This tutorial is broken down into two parts; part one is how to get set-up on an exchange called “Binance”, and part two, is how to actually do the buying.
Part 1: How to Create a Binance Account
Since Bitcoin, Ethereum, and all of the other major crypto assets are not issued by a central authority such as; a bank or a company, their prices are not fixed or constant, but instead, they fluctuate. This flux is dependent upon what people are willing to pay for them. As a result of this, the place to buy cryptocurrency is what is known as a “cryptocurrency exchange.”
In a fiat toward cryptocurrency exchange, buyers and sellers meet to exchange fiat currency such as: USD, EUR, JPY for popular cryptocurrencies, such as: Bitcoin, Ethereum, Litecoin, or vice versa. To buy less popular cryptocurrencies (also known as alt-coins), different exchanges exist where people can exchange Bitcoin, Ethereum, or Litecoin for these less popular crypto assets.
The two currencies involved in a trade are what is known as the “trading pair”, and are represented by the three or four letter “ticker symbol” for the involved currencies. The ticker for the US dollar is USD; the ticker for Bitcoin is BTC; the ticker for Ethereum is ETH and so on. A full list of cryptoassets and their ticker symbols can be found at www.coinmarketcap.com. A good example of trading pairs (which usually are abbreviated using ticker symbols) would be, if you are buying Bitcoin with US dollars, you would use the BTC/USD trading pair. If you are buying Ethereum with Bitcoin, you would use the BTC/ETH trading pair.
The price at which these exchanges occur is, to put it simply, determined by supply and demand. This means, that on days when more people are buying a cryptoasset than selling it… the price goes up; when more people are selling than buying… the price goes down.
Every moment of every day, there are hundreds of thousands of people looking to both buy, and sell cryptocurrency. A sale happens when two people want to buy and sell at the same time. To determine the price of this sale, an average price between what people are willing to sell cryptocurrency for, and what people are willing to pay for it, is calculated in real-time, each moment, by cryptocurrency exchanges. This average price is known as the “market price.” When you buy cryptocurrency on an exchange, you pay the current market price, which is calculated from moment-to-moment.
It is also important to note: when buying cryptocurrency, you do not need to buy a whole ‘coin’. Most cryptocurrencies (all of the ones that we are aware of) are divisible down to at least 8 decimal points. This means, that you can buy as just a few dollars’ worth of a cryptoasset, even if a whole unit of the cryptoasset is worth $100,000.
With those notes out of the way, now it’s time to learn how to actually buy some alt-coins!
If you already own some Bitcoin or Ethereum, you are ready for this tutorial. If you don’t already own some Bitcoin or Ethereum, but you would like to own an alt-coin, you will first need to own Bitcoin or Ethereum to make this purchase. To learn how to do this, check out our tutorial on how to buy Bitcoin and Ethereum on Coinbase.
Because you first need to be registered for the proper exchange to buy alt-coins, this tutorial is broken down into two parts; part one is how to get set-up on an exchange called “Binance”. This is where most of the popular alt-coins can be purchased; and part two is how to actually do the buying.
Step 1: Register for Binance
Binance is the most popular and most user-friendly alt-coin exchange, and the one we recommend. This link will take you to a sign-up page:
This link is our referral link, which means; if you sign up using it, we will receive a small commission on the trades you make. We would really appreciate it if you use that link! If you would rather not, we understand, and you can simply visit www.binance.com and follow the same steps.
After following either link, you will end up on the homepage of Binance, where a lot of things are going on! Don’t be intimidated, we are here to help! The first thing to do, is look for the word “register” in the upper right-hand corner, then click it as shown in the red circle below.
Once you click “register”, you will come to a page requesting some information. Here, you can input your email and create a password. Make sure you choose a strong password; this password will protect your funds.
After clicking the register button, Binance wants to make sure you are, in fact, a real person and not a robot. To do this, you must complete their unique captcha puzzle by dragging the slider below the puzzle piece, across the screen until the puzzle piece fits into the hole of the puzzle above. The area circled in red is where you click (it will start on the left side of the slider).
Step 2: Verify your Email
As is standard practice, Binance will have you verify your email after registering for an account.
To do this, check your email and then click the yellow button within the body of the email that says, “verify email”. If that doesn’t work, you can copy the long URL, and paste it into your browser.
