The safest way to get started with cryptocurrency
While getting started with a Coinbase account may be relatively easy for newcomers to crypto, that’s not to say that it is the most safe and secure way to go about things. With Coinbase, you are actively sending your identification to a foreign party (the company itself), and linking your actual bank account/s (or PayPal) to it.
Thankfully, there are plenty of other ways to get started with cryptocurrencies. We are going to take a look at a secure, safe way to get started with Bitcoin, although there are similar methods to doing so with Ethereum or other altcoins.
First steps: Setting up a wallet
Before you do any crypto buying or selling, you need to get yourself a wallet to store funds in. Let’s just say you want to purchase some Bitcoin, maybe hold it a while, before you cash out or spend. The most secure and safest way to do so is to generate a paper wallet, stored via a seed.
Now, for the safest and most secure paper wallet generation there are quite a few hoops to jump through.
What you’ll need:
- Your regular laptop/desktop, connected to the internet
- An old laptop/desktop (safer: with a DVD drive), not connected to the internet
- A brand new USB (safer: DVD), from a trusted provider (eg. Kingston)
- Tools to access inside the laptop
Steps to generate the securest paper wallet:
- Format the old laptop, via the recommended process from Windows/Mac/Linux
- Use the tools to remove the network card from the old laptop
- Download Tails live disk to your USB or DVD, using your regular laptop/desktop
- Boot to the Tails live disk on your freshly installed operating system (via start-up settings)
- Create a standard wallet with Electrum (software bundled with Tails) and create a new seed, using the standard seed type — write your 12 word seed down on a piece of paper
- Write down your public key for the wallet (via Electrum docs)
- Download Electrum on your regular laptop/desktop
- Setup a new standard wallet with Electrum on your regular laptop/desktop (via Electrum docs again), but choose “Use public/private keys” in the settings
- Enter your public key to make a “watch only” wallet, so you can see any transactions via your paper wallet, stored with your seed.
- Store your paper seed words in a secure location!
Next: Purchase some Bitcoin
If you are looking for a place to buy Bitcoin the most securely, safely, and anonymously — the best way to do it in cash, via a transfer with another person — a verified seller. You can often do this at Bitcoin meetups. Online crypto P2P marketplaces such as Paxful or LocalBitcoins may show people to trade in via cash (or gift cards, such as iTunes and Steam cards, that you’ve purchased in cash), depending on your jurisdiction. You could also sell something on an online marketplace such as Bitify, where people will pay you in Bitcoin. Bitcoin ATMs in your country may not require ID.
However, anonymously purchasing Bitcoin is becoming more and more difficult in many countries. If you don’t mind that your purchase won’t be anonymous, then you can purchase on a trusted exchange which trades in fiat currencies such as BTCMarkets, but ID will be required.
Note: Trusted exchanges and marketplaces evolve and the examples used in this article were current at the time of print. Make sure to check up which are best when you read this!
This article is part of our Getting Started with Crypto Series; follow Academy’s medium page for more articles like this.