Assuming you have been using a crypto app or exchange for a while, it should come as no surprise that the cryptocurrency world is vast. It streteches beyond the dominating cryptos, Bitcoin and Ethereum, and provides an array of other digital currencies. One particular coin that is attracting a lot of attention is Monero. Today we delve into this interesting privacy coin and learn exactly how to buy Monero (XMR).
This article is for educational purposes only. Always do your own research and seek the help of a trusted advisor when navigating crypto markets.
Often going by its abbreviation of XMR, Monero is currently one of the top 20 cryptocurrencies in the world. At the time of this writing, it has a total market capitalization of $2.2 billion.
The amount of attention that Monero has gained in recent years is thanks to its role as a Bitcoin alternative. Specifically, on the dark web. Following its astounding success, many people are now wanting to get in on the action and buy it. But how does one do that? What is the process behind this investment?
What is Monero?
Monero is an open source cryptocurrency that puts all of its focus primarily on privacy fungibility. In addition, it offers high-level anonymity for its users and their transactions. These features are something that they pride themselves on and are recognized for in comparison to other cryptocurrencies.
The Monero network functions on a peer-to-peer system, not unlike Bitcoin. However, there is one key difference that sets it apart from Bitcoin. That divergence being that it performs as private digital cash while providing protection from any form of data tainting. And this is done so through the participation of past transactions.
The configuration of Monero’s blockchain is done in a way that makes it opaque. It applies anonymity to transaction details by way of concealing the addresses that participants use. Such details include the identity of senders and recipients, and the amount of every transaction.
It follows three core values: 1) Security, 2) Privacy, and 3) Decentralization. On its website, Monero boasts the following about its electronic cash:
“…safe from ‘capital controls’ – these are measures that restrict the flow of traditional currencies, sometimes to an extreme degree, in countries experiencing economic instability.”
Where can you purchase it?
In spite of Monero’s innovative privacy features, you can buy and sell the coin in a similar manner to purchasing other cryptocurrencies. Overall, there are two ways in which you can purchase cryptocurrencies. One way is through a broker and the other is through a third-party exchange.
Probably the easiest way you can buy Monero – or any cryptocurrency for that matter – is to open a brokerage account. Specifically, open an account with a brokerage that offers the coin you wish to buy. These brokerages will allow you to link your bank account information and import money into your brokerage account. From there, you will be able to purchase the coins you want. At this point, you may want to transfer your coins to a separate wallet for the utmost safety.
Now, depending on where you live, there’s a chance that you will need to use a 3rd-party exchange. In this particular case, you need to open an account with a brokerage that provides a medium currency. By far the most common cryptocurrency medium is Bitcoin, however you can also use Ethereum or Litecoin. Purchase your medium currency and then transfer it to an exchange of you choice, such as Kraken or Binance. Then, convert your currency to Monero before sending your Monero straight to your wallet.
Steps on how to buy it
Okay, so now you know what Monero is and where you can buy it. With all of this in mind, we can finally get into how you can purchase it in greater detail.
#1 – Compare brokerages
The easiest way to buy Monero is by making an account with a brokerage that allows fiat to Monero conversions. When you compare brokers, look for these key features:
- Security: Seek out a broker that provides state-of-the-art security features, such as 2-factor authentication and double-layer encryption.
- Coin offerings: Make sure that your brokerage supports Monero and any other cryptocurrency you want to buy.
- Simple access and usage: Choose a broker that provides a platform that you fully understand and is easy for you to use.
- Availability in your area: Before you create a brokerage account, you need to make sure that the company offers service where you live.
- Trading via mobile: Is a mobile app a vital feature for you? If so, then you should confirm that your broker offers a compatible app with your phone’s operating system.
- Low fees and commissions: Make sure you have a proper understanding of your broker’s fee schedule before you create an account. Moreover, select a platform that offers adequate fees for your trading frequency.
- Multiple options for purchase: Do you want to buy Monero with a credit card? Do you need to be able to import and store fiat currency in your cryptocurrency brokerage account? The truth of the matter is not every broker provides these functions. You should check with your individual broker in order to learn which methods they grant.
#2 – Make a brokerage account
As soon as you choose a cryptocurrency broker that’s suitable for you, only then can you create an account. The process you will use to open an account will vary depending on the broker. However, you must be ready to upload some of your personal information to complete your account setup. A majority of cryptocurrency brokers need to collect the following information before they can allow you to begin trading:
- Email address
- Full legal name
- Phone number
- A scan of a valid photo ID
The entire verification process will likely take a few days to finalize. It ultimately depends on which broker you decide to go with. Afterwards, there will be one of two outcomes. Sometimes, you can start trading instantly following the creation of your account. Other times, your account may have a hold on it up until the broker is able to validate your identity. You will typically receive an email or text notification as soon as the verification reaches completion.
In the end, you will just have to wait until the broker verifies your account. Only then can you enable 2-factor authentication in order to keep yourself secure.
#3 – Link your method of payment
At this point you will need to link your payment strategy through your brokerage account. Depending on the broker you choose, you could potentially buy cryptocurrency with various means. It could be a bank account, a credit card, or even a wire transfer. It is important to note that a lot of brokers will charge an extra fee for payments with credit card.
#4 – Purchase
After linking your payment method, you are finally at the point where you can start buying Monero. It would be wise for you to hold off doing so for a few days, though. This way, you can see how the price of the coin fluctuates prior to your investment. Put your trading strategy to use and keep an eye out for buy signals for a few hours or days.
When you think that Monero’s price is low, you can put in an order with your broker. Utilize your broker’s platform as a way to place an order. From there, your broker will proceed to fill it on your behalf as soon as they can. Remember that the liquidity of cryptocurrency markets frequently varies. Basically, before you can actually purchase Monero, someone else on the market has to be selling it. There’s no telling how long it will take to fill out your order. It could be anywhere from a few seconds to a few hours. You are able to keep track of your order’s status via your brokerage account.
#5 – Put it into storage
Generally speaking, it is not a smart idea to store your cryptocurrency in your brokerage or exchange account. That is, unless you are a frequent trader and choose convenience over a higher level of security. If you aren’t trading regularly, then are able to go a different route, such as downloading a virtual wallet. You can either put your Monero into storage using the virtual (“hot”) wallet, or you can use an offline hard wallet for maximum security. From here, you must link your crypto portfolio tracker to your wallet and regularly chart your Monero’s value.
The most secure way to store Monero is undoubtedly on a hardware wallet. Nowadays, Ledger wallets are the only ones that support Monero. When you use a hardware wallet, you will get the security of storing your own private key; in other words, your “password” offline. At the same time, you will be able to send XMR through a desktop interface when you need to. The one downside to this is the fact that hardware wallets cost money.
Is it a good time to be buying Monero?
It is important to remember that cryptocurrency, while growing in popularity, is still a developing market. This means that there is plenty of room leftover to potentially generate a profit with coins such as Monero. However, it is as volatile as it is enticing.
If you choose to invest in cryptocurrency, you need to have a game plan. Above all else, remember to never invest more than you can afford to lose.