Once you have followed that link, your account will be activated and you will be ready for part two of the tutorial!
So, you finally got your Binance account all set up and you’re ready to buy some alt-coins, wooo-hooo!
This is where things get scary; alt-coins are even more volatile than bitcoin, so there is a large chance the value of your cryptoassets will go down or up significantly, within moments of buying them, so only buy if you are ready for the ride. In other words, we suggest that you use discretion, especially in the beginning.
At Blockteq, we never give financial advice, so we really can’t say whether or not you should purchase cryptocurrency, however, if you’ve made it this far, you’ve probably already made up your mind. We are here to help you navigate the system.
If you haven’t yet decided whether or not buying a more alternative cryptoasset is for you, we encourage you to check out our in-depth guide on Bitcoin, Blockchains, and Cryptoassets. This will explain some of the history, philosophy, and the mechanics of these technologies, so that you can make an informed decision on whether or not owning a cryptoasset is for you. When choosing to buy an alternative cryptoasset, you are much more likely to fall victim to a scam, so make sure you are making an informed decision on what you are buying, rather than just taking someone else’s word for it.
One final warning:
Because there is no central company or authority that processes cryptocurrency transactions, if you make a mistake and send cryptocurrency to the wrong place, you cannot just call Binance and ask them to reverse the transaction. If you make a mistake, it is more than likely that you will never get your crypto back.
Due to this risk, we recommend, that if you do decide that you would like to own some crypto, start small and NEVER invest more than you can afford to lose! Wait until you feel comfortable with all of the wallets and interfaces before you start experimenting with large amounts.
With that important disclaimer out of the way; on to the tutorial.
Step 1: Send Bitcoin to Binance
For this part of the tutorial, we will be using the Bitcoin we purchased from Coinbase in our original tutorial. If your Bitcoins are safely stored off of Coinbase, that works too! All of the steps will be the same, with the exception of this first one. If you have gotten your funds off of Coinbase, then you probably know how to send Bitcoins by now, and you can send your bitcoin to Binance and skip to step two.
If your Bitcoin is on Coinbase, and you purchased it at least 29 days ago, you can go to www.coinbase.com and log in. Once you are logged into Coinbase, look for the tab that says, “accounts” (circled in red below) on your dashboard, then click it.
After clicking “accounts”, you will arrive at a screen displaying all the balances of the various cryptoassets you have stored on Coinbase. We will come back to this page.
Next, open up another tab on your browser, go to www.binance.com and log in. If it is your first-time logging into Binance, you will need to read a list of warnings and check the boxes next to these warnings, indicating that you have read them. These warnings are there for a good reason; we recommend that you read them and take them to heart. Once you check all the boxes, a box that says “I understand”, the continue button will turn yellow; click it to proceed.
Next, Binance will prompt you to set up a two-factor authentication. Two-factor authentication, often abbreviated as 2FA, is a strongly recommended second layer of security for your account. 2FA ensures, that even if someone were to gain access to your Binance username and password, they could not log into your account without your cellphone. We recommend using Google Authenticator for the highest level of security. For help setting up two-factor authentication, check out our tutorial on it here.
After you set up the 2FA, you will find the word, “funds” in the top bar on Binance; hover your cursor over it, and a dropdown menu will appear. In this dropdown menu, find “deposits” (circled in red below) and click on it.
Once you are on the deposits screen, type “bitcoin” into the search bar and select “bitcoin/BTC”. Make sure you select “bitcoin/BTC” here and not bitcoin cash/BCC, bitcoin diamond/BCD, bitcoin gold/BTG or some other variation; as selecting something other than bitcoin could result in a loss of your funds.
After selecting “bitcoin” you will arrive at a screen with your bitcoin wallet address. This is like a unique email address created for sending bitcoin to your Binance account. In order to send money from Coinbase to Binance, we will copy this address and paste it in the “send” section of Coinbase.
To start this process, you can click the box that says, “copy address” and this will copy your bitcoin address to your computer’s clipboard. After the address is copied, you can return to Coinbase but don’t close your Binance tab.
