called altcoin (crypto-to-crypto) exchanges.

Altcoin or crypto-to-crypto exchanges are cryptocurrency markets that do not have fiduciary pairs and deposit options. Typically, these exchanges survive by listing less popular, new, and promising projects that come at a low price but can significantly enrich investors' pockets in the long run.

Here is a table comparing some of the most popular altcoin (crypto-to-crypto) exchanges.

Outgoing	Altcoin pairs	commercial fees	Security
HitBTC	928	0,1%	Insurance
Binance	434	0,1%	Insurance
Bittrex	348	0,25%	highly secure
Poloniex	146	<0,1% / 0,2%	OK
Kucoin	394	0,1%	Insurance

Before choosing an altcoin bag, pay attention to its reputation and security measures. Be wary of platforms with a history of hacks or bad reviews. Switches from cryptography to cryptography are generally unregulated, so be cautious and never take risks you can't afford to miss.

Always strengthen your account security when registering for a new exchange. You can do this by configuring two-factor authentication.

Transferring coins from one exchange to another

After selecting a suitable altcoin exchange, it's time to make a deposit. You do this by withdrawing your cryptocurrencies (probably BTC or ETH) from your gateway exchange wallet (fiat-to-crypto) to the altcoin exchange wallet (crypto-to-crypto). The process is simple and universal for all exchanges.

First, you need to locate and copy the deposit address in the altcoin exchange. Make sure your wallet address is for the asset you are about to deposit. For example, never send Ether to a Bitcoin address. If you are transferring Bitcoin, be sure to send it to a Bitcoin wallet address. This is a simple but critical step! If you don't do it right, you could lose your funds!

Then go to the gateway exchange and navigate to the withdrawal section. Enter the address of your altcoin purse wallet (make sure it is correct) and click the withdraw button. On some exchanges, you will need to confirm the withdrawal using your email. Coins should arrive in minutes or at most an hour, based on network speed and congestion.

Buy Altcoins in a chosen Altcoin exchange

Here comes the fun part – getting your much-desired altcoins. Once the deposit reaches your encryption-to-encryption trade-in wallet, you can go to the market and trade your BTC or ETH for altcoins.
Be aware that buying discreet altcoins carries more risk than getting widely recognized and time-proven projects. Little-known coins with anonymous team members and promises that are too good to be true can turn out to be just elaborate schemes.

Transfer Altcoins to a Hardware Wallet (Recommended)

If you're planning to leave your altcoins in your Exchange wallet, the history of Exchange hacks shouldn't give you a good night's sleep. Most purses are prime targets for hacker attacks because they keep a lot of encryption in their wallets. Also, exchanges have full control over your funds, so they don't belong to you until you store them in a private wallet. Hence the saying "neither your keys nor your Bitcoin".

The safest way to store your altcoins is to use a hardware wallet. Yes, they cost a few dollars more, but that's nothing compared to a complete sense of security. Ledger and Trezor are the most popular hardware wallets. Also, they support many altcoins. However, if none of them provide support for the altcoin(s) you own, you can use the project's native portfolio.

How to buy ICO coins

Now that you know how to buy altcoins, you are more familiar with cryptography than most people in the world.

In addition to regular purchases, you can find initial offers for coins (ICOs) or coins that are not yet listed on any exchange. It doesn't necessarily mean it's a scam, but there are some rules you should know and follow.

when is it safe

There is no foolproof way to identify an ICO or fraudulent coins. However, you can follow these tips when checking to see if it's a legitimate collective selling:

• A secure ICO has transparent communication and requires you to pass KYC.
• Most team members are public and their online presence confirms their involvement in the project.
• Team members have a good reputation and a profile of successful past projects.
• A valid project must have a realistic and achievable goal and utility for your coin. They will try to do something completely different compared to traditional cryptocurrencies like Bitcoin or Ethereum.

What are the risks of investing in an ICO

ICO and unlisted coins are considered the riskiest investments in space. It's much easier to make promises than deliver results. Most ICOs raise money for the purpose of raising money and do nothing else. Beware of unproven teams and people.

How to buy ICO coins

Despite the risks, ICOs are a great way to become one of the first to support a promising project. Furthermore, they can be immensely rewarding. In 2017 alone, an average ICO produced an ROI of 1320%. Of course, that's not the case with all projects, but sometimes it can be worth the risk. Participating in the ICO is not complicated either. Most ICOs raise Bitcoin, Ethereum or other currencies. In most cases, they will have clearly defined documentation on how to contribute. It is very likely that you will need cryptocurrencies or even altcoins to participate.

Hopefully, this guide has helped you better support your favorite projects. If so, please let us know and share this guide with your friends.