Cryptocurrency with Chris

A Blog about Crypto from a Curious fellow named Chris! Here to explain all things Cryptocurrency!

Category: Bitcoin

Cash App and Bitcoin Buying!

Welcome back everyone! As you may have noticed from my previous posts, one of my big concerns with the growth of Cryptocurrency is ease of entering the market. Having dealt with trying to purchase and use coins in a variety of (often quite difficult) ways, I know how frustrating it can be to get started. It is often even worse for Americans where government restrictions on currency exchange are even more difficult. I wrote this guide which illustrates what I believe to be the easiest and best method to get started. Yes, it’s easy through Coinbase but it’s often not very quick or cheap after fees. Those are what I absolutely can’t stand, fees and total USD to Crypto transaction time. For a decentralized technology that is inherently quick and cheap, Coinbase certainly tries hard to ruin both when getting in. That’s where Cash App comes in!

Square, Inc., a financial services and mobile payment company based in the United States has recently released a new peer to peer payment service known as the Cash App to compete with Venmo and other payment services. More importantly, the CEO Jack Dorsey seems to be very keen on the future of Cryptocurrency. Because of this, they have added the feature of purchasing Bitcoin through the app! So I went ahead and tried it for you all to see how it compares with the experience Coinbase provides!

Buying

Well, this will be quick. Buying Bitcoin through the Cash App is instant if you link your bank account. I set up a Cash App account, linked my Debit Card, purchased a small amount of Bitcoin, and had it my Cash App ‘wallet’ in a matter of minutes. By wallet, I of course mean the wallet inside the app and not a real Bitcoin wallet. You do NOT own the Private Key to the wallet where your Bitcoin is held. Other than that, they have a very intuitive interface and provide seamless instant purchasing. Could not find any issues with the App itself or process of purchasing the Bitcoin. One small downside is that currently only allow for the purchasing of Bitcoin and no other Cryptocurrencies. If you want to obtain any other Coin or Token, you will have to Transfer it out to another exchange.

Transferring

This is where things seem to get a little more difficult unfortunately. In order to withdraw the Bitcoin from the Cash App, you need to confirm your identity using an ID card or Driver’s license. Yes, I know no one likes to do this, but it is the easiest and most secure way as it stands. These companies need a way to prove you are who you say you are. This is the same process that Coinbase requires and that is because these companies are not in the business of allowing or promoting fraud.

It took me just under 24 hours after submitting my ID to get verified before I could withdraw. All in all, I thought that was pretty reasonable. And also, this is a one-time deal. Once verified, you can withdraw Bitcoin free of charge (on Cash App’s end) in the amount of time it takes to confirm on the network. Awesome!

On my second attempt, when I was already verified, it took me a total of 6 minutes from purchase on Cash App to seeing the pending transaction in my wallet. Woah! If any of you have used Coinbase or GDAX, you know FULL well that it takes much longer than this. Coinbase makes it very difficult for you to actually remove your Bitcoin to your own wallet. I have had Coinbase leave my withdrawals pending for weeks before even initiating a Bitcoin network transaction.

Conclusion and Coinbase Comparison

In the end, I really enjoyed my experience using Cash App. No, I am not being paid to post this (But would be very appreciative if anyone used my referral link to get started). They built a very smooth, fluid, and easy app that allows for near instant purchasing and withdrawing of Bitcoin. Yes, the verification waiting is not ideal, but unfortunately that’s the nature of the beast when buying Cryptocurrency in the United States these days. Hopefully, someday soon, there is a true decentralized exchange so there is no need to deal with a third party.

How does it compare to Coinbase? Well, I think it’s a great option. Exchange that dollar for any Crypto is not easy. Using CashApp you can do it quickly and then you have BTC, a Crypto you can use to obtain any other Crypto easily. It also appeared to be both quicker and cheaper. The total time going from USD to Bitcoin was a matter of minutes compared to my recent 1 week waiting time when using the Coinbase subsidiary GDAX. Both of those times are assuming you were verified already. Also, the fees seem to be less on the Cash App at ~1% versus 1.49% for US users. I might be biased a bit against Coinbase, but I welcome this competition and hope that it will drive both Exchange methods to better themselves.

