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!
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!