How To Buy Cryptocurrency In The UK
Looks like you’ve decided to invest in cryptocurrencies but feel unsure where to start. You must have tons of questions going around in your head such as where do you buy these coins and where do you keep them afterwards.
The purpose of our guide is to provide you with the answers to these dilemmas and more! We’ll talk about what makes cryptocurrencies so attractive, what are your options, and what tips you should follow to avoid potential losses. So, let’s get started!
Where to Buy Crypto?
Buying cryptocurrencies is super easy once you find a crypto exchange that matches your investment plan. You’ll just sign up for an account, wait for your account to be verified, deposit money, and get to business. On these platforms, you can buy, sell, exchange, or send digital coins to someone else. If you haven’t bought any cryptocurrencies before, look for an exchange that supports fiat to crypto conversions.
For UK residents, our choice for the best crypto exchange goes without question to the native platform CEX.io. The exchange supports more than ten different cryptocurrencies including the most popular ones such as Bitcoin, Ethereum, Litecoin, and Ripple, but the best part is that you can buy all of them with GBP. Experienced traders are encouraged to make the most out of cross-platform and margin trading. Finally, CEX.io has a working license and complies with the AML and KYC policy.
Find Out More About Crypto
Who could’ve thought ten years ago that finance would have a counterculture? But that’s exactly what Bitcoin, the first digital coin, was all about. The idea for Bitcoin was born out of a philosophy that expressed its disdain for the traditional financial system and its distrust in financial institutions.
Gradually, Bitcoin got its support from three sometimes overlapping groups: the crypto enthusiasts or blockchain technology aficionados, the original investors who believed in Bitcoin’s potential from the start, and traders who were drawn to the speculative nature of Bitcoin’s price and hoped to make some profit. During the following ten years, these three groups merged and the crypto community grew exponentially. Today, the total market capitalization of the crypto market exceeds $223 billion!
The History of Cryptocurrencies
In the early 1980s, the idea for a digitalized version of money entered the minds of a number of computer scientists and cryptographers. The driving force behind their sudden urge to digitalize the whole financial system was primarily the lack of privacy in money transactions. Should banks keep their role as intermediaries and central authorities in these transfers?
In the next couple of years, there were some attempts at creating digital cash and an electronic payment system but none of them took off. It wasn’t until 2008 when Satoshi Nakamoto published the whitepaper “Bitcoin: A Peer-to-Peer Electronic Cash System” that a real solution was proposed for the challenges of online payments.
In the paper, Nakamoto developed his peer to peer network for verifying transactions based on cryptographic proof instead of trust that “would allow online payments to be sent directly from one party to another without going through a financial institution.” The fact that the banking crisis was in full swing made a growing number of people to consider Bitcoin as a possible alternative.
Cryptocurrencies in the UK
A few years had to pass before governments around the world accepted that the crypto industry is the future and started thinking of ways to regulate it. Some of them tried to restrict the use of cryptocurrencies out of fear of the effect their trading would have on the financial industry. Others welcomed their use and praised the potential of blockchain technology.
In the UK, crypto trading remained unregulated for years and the status of cryptocurrencies was undecided. In 2019, the United Kingdom Jurisdiction Taskforce of the LawTech Delivery Panel published a Legal Statement on Crypto Assets and Smart Contracts, where cryptocurrencies were finally classified as property. Based on that, they were subjected to Capital Gains Tax (CGT) or Income Tax (IT) depending on the transaction. The Financial Conduct Authority (FCA) took the role of anti-money laundering (AML) and counter-terrorist financing (CTF) supervisor. All crypto exchanges are now asked to register with FCA and comply with their rules.
Investing in Cryptocurrencies
From the looks of it, cryptocurrencies continue to be an attractive investment for traders around the world, be it individuals, small businesses, or large corporations. As the price of Bitcoin keeps rising, a lot of these traders have made big money by trading.
However, crypto trading is extremely volatile, and anyone who decides to join the community of traders should do so on his/her own risk. The changes in coin prices are unpredictable and their nature speculative. Taking part in such a market means that you need to take responsibility for your actions and be prepared to face potential losses. Never trade more than you dare to lose!
Should You Invest in Cryptocurrency?
People like investing in cryptocurrencies because they like the idea of speculating on their price and betting against it. They hope that the limited supply of some of these coins, take Bitcoin’s 21 million hard cap, for example, will drive their prices even higher up the scale. Therefore, they hold on to them and sell them later to make a profit.
In the last year or two, Bitcoin has been accepted at a number of retail and grocery shops, food chains, travel agencies, and flight companies around the world. There are even Bitcoin ATMs! That’s why a lot of people decide to use the coins for daily purchases instead of hoarding them for future use.
Often enough, people get involved with cryptocurrencies because they support their original philosophy and hope that soon enough digital coins will make fiat currencies obsolete in the new decentralized financial system. When that finally happens, these investors would be ready and their wallets full.
What Cryptocurrencies are There?
Despite the incredible number of 5,000 cryptocurrencies that are available to crypto traders, it seems that Bitcoin is still way ahead of the race. This hardly comes as a surprise as it was the first digital coin to conquer the market and has kept a leading spot as a store of value ever since. Bitcoin’s current worth falls no short of 6,041 British Pounds!
People often wonder why we need more than one digital coin, especially now that Bitcoin’s price fluctuations have been less wild and more and more businesses are accepting them as a payment method. The truth is, cryptocurrencies fulfill more than one purpose. Apart from being used as tradeable assets, they can be used as payment for smart contracts and DApp services like Ethereum.
In addition to this, a lot of central banks around the world, including the Bank of England, are currently weighing out the pros and cons of launching their own central bank digital currencies. This will be a gamechanger for the whole financial industry!
What to Do When You Have Bought Your Cryptocurrency
Most people store their cryptocurrencies online, in a digital wallet provided by the crypto exchange they’re using or a third-party platform built for that purpose. The good thing about keeping them on the exchange is that the wallet supports the same coins supported by the platform, as opposed to some online wallets that are limited to Bitcoin or Ripple only. This way you have full control of all your assets lying secure in one place.
Or are they secure? Most crypto exchanges are easy targets for skillful hackers especially if they don’t keep customers’ funds in cold storage. At the moment, the most popular solution for safely storing your coins is purchasing a hardware wallet protected with a personal key that guards you virtual encrypted coins.