Back to basics - The world of Crypto

Initially, it can be extremely daunting trying to figure out the first steps in your journey towards becoming a successful crypto trader or investor. Where and how should I purchase my first bit of crypto coin? Where is my cryptocurrency stored? What’s an “exchange” and which provide the most benefits or features that I’ll want when trading? What are the best practices for making sure my investments are safe and secure from malicious hackers? Rest assured, there are no stupid questions, and no question that hasn’t likely been answered before when it comes to some of these crypto-basics. Over the course of the next several blog posts, we will be explaining some of these basics and best practices so you can get to investing and trading in no time.

Before we take any steps into the world of investing or trading cryptocurrencies, you have to have a grasp on what a cryptocurrency actually is. By definition, a cryptocurrency is a peer to peer digital asset system, designed to work as an exchange medium using cryptography to secure transactions and verify the transfer of assets. Bitcoin achieves this through the use of “blockchain” technology. In 2009 Bitcoin was launched by a group or individual “Satoshi Nakamoto”, released as open-software, and became the first decentralized (as opposed to a centralized currency) cryptocurrency. The Bitcoin Foundation stresses that in the decentralized system, no one user has control over the currency; and that bitcoin is as virtual as the credit card and online banking systems that we already use everyday. Essentially, a payment asset that can be used across any country; secured and verified by advanced cryptography technology. Since the birth of cryptocurrency, several other popular alternatives have been created that are utilized and traded on exchanges. You may run across other popular coins such as Ethereum and Litecoin. Feel free to check the wiki pages on these “alt-coins”, as these are readily available at broker sites such as Coinbase. We will go into more detail regarding “altcoins” after we finish covering the basics of buying your first bitcoin.

One of the first and only requirements for investing/trading cryptocurrency is having some actual cryptocurrency at your disposal. Unless you are attempting to “mine” cryptocurrency (another topic for another time), you’ll have to purchase your first amount through a broker. There are multiple places to purchase your main cryptocoins from when you’re beginning. One of the most widely used is Coinbase.com, as they serve over 30 countries  (you can find a list here), and offer Bitcoin, Ethereum, and Litecoin for purchase. Coinbase, and other brokers, make their profits from charging a small transaction fee whenever you purchase a coin with fiat or send your cryptocurrency to another “wallet” (which will be discussed in a future post). If you’re not a citizen of those countries, or simply want to check out another bitcoin broker, we suggest locating a popular exchange through the website BuyBitcoinWorldwide. This website, although not a broker itself, is a wonderful search engine for finding what websites you can purchase cryptocurrency on, filtered by your country and purchase method preference. If you want something even more personable and discreet, there are even options to purchase btc with various gift cards, or even cash if you can find a local btc ATM in your area. A great resource for finding these types of independent sellers is Localbitcoins.com, where you can filter sellers by your location and purchase preference. There are even sellers willing to take alternative forms of payment such as gift cards (however these transactions are usually at a larger fee or high market price for btc).

Once you have purchased some cryptocurrency, it will be stored and saved on your online wallet, also known as a “hot wallet” (stored online). Your wallet is exactly that, a place where your cryptocurrency is stored, withdrawn, or deposited. If you’re interested mostly in just investing in the most popular coins available (BTC/ETH/LTC), keeping your funds on the corresponding brokers site’s wallet may be okay; however if you want to further secure your funds for long term investment you’ll want to look into a “cold wallet” (an offline hardware device used for securely storing your cryptocurrency, which we will go over later).

Although the first steps towards cryptocurrency investing and trading may be daunting, if you take it one informed step at a time, this could potentially be the easiest investment you’ll ever make for your future.

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