On the “accounts” section of Coinbase, look for “bitcoin wallet” and then click the word, “send” with a picture of a paper plane next to it, as depicted below:
After clicking “send” a pop-up will come up where you can enter the details of the transaction. In the first box labeled “recipient address” you can right click and select “paste” to paste your bitcoin address you just copied from Binance. After copying it, double check and make sure it is the same address that is in bold under the words “BTC deposit address” on Binance. If the addresses are not the same, your BTC will not make it to Binance and will be lost forever.
Once you have double checked that the addresses are the same, you can enter either the dollar amount of Bitcoin you would like to send to Binance or the bitcoin amount. If you try to enter the full amount of Bitcoin you own, Coinbase will tell you if you have insufficient funds. This is because Bitcoin transactions require a small transaction fee known as a “miner fee” which ranges between 10 cents and a dollar usually. We have $9.77 worth of bitcoin and are able to send $9.65 of it to Binance right now which means the miner fee is 12 cents right now. To find the maximum amount that you can send, just try lowering the send amount one penny at a time until you stop getting the “insufficient funds” message.
After you have entered the BTC address on your Binance account and the amount of BTC you want to send you can click “continue”.
After clicking continue, you can enter your two-factor authenticator code which will either be texted to you or can be found on your authenticator app and click “confirm” to send your funds. Once your BTC is sent, you can log out of Coinbase.
After sending, your bitcoin will take anywhere from 15min to 2 hours to arrive in your Binance account so go make some coffee, do something else, and don’t worry if you don’t see the BTC show up in Binance right away. Binance will send you an email when your BTC arrives.
Step 2: Trade Your BTC for an Alt-Coin
Once you receive an email from Binance saying that your BTC deposit was successful you will be able to see by moving your mouse over “funds” in the top bar and then clicking “balances”.
Your biggest balance will always be at the top of this list. Right now, this will be bitcoin.
If your “BTC Value” is greater than zero, you can exchange your BTC for another cryptoasset of your choosing. For this example, we will be buying Monero/XMR, but the steps will be the same for whichever cryptoasset you choose to buy.
To begin your trade, look for the word, “exchange” in the upper left-hand corner of the screen, hover your mouse over it, and select, “basic”.
After clicking “basic” you will arrive at Binance’s “basic” exchange. Your first sensation will quite possibly be sensory overload and your first thought may be “this doesn’t seem basic at all!” Don’t panic, just take a deep breath… and we will walk you through the process.
The first step is to type the ticker of the cryptoasset you are buying in the search bar on the right-hand side of the screen.
Because we are buying Monero, we will type XMR here and the XMR/BTC trading pair will be the only search result. To pull Binance’s live XMR/BTC market, just click on the search result.
After clicking on the trading pair XMR/BTC, the chart and “order book” for XMR will come up. Note: all of the prices on this screen are in terms of bitcoin; not dollars.
The order book, which can be found on the left-hand side of the screen, is a running list of all of the “asks” and “bids”. Asks are on top, listed in red, and represent people interested in selling, accompanied by a price at which they are willing to sell. Bids are on the bottom, listed in green, and represent people interested in buying. The price in between “asks and sells” is the price at which the most recent sale took place, it is called the “market price”.
The chart found in the middle of the screen, is a price history, over time. If you want to learn more about how to read this chart, Google “technical analysis”
In order to buy a cryptoasset for the current market price, look for the word, “market” under the price, and click it (circled in red below). For trades worth more than 250 dollars, a “limit order” is better; just to make sure you don’t accidentally pay too much for your cryptoasset. When using a “limit order”, type the maximum price you are willing to pay for a cryptoasset and wait until the order fills.
Because we are just buying a small amount today, we will use the market order. To trade all of the available bitcoin in your account for the cryptoasset you are buying, you can click, “100%” and the maximum amount that can be purchased will automatically be filled into the “amount” box. You can also use the 25%, 50%, and 75% buttons to trade the amount of bitcoin of your choosing for the cryptoasset you would like. You can also type the specific amount of the cryptoasset you want in the “amount” box.
For our purposes today, we will use 100% of our BTC, as demonstrated below. Immediately after clicking 100%, we will click the big green button that says, “Buy XMR” to complete the buy.
Directly after pressing Buy XMR, the Monero is in our Binance wallet, and the Bitcoin is gone.
If you have been following along, you now own the cryptoasset you were looking to buy! Congratulations!
Make sure to check out our other “how-to” pieces on how to safely store your newly purchased cryptoassets.