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Overview of this Cryptocurrency Beginners Guide:
- How to buy Bitcoins (and other coins)
- How to store coins in a wallet
– Hot Wallets
– Cold Storages
- What is an altcoin / How to buy altcoins
- Day Trading or Investing?
- What is a Satoshi / Sat
- Crypto Slang
- Advantages of Cryptocurrencies in general
- 5 Rules to Follow once you get in touch with Crypto
How to buy some Bitcoins (and other coins)?
Your first step into this journey might be the question how to purchase this darn Bitcoin-thing. There are several options, though be prepared on very high fees from these exchanges. However, there is a trick to reduce them drastically. We will mention it later in this section.
Most people start with Coinbase, which is a truly convinient and easy way to purchase Bitcoin, Ether or Litecoins. However you will pay for this convenience with high fees. Most US people buy their coins there. However, they take often very long until a deposit is credited to the account, especially if wired. Much faster is Coinmama, where you pay with Creditcard and get your coins pretty quick.
If you feel fancy and if you are a bit more tech-savvy you can use this tutorial for depositing a fiat currency (like USD) to coinbase and then use their exchange GDAX to get your coins with fees near to nothing:
Basically one can say, the more convenient you buy Bitcoins, the higher the fees will be you pay for it.
The most common coins are Bitcoins ($BTC), Ether ($ETH) and Litecoin ($LTC). These are easy to get with credit card and other fiat currency payment methods. Smaller coins (or better tokens), so called ALTCOINS, are mostly purchased with BTC, so Bitcoin will become your standard currency to purchase other coins you might find promising and worth to hold. Therefore you will have to transfer your BTC to an exchange like Bittrex or Binance. Wallets? Other Exchanges? What the heck you talkin’ bout? Let’s move on!
How to store your Coins in a wallet?
Your coins / tokens can be stored in a wallet. You should not keep your holdings in exchanges, these get hacked way to often and maybe you heard about the Mt.Gox drama in the past. We don’t want that. Basically you always have a public key for receiving coins and a private key which you need to send coins. This PRIVATE KEY is for YOUR EYES ONLY. Never share it with anyone – there is no exception to this rule. Back to the wallets, there are several concepts to store your coins:
Bascially there are
- Hot Wallets and
- Cold Storages
A hot wallet is accessible via the internet, good examples are a web wallet, an app or an exchange wallet. If you create for an example a bitcoin wallet on a website, you will get a public key, this key is like an address where you can send your bitcoins to. This can be shown in public, but you should know that these keys can be scanned from the outside and reveal your amount of stored coins in that particular wallet to everyone who knows this key. So let’s do an example. You purchased 2 ETH on coinbase and they are now credited to the wallet there. You want to increase the security, so you create a wallet at MyEtherWallet. You don’t need an email address for that and it is confusing that there isn’t an account created like on other websites. There are several ways to protect your account, we pick the keystore file here. So the process would be:
- Open MyEtherWallet (make sure to be on the real website), choose a password.
- Download the Keystore / Json File to your computer.
- Now everytime you want to login, you fill in the chosen password from step 1 and upload the particular file.
- For an extra level of security, you delete this file from your computer and just keep it on a USB drive.
Despite the name “MyEtherWallet” (MEW) you can store all ERC20 tokens there, which are many tokens. All these tokens can be stored in MyEtherWallet.
Many coins / tokens have their own web / app / desktop wallets. Check it out for each of them you are going to buy.
A desktop wallet is a program downloaded on your computer. You run it on your machine and store your tokens there. A really good one is Exodus, which can hold many different coins / tokens in one place. Be aware of the possibility of hacked or crashed machines.
Cold storages are way more secure than hot wallets. They are not connected to the internet and therefore the risk of getting your coins stolen with a hack is much lower. There are several approaches to store your coins offline:
- Hardware Wallets
Hardware Wallets are like advanced USB sticks with a display and several additional security measures. The most popular ones are by LEDGER, made in France. The cheapest option is a Ledger Nano S for around $70, you can read more about this hardware wallet on their website. Here is a video on how to use a Ledger hardware wallet.
- Paper Wallets
Paper Wallets are simply a piece of paper containing your public and secret keys. The value of your wallet is stored on the blockchain, connected to your keys. The public key is used to be able to receive transactions, the secret key is needed to open your wallet and send transactions. With a printed piece of paper you can be sure your coins don’t get lost by a computer crash, a hacker attack or similar problems.
- USB sticks with the needed web wallet files
If you generate a web wallet like with MEW, you can store your JSON file and your passphrase on a USB stick and store it there instead of on a computer that is accessible to the internet and therefore hackable or could crash.
- Physical Bitcoins
With a physical bitcoin the manufacturer installs a public address and a hidden private key with the coin. It is more of a bearer item. The private key is hidden, so the coin cannot be spend as long as this is granted.
