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

You might have followed the headlines, checked the prices, and decided you want to buy your first Bitcoin or Ethereum. Then you open an app or a website and see charts, order books, and unfamiliar terms. It can feel a bit much at first.

These days however, the act of buying crypto experience is similar to using online banking. You set up an account, verify your identity, add money, then place a trade. This guide walks through that process using CoinJar, and explains the main steps and risks in clear, practical terms.

Understanding the Marketplace

Before you buy anything, it helps to know where you are buying it. Most beginners start on a crypto platform, also called a spot market. CoinJar is an example of this.

A spot market is a financial market where assets are bought and sold for near‑immediate delivery. When you buy crypto on a spot market such as CoinJar, you are exchanging government‑issued money (known as fiat currency, for example EUR) for a specific cryptocurrency at the current market price.

You are not entering into a contract about the future price, and you are not using leverage. Spot trading is a direct purchase. Once the transaction settles, you own the crypto. You can hold it as an investment, spend it with supported merchants, or transfer it to a wallet that you control.

How it works in practice

On most platforms, buying cryptocurrency follows four basic steps: registration, verification, deposit, and trade.

1. Registration

First, download the CoinJar app. Then you can create an account. On CoinJar, this means providing a valid email address, setting a strong password, and agreeing to the terms.

Treat this like a financial account, because that is what it is. Choose a password that is unique, long, and not used on any other website. A password manager can help you create and store this securely.

2. Identity Verification (KYC)

Once you sign up, you usually cannot trade straight away. You need to complete Know Your Customer (KYC) checks.

KYC is a legal requirement for regulated service providers in Europe and other regions. It helps prevent fraud, money laundering, and terrorist financing, and it helps keep the platform safer for everyone.

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

• A government‑issued photo ID (for example, a passport or driving licence).
• A selfie or short video, so the provider can check the ID belongs to you and is not stolen.
• Your PPS number.

This can feel like an extra step, but it is a good sign. Platforms that follow strict identity checks are more likely to be operating in line with regulation and industry standards.

3. Depositing Funds

After your identity is verified, you can add money to your account. This can be done via bank transfer. Always check the fees and limits before you confirm a deposit.

4. Placing the Trade

Once your funds arrive, you can place a trade.

On CoinJar, you go to the Buy button (or the trade button at the bottom in the middle), select the cryptocurrency you want (for example, Bitcoin), then enter the amount of EUR you wish to spend.

Read this screen carefully. If you are comfortable with the details, confirm the trade. Your fiat balance will decrease and your crypto balance will increase.

Keeping Your Assets Safe

Owning cryptocurrency comes with responsibilities. Blockchain transactions are designed to be irreversible, which means mistakes or fraud are usually very hard to fix.

Taking security seriously from day one is essential. Treat your crypto account with at least the same care as your online banking.

Two-Factor Authentication (2FA)

You should enable two‑factor authentication (2FA) on your CoinJar account as soon as possible.

2FA adds a second step when you log in or make withdrawals. Alongside your password, you will enter a code from an authentication app on your phone, such as Google Authenticator or Authy. This means that if someone discovers your password, they still cannot access your account without your 2FA device.

Write down and store any backup codes in a safe place, offline if possible. These can help you regain access if you lose your phone.

Account Recovery

One benefit of using a centralised provider such as CoinJar is the option to recover access if you lose your login details.

If you hold crypto yourself in a self‑custody wallet and you lose your private keys or seed phrase, it is usually impossible to restore access. There is no central authority to reset your password, and your funds may be lost permanently.

With a custodial provider, your assets are held on your behalf. If you forget your password or lose access to your 2FA app, you can contact CoinJar Support and follow the official recovery process. You will normally need to repeat identity checks to prove that you are the account owner. This can take time, but it is designed to protect you and your funds.

Risks, Red Flags, and Security

Buying crypto through a regulated platform can be straightforward, but the wider crypto market contains real risks. Understanding them before you start is important.

Recovery Scams

Be extremely careful with anyone who claims they can “recover” stolen or lost crypto.

If you send funds to the wrong address, fall for a phishing scam, or your self‑custody wallet is compromised, there is no simple way to reverse a transaction. Blockchains generally do not allow chargebacks. Anyone offering to get your money back in exchange for an up‑front fee or “processing cost” is very likely to be running a scam.

Only use official support channels listed on the provider’s website or app. Never share your password, 2FA codes, or recovery phrases with anyone, including people who claim to be support agents.

Volatility

Cryptocurrencies are highly volatile assets. Prices can rise and fall by large percentages in a short period of time, and you could lose a significant part or even all of the money you invest.

Before you buy, consider:

• Only using money you can afford to lose.
• Setting a clear budget.
• Avoiding borrowing or using high‑interest credit to purchase crypto.

Past performance is not a reliable guide to future results. There is no guarantee that a cryptocurrency will increase in value, and some projects may fail completely.

Tax Implications

Crypto transactions are usually not tax‑free.

In many European countries, tax authorities treat cryptocurrency as an asset. You may create a taxable event when you:

• Sell crypto for fiat currency.
• Trade one crypto for another (for example, swapping Bitcoin for Litecoin).
• Spend crypto on goods or services.

You might need to declare capital gains or other income, depending on your personal situation and local law. It is important to keep detailed records of:

• Dates of each transaction.
• Amounts of crypto involved.
• Values in EUR at the time.
• Any fees paid.

Without proper records, it becomes harder to calculate gains or losses later.

These days, there is software you can use to automate crypto tax reporting. Koinly is an example, among many.

For specific tax questions, speak to a qualified tax adviser in your country.

Summary

Learning how to buy cryptocurrency is mainly about following a clear set of steps and understanding the risks involved. With a regulated provider such as CoinJar, you create an account, verify your identity, deposit funds, then place a trade on the spot market.

Use strong security from the start, including a unique password and 2FA. Treat your crypto accounts as you would treat your online banking, and be cautious of anyone promising guaranteed returns or easy recovery of lost funds. Keep good records for tax purposes, and only invest amounts you can afford to lose.

If you take your time, avoid pressure, and use trusted platforms and support channels, buying your first cryptocurrency can be a careful and informed decision rather than a rushed one.