Over the last few months, cryptocurrency has become a go-to topic for discussion. You would have heard your friends chit-chatting about investing in cryptocurrencies, and if not that you must’ve heard the people going crazy over the soaring prices of Bitcoin, Dogecoin or Etherum. So, if you’re also intimidated by your friends and wants to know more about investing in cryptocurrency, then no need to worry, as we have put together a quick guide to help you out. Buying a cryptocurrency is not much different from setting up a digital wallet or ordering something from an e-commerce website. But, first, we need to understand what cryptocurrency is?
What is a cryptocurrency?
A cryptocurrency is a digital form of currency protected using cryptography that can be exchanged for goods, services, and other commodities. The cryptocurrency is based on the concept of decentralization, more often referred to as blockchain technology, making it a fool-proof currency as it can’t be counterfeited, and a single party doesn’t own it.
Cryptocurrency does not have any physical existence, but you can use it to buy products, services or transact with someone holding a digital cryptocurrency wallet. You can also sell your cryptocurrency and take back the invested amount with a profit or loss at any exchange.
How to buy cryptocurrency in India
What does ‘decentralized’ means?
The cryptocurrency doesn’t follow the rule of centralized governance. Cryptocurrencies are minted worldwide using complex calculations, making them a decentralized currency, meaning no central authority has control over them. So, if you are holding cryptocurrency in some wallet, it can’t be seized by anyone, not even by the government, making it one of the safest ways to invest your money.
What is a cryptocurrency exchange?
Cryptocurrency exchanges are brokers for trading cryptocurrencies in turn of digital or fiat currencies. A cryptocurrency exchange is not much different from a stock exchange across the globe. These exchanges add a layer of security as you won’t be dealing with an anonymous group or person. The cryptocurrency exchange platform also adds a sense of reliability since they work according to government regulations.
Also Read: Top 5 Cryptocurrency Wallets in India
How to buy a cryptocurrency in India?
The first step to buy a cryptocurrency in India is to open an account with one of the trading exchanges. Some of the cryptocurrency trading exchanges functional in India are WazirX, CoinSwitch, CoinDCX, and UnoCoin. But you must be thinking about which one’s the best. Well, choosing the best exchange could be quite tricky, but you should keep few things in mind before continuing with any of them.
- First, the cryptocurrency should allow you to withdraw your invested amount in INR.
- The exchange should comply with Indian KYC regulations.
- Also, don’t forget to use two-factor authentication.
Now, you need to complete your KYC. For that, you can use your AADHAR card and PAN card. After getting done with verification, you can start adding funds to your account. You can add money to your account using NEFT, RTGS, UPI or other wallets. After successfully adding funds to your account, you can start browsing through the exchange and select a cryptocurrency of your choice to buy. Now, you can proceed with the purchase, but make sure you have enough balance in your account and, if not, deposit the needed amount in the account. Now, the value of cryptocurrency bought should start showing under your portfolio in the app.
To note, it’s not important to buy one whole cryptocurrency, unlike stocks. You can also buy a small amount of cryptocurrency and keep investing small amounts. Currently, one Bitcoin is valued at around 34 lakh; but, you don’t have to buy one whole Bitcoin to start investing. You can buy Bitcoin with as low as Rs. 100 and own a small chunk of it.
It is important to do viable market research before investing in any cryptocurrency. Never invest in haste. Double-check everything before transacting. Also, don’t buy cryptocurrencies from any shady website or app promising to offer you a lower price than the market. Keep checking the government regulations surrounding the trading of cryptocurrency.
Is it illegal to buy cryptocurrency in India?
No, buying cryptocurrency is completely legal in India. There is no law prohibiting the trading of cryptocurrencies in India. So, you can invest in cryptocurrency just like you invest in stocks, mutual funds and gold online. But, it is advisable to deal with caution.