How to Buy Cryptocurrency: A Step-by-Step Beginner’s Guide

You have watched the headlines, seen the price swings, and decided it is finally time to get off the sidelines. You are ready to buy your first Bitcoin or Ethereum, but candlestick charts and crypto slang can feel a bit overwhelming at first.

The good news is that buying cryptocurrency today is not a technical exercise for programmers. It is now as straightforward as setting up a mobile banking app.

This guide walks you through buying cryptocurrency using CoinJar as an example. We will cover how the market works, how to secure your account, and what to check before you tap the "buy" button.

Understanding the Marketplace

Before you place your first order, it helps to know where you are actually buying from. Most beginners start on what is called a Spot Market.

A spot market is a financial market where assets are bought and sold for prompt delivery. When you buy crypto on a spot market such as CoinJar, you are exchanging your government-issued money (fiat currency, like AUD) for a specific cryptocurrency at the current market price.

Unlike complex financial products where you are only speculating on price movements, spot trading involves direct ownership. Once the transaction settles, you own the digital asset. You can hold it, spend it, or move it to a private wallet.

How it works in practice

Buying cryptocurrency usually follows four simple steps: Registration, Verification, Deposit, and Trade. Download the CoinJar app to get started.

1. Registration

To begin, you need to create an account. On CoinJar, this means providing a valid email address and creating a strong, unique password.

Treat this account like online banking. Avoid using the same password you use elsewhere, and avoid anything that is easy to guess, such as birthdays or simple patterns.

2. Identity Verification (KYC)

Once you sign up, you cannot start trading straight away. First, you must complete a process called Know Your Customer (KYC). This is a legal requirement for legitimate exchanges and is used to verify who you are.

To verify your account, you will usually need to provide:

• A government-issued ID, such as an Australian passport or driver licence.
• A selfie or short video so the system can confirm the ID belongs to you.

It might feel like an extra step, but it is a good sign. It shows the platform is taking compliance seriously and helps reduce fraud, scams, and money laundering.

3. Depositing Funds

After your identity is verified, you can fund your account. On CoinJar, Australian customers can typically deposit AUD via bank transfer, PayID, or other supported local payment methods.

In some regions, you may also be able to use a credit or debit card for a faster purchase, although fees and limits may differ. Always check which deposit methods are available in your country, and review any fees before you proceed.

4. Placing the Trade

Once your account is funded, you are ready to buy. Go to the "Buy" button in the CoinJar app. Or you can use the “Trade” button down the bottom in the middle.

From there:

• Select the cryptocurrency you want to purchase, for example Bitcoin (BTC) or Ethereum (ETH).
• Enter how much AUD (or local currency) you want to spend, or how much crypto you want to receive.
• Review the quoted price, fees, and the final amount you will receive.

When you confirm the transaction, the exchange matches your buy order with a sell order on the spot market. Your cash balance decreases, and your crypto balance increases.

You now own that crypto, and it will appear in your CoinJar account. Press the “Portfolio” button to see your cryptocurrency.

Keeping Your Assets Safe

Owning cryptocurrency comes with added responsibility. Blockchain transactions are normally irreversible, and there is no "chargeback" button if you send money to the wrong place.

This makes good security practices essential.

Two-Factor Authentication (2FA)

You should turn on Two-Factor Authentication (2FA) on your CoinJar account as soon as possible. This adds a second layer of protection.

With 2FA enabled, anyone trying to log in needs both your password and a one-time code from an authentication app on your phone. Even if someone steals or guesses your password, they still cannot access your funds without that second factor.

Account Recovery

One key benefit of using a centralised exchange like CoinJar is that there are recovery options if you lose access to your account.

In a pure "self-custody" setup, where you are holding your own private keys on a hardware wallet or similar device, losing your seed phrase or password often means losing your funds permanently. There is usually no support desk that can restore access.

With CoinJar, there is a Centralised Recovery process. If you forget your password or lose your 2FA device, you can contact CoinJar Support and work through an identity verification process to regain access to your account.

You may need to provide updated identification and answer security questions. It can take some time, but your assets are not lost simply because you misplaced a code.

Risks, Red Flags, and Security

While using a reputable exchange is generally safe, the broader crypto world still contains risks. New investors should be aware of a few common issues.

Recovery Scams

Be extremely careful of any third party that claims they can "recover" stolen or lost crypto for a fee. If you send funds to a scammer, or if your wallet is compromised, no one can rewrite the blockchain to give your coins back.

Crypto transactions are final. So-called "recovery agents" who say they can reverse on-chain transfers are almost always running a second scam against people who have already been hurt once.

If you need help, use only the official support channels of the platform you are actually using, such as CoinJar’s verified website or app.

Volatility

Cryptocurrencies are highly volatile compared with most traditional assets. Prices can rise or fall by large percentages in a single day.

Because of this, many people follow a simple rule of thumb: only invest money you can afford to lose. Avoid using funds you need for rent, bills, or short-term expenses.

Tax Implications

In Australia and many other countries, crypto is generally not tax-free. The Australian Taxation Office (ATO) treats most cryptocurrencies as assets, similar to shares.

A Taxable Event can occur when you:

• Sell crypto for fiat currency, such as swapping Bitcoin back to AUD.
• Trade one crypto for another, for example exchanging Bitcoin for Litecoin.
• Spend crypto on goods or services, such as using Bitcoin to pay a bill.

You should keep clear records of your trades, including dates, amounts, values in AUD at the time, and any fees. This information is important for working out your cost base and any capital gains or losses.

Poor record-keeping can make tax time stressful, so it is best to stay organised from the start.

These days, you can use crypto tax software to automate this for you.

Summary

Buying cryptocurrency is a modern financial skill that most people can learn quickly. By using a reputable platform like CoinJar, completing identity verification, and turning on security features such as 2FA, you can enter the crypto market with more confidence.

Treat your digital assets with the same care you give your bank accounts. Keep good records for tax purposes, avoid investing more than you can afford to lose, and stay wary of any offer that sounds too good to be true.