Buying small amounts of crypto: Where can you do a pocket money DCA? - #CryptoTrading

Published in Reports · Labeled as Onramp ·

Where to buy small amounts of crypto without getting ripped off on fees?

Want to buy crypto but don’t have a whole bunch of savings to spend at once? No need to resort to Bitcoin ATMs in 2020.

Bitcoin is over ten years old now, but there are still plenty new people buying their first ever crypto.

Some of you are very young, others want to DCA by small amount of money, still others just don’t like to wait for monthly DCA and want to stack sats more often.

Where to buy small amounts of crypto

Bitcoin ATMs

the easiest way, also the most expensive

Asking around on social media, you will find that surprisingly many people use Bitcoin ATMs for their small crypto purchases.

There is nothing wrong with that, except the outrageous fees. Bitcoin ATMs charge anything between 5-10% transaction fee.

If you just want to make a tiny purchase with some cash you know you would otherwise spend on something stupid, it is better to use the ATM.

If you are planning to DCA, even if by a really tiny monthly amount, consider learning to use a crypto exchange or a p2p marketplace for cryptos.

Even if you only literally have pocket money to spend on crypto, over time the stack will add up - and so will your transaction fees.

P2P Marketplaces

easy enough on a good marketplace

Peer-to-peer marketplaces for crypto do not have a good image among crypto newbies. That’s because for some reason crypto nerds like to recommend places like Bisq, which is a p2p marketplaces with convoluted user interface that is way too hard to understand.

For years, the go-to place for small crypto purchases was a marketplace called LocalBitcoins. It was a simple forum where you could arrange a cash transaction with someone from your city. Alternatively you could use a local bank wire or wallets like PayPal.

In 2020, the place is no longer trustworthy. LocalBitcoins require site-wide identity verification and there have been reports of them irretrievably freezing user funds.

The reason for this is all the trouble the platform has been getting from regulators. And the reason for is that even on the backend, LocalBitcoins are a in fact simple forum. You have zero privacy while on there, the website has access to all your information.

LocalCryptos have the most private and secure setup

A new p2p marketplace emerged with the boom of Ethereum, that eventually took over the demand from failing LocalBitcoins and served it better.

The p2p marketplace is called LocalCryptos. Currently it has the most advanced setup on the backend, while it manages to keep things pretty simple on the front end.

  • LocalCryptos are a dApp (decentralized app) that runs an escrow service directly on blockchain.
  • The escrow is done via a smart contract, but the smart contract is so simple that it works even on Bitcoin blockchain. (BTC and LTC blockchains do support “scripts”, but really just very simple ones.)
  • If you are using one of the popular crypto wallets like MetaMask, you can sign up directly via the wallet.

LocalCryptos lets you buy crypto for cash, online wallet money or bank wire, just like it used to be on LocalBitcoins. The key difference from LocalBitcoins however is that LocalCryptos is a non-custodial marketplace.

  • The marketplace doesn’t have access to the private messages you exchange with vendors (where you may be sending a scan of your ID or your bank data). All this communication is encrypted between you and the vendor.
  • You are in full control over your crypto for the whole time. At LocalCryptos, you either sign up directly with your wallet, or you get the seed phrase of the wallet generated by the marketplace.

So, you are the sole owner of the crypto directly from the moment it is released from the escrow. The escrow is a blockchain script. All your communication with your vendor is encrypted.

This means the marketplace, in case of LocalCryptos, is not a party in your transaction. the marketplace doesn’t even know anything about it, apart from the cryptocurrency transaction data that is available publicly on blockchain anyway.

With this kind of solid setup, even if an authority requests information from the marketplace, there is no information to be shared.

LocalCryptos charges a fee and its vendors charge a markup compared to crypto exchanges, but you can get crypto for the total markup as little as 1.5%.

If you are planning to DCA regularly, consider LocalCryptos. The common practice is to find a reliable vendor and after a few months, move with your DCA off-platform. That will save you the platform fee and get you your crypto DCA for even cheaper.

Regular, Custodial Crypto Exchanges

most cost effective but minimum order sizes apply

Your last option are regular crypto exchanges.

There are OG hodlers who are still worried they will lose money in a Gox 2.0. Well, it does still happen. The remedy is easy though: Get a crypto wallet (and keep it updated).

To buy crypto on a regular exchange you will need a bank account, so this is out of the question if you are too young or just don’t have any for whatever reason.

If you have one, just sign up at a reputable exchange that has a bank account in your currency.

The minimum order size is almost always 10 USD / 10 EUR / 10 GBP.

Trusted Crypto exchanges with EUR bank accounts

  • Kraken
  • Bitstamp

Trusted Crypto exchanges with USD bank accounts

  • Kraken
  • Gemini
  • Coinbase PRO

Trusted Crypto exchanges with AUD bank accounts

Do not forget to withdraw your crypto after you buy it though.

All these exchanges listed here are trusted, but they are custodial: You do not own the private keys from your crypto there.

For the 2020 overview of crypto wallets, head here.

Summary

  • Buying small amount of crypto on a non-custodial marketplace is easy enough.
  • At the same time non-custodial marketplaces will give you the best privacy as well as security, as they force you to use your own cryptocurrency wallet.
  • The minimum purchase amount on custodial exchanges is 10 USD. You should not leave that money in the exchange wallet since on a custodial exchange you don’t control it.

Category: Reports · Label: Onramp · Author: Altcointrading (contact author)

 

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