Ooooh, first blog post. Fancy! Anyway, Hi, I’m Rachel and I’ve been typing this out in the comments on Facebook posts for too long. Time to make it official. This is the step-by-step quick start guide to getting started in cryptocurrency. The objective of this guide is to make the process as painless as possible, but I make no guarantees.
The thing is that cryptocurrency is a super exciting thing to be involved in. I haven’t been this addicted to anything since I discovered vodka. The volatility of the stuff is the very thing that makes it so exciting, but with the incredible highs comes some pretty intense lows as well. If you suffer from anxiety and depression, this may not be for you…but who am I to judge. I have both and I love feeling my feelings with this stuff.
So here’s the deal—I am basically nomadic and mostly live out of a 40L backpack these days. In the last year I have moved from Alaska to Mexico with my dog, then roadtripped through Canada and the PNW in my 1978 Toyota Dolphin and flew to Spain to catch a boat to Panama and now I’m hanging out with my parents for the holidays in Mississippi. Through all of this mess, I found sending and receiving and changing and moving and storing money to be a constant battle, and I began looking at crypto as a potentially convenient solution to my constant money moving/money changing issues. I was looking for a global electronic currency, and crypto is where it’s at, even though it’s in its infancy. It just so happened the rest of the world was beginning to look at it, too, and since I’ve gotten into the game it’s gone positively batshit.
That’s it. I’m not an expert. I’m like you, someone who’s had to wade through the mountains of bullshit to figure this stuff out and get my foot in the door. I just want to save you some of that trouble, I’m not here to advise you on your finances or tell you what you should or shouldn’t do with your money. I’m not a financial advisor. (Someone said I should say that. CYA and stuff.) I’m just a girl, standing in front of a bunch of internet strangers, asking them to love her…and read this so I don’t have to type it out again!
Ooh! One last disclaimer: There are affiliate links up in here, mainly because every website in crypto seems to offer one so…why the heck not. Some of them offer your perks as well, so get it. I don’t share any affiliate links for products I don’t personally use and recommend!
So let’s get into it already.
My go-to first step is to get people signed up on Coinbase. There are plenty of other ways to change fiat (government-backed real world currency) to cryptocurrency, but Coinbase has a very beginner-friendly interface and they are FDIC insured and backed by the SEC and I think that’s a great place to start people off. They are one of the larger players in the crypto game at this point and are totally on the up-and-up and actively positioning themselves to be a standard bearer in crypto exchanges. The changing of money from fiat to crypto is not always a smooth process for numerous reasons, primarily revolving around slow transactions and sometimes high fees. There are ways around the latter, but the former is hit or miss with the high traffic on crypto networks right now, and Coinbase still wins on ease of use, so for these reasons…it’s Step Number 1.
Sign yourself up using this invite and we both get $10 to buy some crazy alt coin or cover fees or whatever, but if you prefer not to use a referral link, go here instead.
Coinbase does work in many countries, but not all. Check here to see if you’re covered.
To use the site, open an account and then go to the “Buy” tab when you’re ready to jump in. You will be able to see the price of Bitcoin (or Litecoin or Ethereum) and whatever the price is when you hit the purchase button is the price you are getting your coin for, even if the transaction takes a while to process. You don’t need to transfer USD (or other fiat) directly into this account first to use it. It’s ok if the “Sell” feature isn’t available in your country…you don’t need it. You’re going to transfer it out to a wallet.
After you are more comfortable with things (or if you want to go directly to a more advanced step,) you can use other exchanges like Coinbase’s sister-site GDAX to buy crypto with fiat with no fees. I highly recommend doing an initial deposit through CB first though.
Ok, so that pretty much covers Step 1! Congratulations, you own your first cryptocurrency! You may not have access to it for up to ten days depending on transaction processing time, but you’ve got skin in the game nonetheless and while you wait for that to process, you can move to Step 2.
While you’re waiting for the Crypto Fairies to take your gross old dirty fiat money and turn it into sparkly bitcoins, you should get started on your wallet strategy.
Security is kind of a big deal in crypto and it’s pretty intimidating. One of the biggest positive aspects of cryptocurrency, it’s decentralized and unregulated nature which offers potentially ultimate autonomy and freedom with your funds, is also one of its biggest downsides. YOU ARE THE ONLY ONE RESPONSIBLE FOR YOUR DOLLA DOLLA BITCOINS, YA’LL.