How to buy Altcoins – and what is the heck is an Altcoin?
Altcoins are all coins / tokens beside the big three, Bitcoin, Ether and Litecoin. Many altcoins have promising projects behind it and use the coins within their project. One example for an altcoin is IoP, here you can read an interview to get an idea. So, now you found a great project you want to invest in – how do you buy them? The websites of those projects don’t offer a direct purchase of their coins. This is where you need exchanges. Every lists different coins as the total amount of available coins is growing every day. Let’s order some altcoins step by step!
Let’s assume you made your research and read this article about holding some coins for some time and want to buy some now.
- First you need some BTC or Ether, you can purchase them with your credit card at coinbase or coinmama.
- Once credited you sign up with another exchange that offers the coins you want. In our example we are purchasing $STEEM, $NEO and $SYS. If you just want to exchange very fast, you purchase your $Steem at Changelly (here you could skip the prior step, they accept credit cards as well). For $NEO you would signup at Binance as $NEO pays $GAS for holding (which is basically another coin, you could simply hold or trade – FREE MONEY). Many exchanges don’t pay this $GAS out to the users that hold $NEO on the exchange, this is why we choose Binance here as they do it. For $SYS we go with Bittrex, this is the major exchange and market leader. See our Bittrex Guide here for a walkthrough. Other big exchanges are Poloniex, Bitfinex (stay away!) and Kraken (based in Europe). I also have chosen $NEO for this example to make you aware that there is something special with $NEO, as unlike other coins it is not divisible. This means you can only transfer in whole numbers (+plus the transaction fee). If you purchase $NEO also top up with the fees of the exchange you are using. If you want to hold 10 $Neo in your wallet, you have to buy 10 Neo + the withdrawal fees to be able to withdraw 10 $NEO, otherwise your wallet would receive only 9 $NEO and the decimals stay in the exchange (and are tradable). Here is some more info about $NEO and its wallet:
- You have your $BTC or $ETH still in coinbase, so you want to hit the Deposit button on the exchange you have chosen. You chose what to depost, let’s say $ETH. You will see a cryptic wallet adress, which you copy – very exactly, don’t copy whitespaces or anything else just the numbers and letters. Then on coinbase you hit the send button and paste this priorly copied address. Hit send!
- Once the transaction has started you will get an TXID, a transaction ID to observe what your transactions does right now in the blockchain. Please know this transfers are not instant, they need to be confirmed by miners. Bittrex for example asks for 30 confirmations until your sent amount is available in the exchange. Simply copy this TXID and paste it at Etherscan if you want to follow the process. Know that Litecoin or Ethereum transactions are much faster than Bitcoin transactions. Please be patient and don’t panic. If the wallet address is correct it will appear sooner or later. Please note: These transactions are not reversible – once done you can’t stop them and there is no thing like opening a PayPal dispute. You are fully responsible for your transactions.
- You will see the sent amount appear in your accout account. If you sent Ether like in our example, you want to trade on the Ether markets. Usually there are three kind of markets available Coins against BTC, Coins against ETH and Coins against USDT. If you want to purchase those $NEO now, you would choose NEO/ETH. This whole process seems to be complicated at first, we suggest to use Changelly for your first transactions – this is by far the most easy streamlined process available. Once you get into the whole thing you can change to other exchange like Bittrex or Binance.
- Once you purchased those coins and intend to hold it, you can use the appropriate wallets. We suggest this for larger amounts. However, if you want to sell them quickly once they generated revenue for you, you would like to leave them on the exchange (again, if this is not a risky high amount – as exchanges can get hacked, or – like coinbase does often – are not accessible due to huge price amounts
That’s it 🙂
Daytrading or Investing?
There are two ways how you can handle your coins – you can daytrade them or keep them as an investment. This is an important decision you want to make in the very beginning of your venture. Let’s see what the difference is:
This means basically that you buy coins / tokens and try to sell them at a higher price in a short timeframe. This needs much training and knowledge in technical analysis and fundamentals. You won’t be happy in the long run if you just go for it. You will need a trading plan. Many coin owners are day trading without even knowing it. It is a bad idea to use facebook groups for example to read about this or that coin, sell in a loss to buy into another coin and so on. Your funds will be bleeding in the long run. If you can’t be stopped of doing this, you might have a look into this selected Telegram groups, which offer good signals – tested by us. If you want to get your feet wet and learn to trade the crypto markets, we suggest you to take this great course, which we also tested ourselves. Also interesting for daytrading crypto is to learn more about buy and sell walls and to get some general ideas about trading altcoins. Be aware not to get in panic, once BTC pumps and your altcoins drop.
