How to Buy Cryptocurrency in Australia? — A simple guide
Choosing to buy cryptocurrency is not hard to understand. It’s a way to revolutionize your assets and money into the digital age. Cryptocurrency is a digital currency that designed to work safely and secure in the world of the internet. It uses digital files as money and encapsulated with strong cryptography methods. And in a lot of cases, it is based on blockchain technology and decentralization networks.
Everything you need to know about digital currency
Now, if those explanations are still overwhelming you, here is the definitive guide to understand cryptocurrency and its world.
Why does cryptocurrency have value?
Cryptocurrencies like any other currencies are built on the fact that when traded for a service or commodity, they can facilitate that transaction fast and efficiently at a low cost.
However, the added value here is the trustless blockchain ledger which requires no middle man or centralized authority to facilitate such a transaction. This saves on fees, increases security and puts control back in the hands of the rightful owner of the currency. Cryptocurrencies like Bitcoin for example are also becoming a fantastic store of value over time with good long term returns. Cryptocurrency allows us to transact, anywhere in the world, regardless of demographic or geographical location and allows us to do this at low cost, at minute quantities, in minutes.
How cryptocurrency is created?
Cryptocurrency is created using cryptography which is basically combinations of numbers in certain patterns to represent transactions.
Bitcoin, the first Cryptocurrency was created by the anonymous handle of ‘Satoshi Nakamoto’ this could be a single person or a group of people but once a mathematical equation is solved then the Bitcoin protocol releases Bitcoin to the node or computer which solved the problem first. This is how Bitcoin is created.
What determines cryptocurrency value?
Just like any market, whether it be a service, commodity, online gambling cash, online gaming item or anything in between. It is about supply, demand and of course scarcity.
Why were cryptocurrencies created?
Cryptocurrencies were created to give the people back control over their own hard-earned money and provide trustless digital accountability in doing so.
Free of overbearing and unwanted fees to power-hungry controlling corporations. Crypto was also created to provide the unbanked population of the world which is somewhere in the region of 1.7 billion people, financial independence. These people generally don’t have access to banks or proper identification but the majority own mobile phones/cell phones. This gives them access to the internet and the blockchain. With this technology, they can now transact between one another or globally in seconds and have somewhere to securely hold their personal wealth.
What do miners do? Like cryptocurrency miners?
A cryptocurrency or Bitcoin ‘miners’ are simply computers which run, in Bitcoin’s case, the Bitcoin protocol which basically makes your computer or network of computers calculate random mathematical equations using algorithms to try and find the answer to a random but very complex mathematical question.
Whilst completing this mathematical equation, your computer and all other computers connected to the Bitcoin network are working hard independently or sometimes in pools to solve the question. This, in turn, provides the network with computing power to facilitate, record and verify transactions on the network at the same time.
The reward for all this work? The first computer or pool of computers to solve the mathematical equation is rewarded with (currently) 12.5 Bitcoins. This depends on the difficulty of the equation which increases every 2016 block. Some pools split this evenly and some split it depending on the CPU power provided to the pool etc. The average block time is 10 minutes which is why it takes roughly 1 hour to complete 6 confirmations on the Bitcoin blockchain.
In a nutshell ‘mining’ is connecting to a network and chipping away at a maths problem until it is solved. When solved the ‘miner’ is rewarded in said cryptocurrency. This POW or proof of work ensures the network of transactions are facilitated and verified.
How to buy cryptocurrency in Australia?
Are you confident to buy cryptocurrency safely & securely, after creating an account on a cryptocurrency exchange in Australia?
Buying, selling, storing & managing cryptocurrency seems like a complex & complicated procedure that requires extensive knowledge prior to investing. However, this is definitely not the case.
The following steps are a minimum requirement of how to buy cryptocurrency in Australia:
- Choose the right cryptocurrency
Cryptocurrency is a decentralized, digital asset. It is highly volatile in nature, therefore, invest only what you can afford. Always do your own research before buying cryptocurrency. An easy way to choose a specific Cryptocurrency is by reviewing the history & charts of cryptocurrencies which are available on CoinMarketCap & choose the currency which increases in value over time or excites you the most.
This all depends on the reason for investment for example, whether it is a long or short term investment or It could also depend on the risk you wish to take and the amount of money invested. The most prominent cryptocurrencies in Australia are Bitcoin, Ethereum, Ripple, Bitcoin Cash, Litecoin and many more.
Each of these cryptocurrencies has its own technology embedded within them and due diligence should be taken before making any investment decisions.
- Create a wallet
Wallets are used to send, receive & store your crypto assets. Cryptocurrency can be stored in a multitude of wallets including software wallets. These wallets are online wallets like mobile wallets. This type of wallet is easy to access the liquidity of your funds & its utilization is also easy. Online wallets are perfect for making online shopping payments for example.
Another kind of wallet is a hardware wallet which is not linked to the internet. These wallets are considered the best option when it comes to security and if you have large amounts of cryptocurrencies to store. A user can transfer crypto assets from hardware wallets to online wallets flawlessly and confidently with no worries once shown.
It is a well-known lesson to try and avoid leaving your cryptocurrency on online exchanges, use cold storage hardware wallets like Ledger Nano S or Trezor to keep your cryptocurrency safe from hackers and failing companies. As they say “not your keys, not your crypto”.
- Research Exchanges
Firstly choose an exchange that is based in Australia and allows Australian Bank account deposits for example Easy Crypto Australia. Some exchanges are limited in their options for purchasing cryptocurrency whereas some exchanges make it fast, simple and safe when it comes to buy cryptocurrency including but not limited to Credit card, Debit card and Bank transfer.
In addition to these points, we should not negate the fact that fees are involved and we should research how much fees would be paid for crypto transactions to make sure we pick a competitive exchange.
Here are three types of fees you may encounter — deposit fee, transaction fee, and withdrawal fee.
Each set of fees is different on different exchanges. The lower the fee the more profit in your digital wallet. But never forget the price of convenience and safety. It all has its place when choosing an exchange.
- Take some security measures
Keep all information safe & secure, for example, wallet password & login credentials should be kept safely offline. Use new emails & a single password to register your account with exchanges, use 2FA & download Google Authenticator as an extra layer of security, make sure you are not visiting a fake site and double check domain addresses, never click on a link sent you through email & always transfer your crypto funds from exchanges to your cold storage wallets. Remember NO ONE requires your private keys except YOU!