Technological advancements have set cryptocurrencies on the path to potentially change the future of money. Because of this, people around the world have begun investing in various altcoins in preparation for cryptocurrency’s predicted growth. One such altcoin is Monero (XMR), which promises unrivaled privacy and security due to its special codebase and protocol.
If you’re a total beginner to crypto—much less Monero—you may have the impression that purchasing this altcoin is quite a complicated process. The good news is that you don’t need a powerful computer or knowledge of programming to get started. All you have to do is sign up for an XMR wallet, learn the basics of how it works, and then go and purchase the altcoin from a trustworthy source.
To help you get started, here’s everything you need to know before buying Monero:
Getting a Wallet
The very first step to doing absolutely anything that involves cryptocurrency is to get a digital wallet, and the same goes for buying Monero. Luckily, a plethora of wallets are compatible with the coin, and picking one to use is mostly a matter of preference. Still, it’s a good idea to look at each option with a critical eye, as your choice of wallet can make or break your crypto experience.
Choosing a Secure Wallet
Generally, a reliable wallet should offer just as much privacy and anonymity to the user as Monero itself does. This means that none of your activities should ever be recorded by the wallet. At the same time, the wallet should never request any of your personal information at any time during the registration process. The lack of registration and logs will ensure that your real-world identity is unlikely to ever be discovered by unscrupulous entities online.
Learning How to Use a Wallet
Once you’ve chosen and signed up for an XMR wallet, you’ll be given a seed phrase and several keys instead of the usual username and password. Read on for a brief explanation of what these are and how they work:
Seed Phrases
A seed phrase is a special kind of password, so to speak, as a unique one is generated every time a new wallet is made. It’s also much longer than your typical password, as it’s often composed of 13 to 25 words.
Once generated, the seed phrase must be written down or saved somewhere secure, ideally on paper or a device with no online access. Then, the recorded seed phrase must be hidden somewhere that’s accessible only to the user or anyone that the user trusts.
Keys
Aside from the seed phrase, your wallet of choice will also provide you with three kinds of keys. One key is public, while the other two are private keys reserved exclusively for your use and are not meant to be shared. They are the following:
- Public Key: The public key or the address is used for receiving Monero from other people.
- View Key: As the name implies, the view key is used to view your coins in Monero’s official ledger.
- Send Key: The send key is used for sending Monero to another wallet. This key should only be used with the ledger and never shown to another person.
It is crucial to remember—or, at the very least, securely store—these details. Much like the seed phrase, these three keys are necessary for retrieving your wallet and gaining access to your Monero coins. It is highly recommended to have these keys written down on paper and kept in a safe place. That said, you’ll want to make sure that you don’t store your keys in a place you’ll forget about, either.
Concerns Regarding Keys and Wallet Security
On the face of it, providing your public key to other people might seem like a major security vulnerability, considering the privacy coin’s emphasis on privacy and untraceability. Fortunately, certain security protocols are built into the blockchains of Monero to render the key obscure and anonymous outside of each transaction. As long as you don’t share the private keys, your wallet should remain safe.
At this point, you’ll have met all the prerequisites for buying XMR. With your wallet, seed phrase, and keys, you can finally purchase your first few units of the altcoin.
Buying Monero
Purchasing Monero is straightforward enough, and can be done via the following methods:
Buying from Individual Sellers
Using your public key, you can search online for other people who are selling units of XMR. Then, all you have to do is trade some of your fiat currency for that person’s Monero, and you’re good to go.
While this method seems relatively simple, you will have to deal with a lot of back-and-forth communications to finalize the deal. Additionally, meeting a stranger in person may not always be safe, especially if it involves an exchange of money.
Buying from a Crypto-enabled ATM
With many financial institutions wanting to take advantage of the cryptocurrency trend, some physical ATMs are now equipped with the necessary features for carrying out cryptocurrency transactions. However, finding one of these ATMs is easier said than done, as they’re currently aren’t that many of them available for public use.
Buying from a Cryptocurrency Exchange
Because buying XMR from other people or from an ATM can be quite cumbersome, most people opt to purchase their Monero coins from online cryptocurrency markets called exchanges. Exchanges are virtual marketplaces where people can buy and sell their altcoins. It’s also here where users can trade their fiat currencies for XMR and other types of cryptocurrencies.
If you’ll be buying Monero from an exchange, check how much they charge in terms of transaction fees and conversion fees. You’ll also want to find out whether the exchange accepts debit or credit cards, and if they require a minimum initial deposit of fiat money for each purchase. Ideally, the platform should also protect users’ anonymity on listings and during transactions.
While stepping into the world of Monero may sound tedious at first, it’s a relatively hassle-free process, if you know what you’re doing. In fact, the whole process—from signing up for a wallet to buying the crypto—can be completed in a matter of minutes. With a better understanding of this altcoin and how it works, your first foray into XMR should be smooth sailing.