You research about projects and the coins they issued. If you found something promising, like let’s take POWER LEDGER, you research the team, check their LinkedIns, see what they are trying to build and if this is needed in the future and solves a problem and last but not least what their coin is actually used for. Then you purchase and forget it for some years. Don’t be tended to check the price all the time, as it goes up and down all the time. Chances are high that you will get stressed once it tanks for some time and sell it in a loss. Cryptos are highly volatile so this will happen. The long term way is the thing we have an eye onto, not the ups and downs. We will come up with an article about investing focused on the Dollar Cost Average soon and a strategy on how to get into this game for the long run.
What is a Satoshi? What means “Sats”?
Bitcoin was invented by a mysterious person or a group of persons appearing as Satoshi Nakamoto. A Satoshi, commonly referred to as “sats” is the smallest unit of a Bitcoin, so it is a one hundred millionth of a Bitcoin.
1 Satoshi = 0.00000001 BTC
100 Satoshis = 0.00000100 BTC
1,000 Satoshis = 0.00001000 BTC
10,000 Satoshis = 0.00010000 BTC
If you want to trade you should get familiar with it, as you mostly will trade against Bitcoin and thatfore everything is calculated in Sats. Be sure to stay ahead and always think also $ wise, so you don’t lose the feeling for the amounts you are investing.
The Crypto Slang
The more you dig into the rabbit holes, the more strange terms will appear that seem to make no sense. Here is a list with “translations”:
- ALTCOIN means all the smaller coins. Some say everything beside Bitcoin is an altcoin, most though wouldn’t consinder ETH or LTC as an altcoin anymore.
- BAGHOLDER is someone that bought a coin in the belief it would soar soon, but dropped instead. As you should never sell in loss, you hold the coin in your bag of coins now, until you can sell it with profit.
- BEARISH means the price going down
- BULLISH means the price is going up
- DUMP means whether one sells a coin, so he is dumping it or a coin is dumping in general, a huge sellof so the price drops significantly
- DYOR is short for “Do Your Own Research”
- FOMO means the Fear Of Missing Out. This often happens when the price of a coin increases very much and you buy in because you fear to miss large profits.
- FUD means Fear Uncertainty & Doubt – someone spreads bad news, so a coin gets dumped
- HODL is the acronym for Hold On for Dear Life and means not to sell a certain coin. It first came up in a Bitcointalk thread.
- MOON means the price of coin is predicted to shot up very high. Actually it doesnt mean anything as it one of the most overused words in Crypto.
- PUMP means a strong upward movement.
- SHITCOIN is whether a coin with no use, like $Dodge for example or some use this term for every coin beside Bitcoin
- TA means Technical Analysis
- REKT means to get burned with a huge loss
- WHALEs are market movers that buy in for unbelievable high sums and therefore manipulate the pricesAnother post by us is also about the use of crypto slang andwhat is going in groups and forums. Just to be aware 🙂
10 Advantages of Cryptocurrencies in General
How much do you know how today’s market conditions affect ranking good investments? If you want to crape various crypto-currencies on exchanges like Poloniex, Bittrex, Bitfinex, Kraken, and others it’s important to have the know-how in order to get the best results. Various strategies can be used for day traders and short-term holders but can be applicable to any type of cryptocurrency trading. There’s various helpful investment practices/strategies you can use. If you use the right strategies you can experience growth up to 2x higher on daily investments.
It’s important to keep in mind that nothing in life is 100%. Like other markets, cryptocurrency markets can be VERY volatile and change quickly. The key is to make safe investments that will help to provide the best results. If you make the best investments there’s a good chance you can get high returns. However, there’s always going to be some risk so it’s critical to minimize your risk.
Why should you invest in cryptocurrencies to being with? They can provide several benefits including the following ones:
When you make crypto-currency transactions there’s no need to share your identity/location. There’s also no info you have to share with the bank and government about the deal. As a result, it can be said that the investment is 100% de-centralized.
- No limits
In the case of using crypto-currencies for transactions, there’s no boundaries. For example, the sender and receiver can be in different parts of the world but you can still transfer funds without any issues. In addition, transactions between countries are very easy in the case of crypto-currencies since no central bank controls them.
- No chargebacks
After making the payment you can’t chargeback. This greatly lowers the chance of fraud, which is critical. After the transfer is done it can’t be reversed. Unlike credit cards, you can’t file a chargeback. Such actions have its drawbacks, but can also be a plus as well.
- Lower costs
It’s very expensive to transfer funds by suing other banks/forums is very pricey since they can have big fees for each transaction. There’s also the fact that companies that process credit cards charge high fees.
However, the situation is different with crypto currency. That’s because the costs are very low or there are no costs at all. In the case of credit/debit cards the seller who pays the fees. However, in the case of crypto-currencies the buyer pays the small fee.