Cheers! Chris

Getting Started in the World of Cryptocurrency!

Welcome back! This time around, I want to chat about the absolute basics needed to get started with Cryptocurrency investing or adoption. I hope to cover the most popular exchanges, wallets, and security methods so that any beginner can get going. In the future, I hope to dive further into all the options available to the cryptocurrency investor, but for now, I want to get anyone who is interested started and on their way!

I know when I first started, it was quite difficult to wrap my head around everything I needed to do to be assured that I was investing safely and securely. A lot has changed since then, and it is easier than ever to get started. That being said however, there are still many caveats and traps that everyone should we aware to make sure they don’t make any mistakes along the way. Hopefully today, I can lay out the basics needed to get started investing!

Cash to Bitcoin to Your Coin of Choice! Simple as that right? Unfortunately not.

Fiat (Traditional Currency/US Dollar) to Coin 

So where do we start? If you simply want to buy Bitcoin, then it is as simple as setting up a wallet and going to a bitcoin ATM! But if you want to invest in some of the other coins and tokens, there is a bit more work that needs to be done. Assuming I am talking to a mostly US audience, the goal is turn our US Dollars into an equal value of a certain Coin or Token (for simplicity in this article, when I say Coin I really mean any Altcoin, Coin, or Token). Currently, the easiest way for a US resident to do this is to first buy one of the most popular coins through traditional means. I recommend using the exchange Coinbase to buy either Bitcoin (BTC), Bitcoin Cash (BCH), Ethereum (ETH) or Litecoin (LTC). This can be done relatively easily by linking a bank account or using a credit card. While using a credit card is definitely more secure, they charge a pretty brutal 4% fee for doing so and only a 1.5% fee for using a bank account. In addition, some credit card companies have stopped allowing purchases of Cryptocurrency so beware. Once your payment method is squared away however, it’s rather easy to use the ‘Buy/Sell’ tab on the home page to directly purchase any of the four currently available coins. Congrats! You know own Cryptocurrency!

The next step is heavily dependent on which coin you want to own. If it is one of the four coins above, congratulations! You are now the proud owner of Cryptocurrency! Skip to the section on Coin safe-keeping to learn what to do next!

Exchange to Exchange

For those who want to dive deeper and obtain a Coin not offered in Coinbase, we need to transfer our current coins to an exchange that allows for trading between our purchased Coin and the Coin we hope to obtain. In my experience, Binance has the most trading pairs available and almost all the Coins any new investor might need. If your desired coin is not on Binance, check out KuCoin or even Bitfinex otherwise you may need to do research on where to obtain it. In order to get your Coins to this new exchange, first sign up with that new exchange (assuming you are using Binance, but other exchanges will operate in the same way more or less). At this point, I would recommend setting up Two Factor Authentication using Google Authenticator or the likes to make your account more secure from tampering. While not necessary, there is a lot of value in adding an extra layer of protection whenever possible. Once all set-up, locate your deposit address for the Coin you already own. Assuming Binance and Ethereum, simply head to the top menu and select Funds -> Deposits. Select Ethereum from the drop-down menu and copy the ‘ETH Deposit Address’ it displays. This is your Binance Wallet Ethereum address and is important to keep safe and accurate, so you send your ETH to the correct place every time.

Once you have your deposit address, head back to Coinbase and go to Accounts. Here you should see balances for all the Coins as well as any transactions you may have made. Simply select send on the Coin you wish to transfer and input your address. Make sure you use the exact same address specified by your Destination Exchange. If even one character is incorrect, the Coins will go to the wrong address and this is irreversible. Always double-check. Once you hit send, Cheers! This is most likely the first Cryptocurrency transaction you have ever performed. Head back to your destination exchange, wait for the transaction to be confirmed on the network, and then enter the trading markets to obtain the coin you wish!

