There are several ways to acquire cryptocurrency without a bank account. Cryptocurrency is a non-physical coin, which means that to hold cryptocurrency, you just need a digital wallet. This is a lot like a bank account, with the major exception that it is not a centralized financial institution.
For instance, CoinSmart, a crypto exchange in Canada, allows users to create instant invoices so that they can be paid in cryptocurrency. Another option is to use a credit card to buy cryptocurrency from an exchange.
Digital Wallets and Hardware Wallets
When you go to buy cryptocurrency, you can use your wallet to transact peer-to-peer. When you get paid in cryptocurrency, it works a lot like receiving an email. You give someone your email address, but you do not give them your password.
The simplest way to acquire cryptocurrency is through an exchange. Once you decide on an exchange, you just need to set up a digital wallet. Many exchanges offer their own digital wallets. Other options are digital wallets such as MetaMask.
To add cryptocurrency to a digital wallet, you can use a bank account or you can use a credit card. If you already have cryptocurrency, then you can use it to buy a different cryptocurrency. Or you can start accepting crypto payments for services rendered with a digital wallet.
Digital wallets are a piece of software that functions as a browser add-on. This is typically completed with a simple download. Digital wallets are what you will use to connect to the network and buy or sell cryptocurrency.
You will also want to invest in a hardware wallet. This is referred to as cold storage or offline storage. This is a piece of physical hardware where you store the information that accesses your cryptocurrency, such as your private keys for all of your cryptocurrencies.
Because cryptocurrency is a purely digital currency, the hardware wallet does not actually store your cryptocurrency. It just stores the keys to unlock and use your cryptocurrency. The actual coin is a string of encryption that lives on a blockchain network.
Centralized Exchange (CEX)
Most cryptocurrencies are bought and sold on exchanges rather than traded peer-to-peer. This is because exchanges act as a way to connect buyers and sellers.
Centralized or private exchanges work much like traditional stock exchanges. When you buy cryptocurrency on a centralized exchange, you are buying cryptocurrency from the exchange itself.
This means that the exchange sets the price at which each cryptocurrency is traded for. The exact prices of each cryptocurrency will vary from one exchange to the next. However, they will all be based on the overall market value.
Private exchanges are great because they are the easiest way to get started investing in cryptocurrency. On most exchanges, there are multiple ways to fund your account, including using a credit card. But you can also make wire transfers or e-transfers to many exchanges now. Nevertheless, you do not necessarily need a bank account to use a centralized exchange.
Because centralized exchanges operate as businesses, many comply with their local KYC and AML regulations. These vary from one jurisdiction to the next. With the increased popularity, cryptocurrency exchanges that operate as for-profit businesses must comply with client identification and anti-money laundering protocols.
Decentralized Exchange (DEX)
Another way to buy cryptocurrency is with decentralized exchanges. DEXs have fewer regulations because they are not private businesses. These exchanges facilitate peer-to-peer transactions and do not operate as businesses. The main function of a decentralized is to bring traders together. It is then up to the traders to set the conditions of the trade.
These transactions can also take place without a bank account. All you need is a digital wallet to participate. Each DEX is a little different, so you may be able to use the digital wallet that you have, or they may have one that the forum prefers.
Deciding on what kind of wallet to use requires research, as not all wallets hold all cryptocurrencies, nor do they function on all exchanges. However, it is usually just a matter of sharing your address to receive and trade funds.
Founder Dinis Guarda
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