- No third party
You’re in charge of your money in the case of crypto-currencies. You can keep it in your e-wallet and use it as you want. There’s no third party involved so you don’t have to trust organizations like banks.
- Safe personal info
In the case of crypto-currencies people can’t steal personal info from merchants. This results in sensitive data being private. If you create a proxy ID you can be assured that nobody knows anything about you. This is definitely a plus.
- High security
All the transactions are super secure since they’re using cryptography created by the NSA. IT’s almost impossible for anyone other than the e-wallet owner to make payments using your wallet. The exception is if they’re hacked. The good news is there are in fact several methods to protect yourself from them. It’s important to learn the different methods so you can use them.
- Stay anonymous
There are some coins that can help you remain anonymous. However, while it’s often believed that all of them can it’s simply not true. In the case of Bitcoin, it’s “pseudonymous” since people will never be aware of precisely your identity on the blockchain. However, can get some info from it. This is something to keep in mind.
- Fast/easy payments
It’s quite easy to make payments via crypto-currency. In fact, you can do it in a couple seconds. It’s quite fast since you don’t need to input several details and you don’t even need to enter details for debit cards or credit cards. All you need is the e-wallet address of the person/company you want to send a payment to.
The amount is credited to the receiver in a couple seconds/minutes based on the type of crypto-currency you’re investing in. The process is quite easy and it’s one of the main benefits of this type of investment. It’s definitely a plus over other types of investments that are more complex. That’s why this is one of the best options if you’re looking for new investments to make.
- Easy access
Cryptocurrencies are already available to the general public. In fact, nearly anyone can use it. It’s an operation that’s de-centralized and investors throughout the world have access to them. There are several projects that are using crypto-currency to raise funds. Nearly everyone that can make fund transfers using the Internet can join such projects.
This is a critical issue because it means it’s quite easy to get involved in crypto-currencies. This is different from other types of investments that are very difficult to get started in based on factors like how much capital you have to invest, the experience you have investing, etc.
5 Rules to follow once you get in touch with Crypto
- Invest based on risk tolerance
Take some time to figure out how much risk you’re willing to take on. In some situations, investors are willing to take big risks and in others, it’s not the strategy they want to use. It’s basically about how much of a gamble you’re willing to take. Remember that you can’t make big earnings quickly unless you’re willing to take big risks. So it’s an important issue to consider.
- Keep your coins safe
This is another step to consider in order to get the best results. There are several online resources where you can find helpful information about how to do that. The key is to do your research so you’ll know which steps to take. If you take the best steps then you can be assured your coins will be safe, which can help to give you peace of mind. As always it’s critical to protect your investments.
- Buy bitcoin now
If you purchased bitcoin a decade ago then you certainly made a good investment. However, if you didn’t do that then you should still consider doing it now. That’s because you can still make some big earnings in crypto-currencies. However, the key is to get started as soon as possible. This will help to get you on track in terms of your revenue from bitcoin. However, if you put it off then it could mean you’ll miss out. There are signs crypto-currency will continue to increase in popularity. This is no financial advice and we are no financial advisors.
4.Invest in what you can lose
It’s important not to invest more than you can realistically afford to lose. This situation is like many other types of investments. It’s critical not to make huge investments when you can’t afford to also experience big losses. On the other hand, if you can afford major losses then it might be worth the risk of making investments that include big amounts of coins. This requires some number crunching to figure out what you can afford to invest/lose.
- Do your own research
This is important to make sure you’ll get the latest info and info you can trust. Meanwhile, if you get the info from third-party sources there’s a greater chance the info isn’t true. That’s definitely a situation you’ll want to avoid. The way you can do that is by doing your own extra research.
The key is to know about the various market conditions that exist now and also invest using common sense. This is a learning process and if you’re a newbie you’ll quickly get used to everything. This is especially true when your portfolio shrinks and you’ll have to figure out which tweaks you should consider making.
There are many investors that make trading decisions based on price movements. This can cost you a lot of money so it’s a situation you’ll want to avoid. However, if you read order books and do your homework about crypto-currencies you can start making better investments. This can help to improve your portfolio.
The good news is there’s a lot of online information and advice you can access this will help you to make decisions when you invest in crypto-currencies. That’s the ultimate goal, but you have to be very careful. Always keep in mind: Crypto = Unregulated = Wild West! The particular advice/recommendations aren’t as important as getting the results you want.
We really hope to give you a brief overview about the Cryptoworld with this post. Of course there is so much more to learn, but this should give you a first impression of the very much needed basics. Please feel free to ask your questions in the comments field below. We will try to answer you quickly.
Enjoy Trading. Enjoy Cryptos!
When nu post?
- Learn which Crypto Signals Provider really perform
- Get unbiased well-researched & merciless coin reviews
- Grab trading education, our market updates and cryptocurrency news!