After you exit the warm, safe space of Coinbase, it’s the Wild Wild West. There is no FDIC to back your shit up, there is no bank to call and complain when you lose your debit card or can’t remember your password. You’re your own bank and with great power comes great responsibility.
That being said, this doesn’t have to be that hard. Seriously, if I can navigate this…anyone can. I am the single most irresponsible person in the entire world and if I’m sitting here telling you that you, too, can keep your crypto at least as safe as your fiat, you’ll have no problem at all.
So, how do you do that? Wallets!
Before you get started with opening all these new wallets, though, this is your chance to step up security at a very basic level and open up an encrypted e-mail account for use with all of these wallets and exchanges. ProtonMail is free and easy to use. Make it your new best friend.
There are five different kinds of wallets and it can get pretty confusing, but it doesn’t have to be. You will ultimately end up with several wallets, and maybe more than one of the same kind. This is because each kind sort of has a specific use and place in the crypto ecosystem. You’ve got desktop wallets, online wallets, smart phone wallets, hardware wallets and paper wallets. I’m going to write more about all of these in greater detail later, but for today’s purposes, I’m just going to line some of them up for you according to what I use and like.
A hardware wallet is cold storage for your funds. It’s a USB-like device that totally removes access to your monies from the interwebs by taking your private keys offline. These are perfect for storing large sums that you want to keep for long term investment. Your bitcoins (or other) will always exist on the blockchain, but nobody can pinpoint them without the keys, and that’s what wallets are actually storing.
There are basically three major hardware wallets on the market right now. They are Trezor, Keep Key, and Ledger. My preference is Ledger’s Nano-S because it’s about $40 less than the other two and has more functionality for alt coins.
Online wallets aren’t really the best idea for serious storage from a security standpoint, but you’re going to wind up with some by default. These usually go with different platforms and vendors that you might be making transactions with—each one will create a little online wallet for you. It’s not usually something you sign up for on its own.
For example, Coinbase has online wallet functionality. It can be used for making transactions, and since it’s Coinbase it is insured and therefore somewhat secured, but you don’t open a Coinbase account just for the wallet because it’s a shit wallet.
A smartphone wallet utilizes your handheld device as storage, so if you lose your phone or it is stolen, your funds could be at risk just like if you lose your physical fiat wallet.
I use Mycelium as a smartphone bitcoin wallet. It’s solid. It integrates with Trezor and Ledger hardware wallets, and apparently you can use it to buy coin with fiat in USA and Canada through Glidera, but I haven’t tried that yet.
I also use Coinami which accepts a ton of altcoins and has a ton of great features including in-app exchange.
Like a said, you will wind up having a bunch of wallets. Most, aside from the hardware wallets for cold storage, are free so go wild and collect them all to see what works for you.
A desktop wallet is downloaded and stored on your computer. It can be susceptible to hacking just as your computer is anytime it’s linked to the internet, but if you’re not storing huge sums on it and flaunting it on YouTube videos (like most of the folk that have had their desktop wallets hacked,) you’ll most likely be fine. These wallets are perfect for moving your money in and out of exchanges and online wallets and hardware wallets and are a super easy happy medium of security and convenience. You will probably wind up using this format a lot, so try a few and see what your preference is.
My current favorite is Exodus. I love the ease of use and features. They don’t sync a ton of different kinds of coins though, so if you start getting into a lot of altcoins you’ll need to have something else, possibly in addition to Exodus. A popular one is MyEtherWallet (MEW) which serves the Ethereum blockchain and all the ETH-based altcoins built on it.
A paper wallet is the low-tech equivalent of a hardware wallet. It takes your funds completely offline by storing the public and private keys on a piece of paper…either printed or written down.
This sounds easy, but it can get complex because you need both the paper keys and a desktop or software wallet to make it work…plus it comes with all the risks inherent to storing important information on pieces of paper. Fire, theft, loss…dogs chewing it up, spilling your wine on it, throwing it away, etc.
Do not recommend at this stage.
So, that’s pretty much it. To recap, my wallet arsenal primarily consists of: Mycelium, Coinami, Exodus, MyEtherWallet, and Ledger Nano-S.
Open some accounts, use hard passwords, keep passwords in safe places, follow basic security measures, don’t brag about your mega-huge-awesome coin balances on the interwebs, don’t lose your phone or laptop, and you’ll be fine. Easy enough, right?
To move your funds from Coinbase to your preferred wallet without ridiculous fees, read this.