Coin Safe-keeping and Security

Now that you have finally obtained the Coin or Token desired, it’s time to store it securely until you either want to sell it or use what every utility it may provide. I highly recommend against keeping any coins on an exchange unless planning to trade them away in the near future. While generally pretty secure, if the exchange is hacked, there is a good chance you will lose your coins and there is nothing you can do about it. I would much rather take security into my own hands and pull the coins out into the officially supported wallet with a seed/address only I know and can protect. This process if different for each Coin and Token so I will leave it to you all to do the proper research on how to do so, but generally it is pretty easy to look up the official Desktop or Mobile Wallet, install it, and generate a Seed/Address to house your coins. Once done, you can Withdrawal the coin from the exchange by sending it to that address. If you have any questions, please feel free to comment below and I am happy to help! There are also more secure Hardware wallets that allow you to completely disconnect from the grid which I highly recommend looking into. But I will go into a Hardware Wallets and what they bring to the table in much more depth in a later post!

So there you have it, the quickest and safest way to take Fiat and exchange it for whatever Cryptocurrency you wish!

Cheers!

Chris

Bitcoin Basics!

Hello everyone! Since this is my first post, I figured we would keep it simple and start out with the basics . So today, I want to talk about the basics of Bitcoin and the Bitcoin blockchain! If you are already familiar with Bitcoin and its technology, most of this will seem simple and redundant, but I think it is important for everyone to have a strong understanding of the basics before moving on to anything more complicated!

So what is Bitcoin exactly? Well, on a very basic level, Bitcoin is a peer-to-peer digital currency where all transactions are tracked on a public ledger and all users are simultaneously aware of all transactions whether they took part in that transaction or not. Now, this is a tough sentence to wrap your head around if you have no experience with Blockchain or Bitcoin technology so let’s break it down piece by piece.

By Peer to Peer, I mean that any Bitcoin or fractional bitcoin can be sent directly from one user to another without any third-party intermediary. This is quite unique compared to traditional monetary systems where usually a bank facilitates the exchange. I could send 1 BTC to my friend in China without worrying about exchange rates, government intervention, or tracking. This is the concept of decentralization and is one of the key advantages that cryptocurrency offers.

Basic Blockchain Diagram detailing contents of a basic block and the links that connect them.

The next aspect is the concept of recording all transactions on a public ledger. This is a big one. The ledger is a series of blocks where each block contains a reference to the previous block (creating a chain), a time stamp, and data about the Bitcoin transactions being added to this block (See above Diagram). This blockchain is encrypted using advanced cryptography and is incredibly hard (impossible more or less) to change the content of the block once it is written. This ledger is also public meaning it is distributed amongst all Bitcoin users so anyone can see past Bitcoin transactions. Anyone can see transaction amounts and addresses associated with such transaction, but not who the addresses belong to keeping the parties involved anonymous. This further supports the idea of decentralization because no one party is controlling or overseeing all transactions.

Finally, all users are simultaneously aware of all transactions. This derives from the concept of the distributed ledger and every user being aware of previous transactions. When a transaction is initiated, third-party miners confirm that the transaction is not a duplicate by reviewing the content of the ledger. This solves any duplicate spending issues without the need for centralized management because any person can mine and confirm these transactions. Miners are incentivized because they are given the transaction fees associated with the transaction as well as a reward for creating the next block in the chain.

Now you understand the very basics of Bitcoin and blockchain technology! One last thing I want to talk about is what exactly a Bitcoin is because this is often hard to rationalize. Bitcoin is not a physical coin or note. It exists purely in a digital world as data on a long public blockchain. Therefore, it really has no intrinsic value. Unlike traditional companies, there are no assets or intellectual property that creates value for the coin. It’s only value is what we as owners and users believe it is worth and what we are willing to pay for it. This is very key to understand because it is the nature of most criticisms of Bitcoin. Any day, at any moment, users could lose faith in Bitcoin because a flaw in the technology is exposed or because something faster or better is released causing the value to plummet or even go to zero. That is why Bitcoin is and should always be considered a risky investment until mass adoption is reached.

That is a very basic description of Bitcoin and blockchain technology. Unfortunately, it only scratches the surface of the intricacies of this technology, but in future posts I hope to go into each aspect in more depth as well as introduce different cryptocurrency technologies that are not blockchain based.

Cheers!

Chris