How To Buy Altcoins in the UK
Alright, so you want to buy some Altcoins (any other coin except for Bitcoin). First things first, a quick crash course on buying crypto in general.
Cryptocurrencies are bought through exchanges. Exchanges are platforms you need to sign up for (like forums/apps or any other website with user accounts). Once you’ve signed up, you can log in, deposit credits/money (preferably GBP) into your account. And then you can use that money to buy cryptocurrencies on the platform/exchange. To learn more about UK exchanges, check out our list of the top cryptocurrency trading platforms in the UK.
Buying Altcoins in the UK has become pretty easy since CEX.io came onto the crypto scene. Just sign up, verify your account, and buy XRP with GBP.
We’ve laid out the steps on how to get started below!
How To Buy Altcoins in the UK
- Register for an account with CEX.io.
- Verify your account.
- Deposit GBP into your account
- Click the “Buy/Sell” link
- Select any Cryptocurrency and “GBP”.
- Enter the amount of GBP you want to trade for the Cryptocurrency, or how much of the Cryptocurrency you want to buy.
- Review the details.
- Click “Buy”
How To Get Started
Setup Your Account
CEX.io is definitely our go-to crypto trading platform in the UK. They offer a great range of cryptocurrencies and they are UK based so it's easy to sign up and use GBP to trade.
The first thing you'll need to do is sign up for an account from their homepage.
Verify Your Account
After you've created your account, to unlock higher limits you'll need to verify your account. You can do this by clicking on your name top right then clicking on "Verification", this will take you to a separate subdomain where you can verify your details. You will have to fill out all of your personal information including any documents required, don't worry about this, every exchange requires it. Cryptocurrency exchanges need to request this information to abide by local laws.
Fund Your Account
You can now deposit money in your account, there are a few different options which you can see below. If you have any issues you can always reach out to their support team.
Once you’ve funded your account with GBP, you’re set to buy some crypto.
CEX.io caters for all users, so they have both simple and advanced ways of buying cryptocurrency. Essentially you can just choose which Cryptocurrency you want to buy and which local currency you want to use, in this case GBP.
Where To Buy Altcoins
We reviewed all of the exchanges available in the UK and we highly suggest using CEX. It far surpasses the other exchanges as the best option due to it's customized platform and ease of use.
CEX is by far our favourite exchange for people in the UK. Their platform is incredibly easy to use and allows you to buy Cryptocurrencies with GBP. They have their HQ in the UK so it allows from some great benefits like faster payments and localised support.
What Are Altcoins?
Although crypto awareness is on the rise around the world, many people are only familiar with Bitcoin and believe that’s all we mean by “digital currencies”. However, since 2009 when the first digital coin was launched, thousands of cryptocurrencies have made their market debut.
These alternatives to Bitcoin go under the umbrella term of “altcoins”. Some of them have a lot in common with Bitcoin, others differ in many things. Some of them only function as stores of value and longterm investments, others fuel all sorts of blockchain-based software.
When it comes to creating a new cryptocurrency, they’re all built using blockchain technology, the underlying technology behind Bitcoin. Most of the developers perform a soft or a hard fork on Bitcoin’s code and either create a similar blockchain with minor changes or a completely separate digital ledger altogether.
Why Do We Need Altcoins?
New cryptocurrencies are almost being launched by the hour! If you check reliable crypto sites like CoinMarketCap, you’ll see that there are more than 5,300 cryptocurrencies available online to traders right now.
If you’re wondering why we need so many altcoins, instead of just using the first and most popular one, i.e. Bitcoin, you’re probably not alone. In the beginning, before it gained mainstream usage, Bitcoin could process the incoming transactions with ease. Nowadays, the influx of transactions is larger than the blockchain’s processing power of only 7 transactions per second.
Not only that but the founder of Bitcoin and its protocol, Satoshi Nakamoto, set the mining time at 10 minutes per block. Since most merchants ask for at least 4 confirmations before accepting your transaction, you’ll have to wait for almost an hour before your order’s ready.
You would think that Bitcoin’s popularity would motivate more users to volunteer as miners and, in turn, verify the transactions faster. However, Bitcoin’s proof of work mechanism is such that the mining difficulty increases over time. As a result, miners are required to use very expensive mining gear such as ASICs that produce the right amount of power.
To avoid inflation scenarios, Satoshi hard-capped Bitcoin’s supply at 21 million coins and decided for the mining reward to get halved every four years.
Such shortcomings have motivated other software developers to work on improving Bitcoin’s limitations by creating their own coins and blockchains. The main difference between Bitcoin and these other coins include transaction speed, mining mechanism, hash rate, distribution, etc.
Contrary to popular belief, altcoins can be strong competitors to Bitcoin. Even though a lot of them are shortlived and fail to meet the developers’ expectations or the project itself gets halted due to lack of funding, a number of altcoins have proved to be real game-changers for the crypto industry.
Take Litecoin, for example. The idea of its founder Charlie Lee was to create a digital coin that would be used for smaller transactions and everyday purchases as opposed to Bitcoin which is primarily seen as a profitable longterm investment. That’s how Litecoin got the name “Bitcoin’s silver”, based on how gold and silver were used in the past.
Moreover, Litecoin uses script algorithm instead of SHA-256, Bitcoin’s hash function, which empowers the blockchain to process up to 56 transactions per second. Not only that but the supply limit for Litecoin is four times larger, i.e. 84 million LTC in total.
Then we have Ether, the second most popular cryptocurrency on the market and the second-largest in terms of market capitalization (over 15 billion GBP) and monetary value (currently 135.87 GBP). The brains behind Ethereum, the Russian-Canadian developer Vitalik Buterin, managed to find ways to this coin for more than just decentralized online payments.
On the platform, users can create smart contracts and decentralized applications using Ether for service costs. They can also build new digital coins on top of Ethereum’s blockchain. Similarly, the Chinese blockchain-based platform and cryptocurrency NEO allows its users to digitalize physical assets, create a digital identity, and then sign smart contracts with their business partners without the need for intermediaries.
Pros and Cons
If you decide to invest in an altcoin, beware of the “pump and dump” scheme. This is a very common trick planned out by experts in crypto trading who take advantage of beginners. They look for a new cryptocurrency, one whose market capitalization is still very low and the price extremely volatile.
The first thing these seasoned investors, known as “whales” (wealthy traders), do is they buy a lot of coins from this altcoin and start manipulating its price. They start promoting this coin to attract new traders and trick them into thinking they’ll get rich the minute they invest as well. Once they increase the buying power of the coin, the price automatically goes up due to the initially low trading volume.
This price inflation is exactly what the whales have been waiting for to sell the coins they’ve purchased and make a profit. This is the pump and dumb moment. Once the traders dump the price of the altcoin, the newbies will lose a lot of money. The unregulated nature of the crypto market makes it impossible to take action against such tricksters.
On the other hand, if you don’t rush to invest in an altcoin just because someone hyped you that its price is climbing up but decide to make such a step based on thorough research and market analysis, then you have nothing to worry about.
Think about the first investors who were brave enough to invest in Bitcoin back in 2009. Right now, anyone who had bought at least 10 BTC and held onto them, could sell them for 56,380 GBP!
More than just a lucrative investment, altcoins can be the driving force behind many blockchain-based projects in the future. They can help us turn the world economy into a smart economy, one that is transparent and decentralized.
Disclaimer: Digital currencies and cryptocurrencies are volatile and can involve a lot of risk. Their prices and performance is very unpredictable and past performance is no guarantee of future performance. Consult a financial advisor or obtain your own advice independent of this site before relying and acting on the information provided.