Buying CrytpoCurrency: A complete beginner’s guide
Bitcoin’s greatest risk is its success… Personally, I’d rather have bitcoin than a bond. — Ray Dalio
When one of the best hedge fund managers in the world is telling you that, you can’t afford to ignore it, for me Ray represents one of those few people in the financial world, whose thoughts have catalyzed the world economy.
Now coming to the point, even after my bittersweet article about crypto last time, I have got multiple requests to help people in buying crypto, so here I am again, with the most detailed and concise guide ever written on buying crypto in India.
Mobile number — (check), Email id — check,
KYC documents — (PAN & Aadhar), you can upload documents other than Aadhar theoretically but the process just screws up in reality. So use Aadhar.
Bank account — (with UPI id must), most of the Indian banks are not allowing crypto transactions, but UPI transactions are still not blocked by NPCI.
Fund — (minimum 1000) I personally suggest not put up more than 5% of your portfolio.
App — Download google authenticator, which you would need for passcode generation.
If you have a credit/debit card issued outside India, it can be an advantage. If not, nothing to worry about.
> For listed coins (like most popular bitcoin or dogecoin or other 1000+):
Step 1: Signup using the link above (Some of my referral links can help you save commission from 5–15% and incentives me more or less as well)
Step 2: Upload KYC, (Binance and Coinbase needs everything clear, they rejected multiple time before accepting, whereas WazirX and BuyUCoin are fine with photocopy type clarity and all of them need video verification)
Step 3: Adding funds, the most difficult part for Indians as of today,
You cannot add funds to Binance and Coinbase from Indian accounts or cards, but you can generate a wallet and get crypto’s in them, a wallet is needed for buying unlisted coins as well.
For WazirX, during my experiment, I could not add funds successfully from multiple accounts excluding ICICI bank, even their famed p2p didn’t work for me in 5 retries and at least 5 hours of wait time. But after a couple of days, the UPI id transaction worked via Mobikwik wallet.
BuyUcoin was one the smoothest (their UI is a bit slow). I could successfully add funds using the UPI fund transfer in the first attempt. After few minutes of adding my bank account. Also, their EZ mechanism to buy/sell works very well albeit the gap in buy-sell price is on the higher side.
> For unlisted coins (coins not yet launched but available for a transaction, like BONE or LEASH, etc):
Step 1: Get a coin base wallet address for the type of coin you wish to buy, every coin (bitcoin, doge, ETH) has a separate wallet address.
Step 2: Go to Uniswap and sync your wallet (this can be really frustrating) I tried 6 different wallets (basically all listed there) and only one of them worked properly, that too adding fund was a headache, the Indian card was rejected summarily by all gateways, finally exchanging crypto from a friend was the only option left.
Step 3: Exchange your list coin (like bitcoin / ETH) to some unlisted coin and after deducting the fee, the unlisted coins will be credited to your wallet. In my example, I used Ethereum for exchanging on uniswap.
What to buy?
This is difficult to tell, when I already told you that there are more than 7k+ coins available, the highest variety is available on Binance and then Coinbase. But for Indian exchange, WazirX has more volumes than BuyUcoin.
This is how I cracked this part:
Since the use case of crypto is still in the developing phase, it's very difficult to determine which coin would make you money tomorrow, but the most common pattern observed in the dramatic rise of coins (remember my millionaire friend) was the community.
Dogecoin's rise can single-handedly be attributed to ElonMusk, Bitcoin is the poster boy of crypto, the Adam’s of the world of crypto, so it was very important to stick to a stronger underlying community.
The other factor was the environmental effect, as we have already seen the negativity around the energy consumption of bitcoin, so I was looking for something which can easily possess both attributes.
I could have easily stuck to bitcoin and dogecoin, but then as I sometimes do in long-term investment (woof!), I chose to go with competing next.
Ethereum was the simplest choice for me since the work on proof-of-stake is on the cards, rather than the currently used energy-guzzling proof-of-work. I was also attracted to the ecosystem created by co-founder Vitalik Buterin and his vision of the crypto world.
The second coin, which was cheaper but popular, backed by a strong community and somehow liked by Vb himself, when he recently threw away 40% of the total supply to create balance in the community after his billion-dollar donation to the Indian covid relief fund, was SHIB.
I just split my small experimental sum of money with the majority going to SHIB and the minority to ETH.
I hope this article will help you make some progress in the crypto world. But before I end, I would like to bring some quotes from Ray Dalio again.
“One of the great things, I think, as a worry is the government having the capacity to control … bitcoin, or the digital currencies. They know where they are, and they know what’s going on.
“If it’s (bitcoin) successful, the government will try to kill it and they have a lot of power to succeed.”
I hope you make choices that help you minimize the regret in life.
Disclaimer: The steps highlighted were verified as on 25th May 2021, the Indian government regulation can change overnight and some of the steps might not work effectively. The links to the crypto exchange have my referral id’s attached, I will be incentivized if you use the link to open your account. Also, the coin mentioned here are only for educational purposes, please do your own research before investing money in them, it has the potential of losing complete investment.