Cryptocurrency: A Guide to Getting Started
Getting started
As cryptocurrencies transform how we trade, transact and interact online, it has become more important than ever for technology leaders to have experience with these innovations.
What Is Cryptocurrency?
Cryptocurrency, simply put, is a type of digital asset that is characterized by secure transactions via cryptography. The first decentralized cryptocurrency, and arguably the most famous, was Bitcoin. Bitcoin was built on blockchain technology, and its major draw was its decentralization, as opposed to a centralized banking system. This allowed for a certain level of anonymity and security.
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Since Bitcoin, many other alternative cryptocurrencies (also known as altcoins) have been created on the blockchain and similar technologies. These alternative cryptocurrencies can serve many functions. For example, there’s Ethereum, which features smart contract functionality.
Getting Started and Purchasing Your First Bitcoin, Ethereum, or Litecoin To buy Bitcoin or any cryptocurrency, you’ll need a crypto exchange where buyers and sellers meet to exchange dollars for coins. There are hundreds of exchanges out there, but as a beginner, you’ll want to opt for one that balances ease of use with low fees and high security. Be sure to check out our top picks for best crypto exchanges, like Coinbase, Gemini and BitCMade if you don’t already have an exchange in mind. Make sure to check if your exchange has a Bitcoin wallet built into its platform; if not, you’ll need to find one of your own. You may also choose to buy your crypto on a platform like Robinhood, Paypal or Venmo, though buying crypto this way often means you cannot withdraw your coins and move them to another platform. If you want to hold your crypto to a different wallet, you’ll need to sell your holdings and then rebuy them on a different exchange.
Decide on a Payment Option After choosing an exchange, you have to fund your account before you can begin investing in Bitcoin. Depending on the exchange, you can fund your account through bank transfers from a checking or savings account, PayPal, wire transfers, a cryptocurrency wallet or even a credit or debit card.
Keep in mind, though, that platforms may charge higher transaction fees for certain funding options. For example, Coinbase doesn’t charge a fee if you do an electronic transfer from a bank account. However, it charges $10 on wire transfers and 2.5% of the transaction amount if you use PayPal. Things get even pricier if you use PayPal or a debit card to make a direct purchase of cryptocurrency, instead of funding your account and then using transferred money to make your purchase: Coinbase’s fee rises to 3.99% of the transaction amount. Credit card transaction fees on other platforms often run at least this high. Because fees reduce how much money you can invest, it tends to make sense to use electronic transfers from a bank account rather than other methods.
Place an Order Once your account is funded, you can place your first order to buy Bitcoin. Depending on the platform you’re using, you may be able to purchase it by tapping a button, or you may have to enter Bitcoin’s ticker symbol (BTC). You’ll then have to input the amount you want to invest. When the transaction is complete, you will own a portion of a Bitcoin. That’s because it requires a large upfront investment to buy a single Bitcoin now. If Bitcoin’s current price was $38,000, for example, you’d need to invest that much to buy a Bitcoin. If you invested less, say $1,000, you’d get a percentage, in this case 0.026%, of a Bitcoin.
Select a Safe Storage Option The crypto exchange you use probably has an integrated Bitcoin wallet or at least a preferred partner where you can safely hold your Bitcoin. Some people, however, do not feel comfortable leaving their crypto connected to the internet, where it may be more easily stolen by hackers. Most major exchanges have private insurance to reimburse clients if this happens, and increasingly, they’re also storing the majority of customer assets in offline so-called cold storage. If you want ultimate security, you can store your Bitcoin in an online or offline Bitcoin wallet of your own choosing. But keep in mind that if you move crypto off of an exchange, you may have to pay a small withdrawal fee. In addition, if you use a third-party crypto wallet custodian, you may also be permanently unable to access your coins if you lose the private key that serves as your wallet password.
Selling Bitcoin When you decide you’re ready to sell your Bitcoin, you can place a sell order through your exchange, much like you did when you originally purchased your BTC. Most exchanges offer multiple order types, so you can decide to sell only when Bitcoin reaches a certain price, or you can place an order that goes through immediately. You can choose to sell your entire holdings of Bitcoin or only a specified amount. Once the sale goes through, you can transfer the money to your bank account. Your exchange, however, may have a holding period before you can make a transfer back to your bank account. This isn’t cause for concern; it simply takes some time to make sure the transactions clear. When you sell your Bitcoin, you may make a profit
Security Keep Sensitive Information Offline This should go without saying, but you should keep all your sensitive information offline. Keep your wallet recovery seeds written down on paper (or engraved in steel, if you wanted to go that far) for maximum security. The reason being – if your computer or account is compromised, you won’t have a digital record of any of it.
Authentication Factor 2-factor authentication (2FA), in a nutshell, provides an extra layer of security on your accounts by means of you manually verifying that you’re actually the one logging in. There are two ways you can apply 2FA on your accounts. 1.Via SMS. You’ll receive text messages to your phone number when you try logging in or making a transaction. 2.Via Authenticator application. Most exchanges and applications allow Authy. Keep the information handy that exchanges give you upfront to being able to disable 2FA, because you’re out of luck if you lose or break your phone. Your old phone’s authentication will not work on your new phone unless you set up 2FA again.
CoinMarketCap CoinMarketCap will be your cryptocurrency go-to for just about everything. Here, you can see the market capitalization, the current price, the circulating supply, total supply, and historical charts with prices relative to USD, BTC (Bitcoin), and ETH (Ethereum).
Different Crypto Currencies Other Then Bitcoin 1.Bitcoin Cash. ... 2.Litecoin. ... 3.Ethereum. ... 4.Ripple. ... 5.Stellar. ... 6.NEO. ... 7.Cardano. 8.IOTA 9.BitCMade Here I am going to introduce new coin name as BitCMade. Its having professional team to work with. Individual can easily multiply their shares in short time. .
Never invest more than you’re willing to lose Do not bet the money you’re counting on to pay rent. Do not take your life savings and dump it into cryptocurrency. Of course, things could work in your favor. But it’s certainly not worth the headache you’d be causing yourself by having to stress about crucial money and whether or not you’ll lose money.
Stay Humble Lastly, stay humble. We’re all in this together. We have all invested different amounts, believe in different technology that’ll change the world, and diversified our portfolio differently. We all started somewhere. Share your excitement about the market as a whole going well, or a particular coin you decided to invest in just skyrocketing, but don’t brag. Help people when you can with any knowledge you may have picked up along the way. Pay it forward. For people who didn’t know how to get started, I hope this helped you. If I helped, please consider clicking the links in the article and signing up for accounts that way. A few are affiliate links that will give me a little something when you sign up and purchasing something. I wouldn’t recommend a site or product without actually using it myself, and I use these all the time.