So now the question is what next? A lot of that depends on what you want to do with your crypto. If you want to hold it as a long term investment, get thee to the Ledger store and buy that Nano-S and call it a day.
If you want to get more involved and maybe multiply your crypto, you’ve got some homework ahead of you. Crypto does not multiply like other investments without putting some work into it. The value will rise and fall according to current market value, but whatever amount you buy is the same amount you’ll have five years from now if you put it in cold storage (hardware or paper wallet) and forget about it.
To actually make money, you gotta DO SOMETHING. The easiest way to do something is to just take the same coins you bought and sell them at a profit, but at that point you’re out and unless the price dips down below the price you sell at, you can’t get back in and keep your profit.
So, you can trade. That’s actually pretty complicated and way outside the scope of this intro, so if this is what you think you want to do—if you think you have the emotional fortitude and the TIME to do this—stay tuned for more info.
Or, you can invest in Initial Coin Offerings (ICOs) which are essentially new altcoins. There’s a ton of them introduced all the time through their whitepapers which tells you all about why they offer something new to crypto and why you should participate. In order to know if an ICO is legit, you need to read those whitepapers and do your research, DO NOT GO INTO A FORUM AND ASK “SO…WHAT DO YOU THINK ABOUT XXXSHITCOINXXX.”
There are a ton of people acting on uneducated opinions and “tips” that they got from grandma’s best friend’s taxi driver. Do not take random advice from strangers about major investments, DO YOUR OWN RESEARCH….and then hope for the best. ICO’s can be the best thing that ever happened to you or a total scam that will take your money and leave you torn like Natalie Imbruglia.
While you figure out where you want to go with your favorite new addiction, do this:
Get on Google News and set alerts for bitcoin, blockchain, cryptocurrency and any ICOs or altcoins that you’re interested in.
Check out the same keywords on Twitter, and start following industry insiders like Vitalik Buterin and Charlie Lee and Roger Ver.
For crypto news sites, I like The Merkle, Coindesk and Coin Telegraph.
If you’re really into the idea of trading, go through the BabyPips introductory trading analysis course. You can monitor the different coin values and begin to get a feel for how they go up and down by checking CoinMarketCap obsessively like I do.
If the lingo’s leaving you confused, check out this crypto glossary.
TradingView and CoinTracker are more great resources for monitoring charts and investments.
Testnet by BitMex, Whaleclub.co and Cobinhood are good demo/beta sites to experiment with trading, but I don’t recommend them when you start doing the real thing. (With the possible exception of Cobinhood…but they’re only in beta right now, thus the demo.)
A word about exchanges: There’s a shit ton of them. Like seriously, a lot. They all have pros and cons, and they all pretty much offer free accounts, so start opening them up and getting familiar with the interfaces. You’ve got nothing to lose by having an account open and verified on an exchange, but if something happens and you suddenly discover that you want to use them, you’re ready to go. Different exchanges offer different trading pairs, some of them are better for low fees, some of them are known for offering tons of different alt coins, some are favored for ease of use. There is no one single “Best” exchange, but a few of the most popular are Bittrex, Poloniex, Kraken, GDAX, Bitfinex, and Binance is quickly gaining popularity for its altcoin offerings coupled with the lowest fees in the industry, but they are not the most user friendly so…like I said. Open accounts on all of them and keep track of your account and password info or you will get soooooo confused. (Learned by experience on that one.)
After you open all of your accounts, you might find Coinigy an easy way to manage them. They sync with most major exchanges and then you can manage all of your various accounts and trades through a single interface with a great tool kit which I really like. While the interface is actually very user-friendly and great for beginners with its learning resources, it’s a bit complicated to get your accounts set up on there, but ask me if you’re having trouble and we’ll figure it out.
FINALLY, beware the temptation of High Yield Investment Programs like Bitconnect, USI-Tech and others that offer some specific rate of return. They very well may eventually factor into your strategy, but the bottom line is that THEY ARE PONZI SCHEMES and eventually someone’s going to get left holding the bag, and I don’t want it to be you.
If you want to talk about it all a bit more, you can join us in this Facebook group. There are a lot of other forums out there on Facebook, Reddit, BitcoinTalk, etc. as well.
There. I think that’s it. Of course it’s a far cry from everything you need to know, but it’s a start. Basically it boils down to buy some coins, figure out where to store them, and then decide on where you’re going from there. Not sure on that last one yet? It’s fine. You don’t have to commit right now.
More later, ciao.