The Beginner’s Guide to Bitcoin & Cryptocurrencies
Are you interested in Bitcoin & other cryptocurrencies but don’t know where to begin? If you read this entire guide and watch all the videos linked below, you will know everything you need to know to navigate this exciting crypto-world!
This is not investment advice! I am simply pointing you in the right direction if you are interested in learning more about Bitcoin and other cryptocurrencies. It is extremely important that you do your own research and consult your financial advisor before you purchase or invest in any cryptocurrency or other investments. In this article, I have added links to cryptocurrency exchanges as well as the best educational resources I have found and used in my own personal crypto studies.
General intro to Bitcoin:
How it works video
How to get started:
The easiest and most secure way to get started with cryptocurrencies is the exchange Coinbase. You can use Coinbase to purchase the 3 most well known and popular currencies; Bitcoin (BTC), Ethereum (ETH) & Litecoin (LTC). If you use the link in this document you and I will each receive $10 dollars of Bitcoin when you sign up and invest $100.
More Advanced Bitcoin Trading:
Coinbase is meant to be an introduction to crypto trading. They have an easy to use and simple interface but limited trading tools and higher fees! Once you are comfortable handling Crypto I would recommend moving to GDAX. GDAX is owned by Coinbase and links to your Coinbase account. The reason GDAX is superior is because it has additional trading tools, better charts, and much lower fees! 1.5% with Coinbase verse 0%-0.03% with GDAX.
There are many other “alternative” cryptocurrencies that are not available in Coinbase or GDAX. Some of these “altcoins” are extremely popular while others have yet to prove themselves or are outright scams (such as Bitconnect an obvious Ponzi scheme)! I am not going to go into a ton of detail here but make sure that you research a team, community, product, and are very confident in the product before investing.
There are a ton of “altcoin” exchanges, I use Bittrex and Binance personally. They are all flawed like the video mentions. NEVER leave a significant amount of money on your exchange wallet and make sure to read the terms of service.
Initial Coin Offerings (ICOs):
I STRONGLY advise against ICO especially if they are fundraising before the product has been built. Do your own research on this subject. I do not participate in ICOs.
You are not taking full advantage of cryptocurrencies if you count on a third party like Coinbase or another exchange wallet to store your Bitcoin and other cryptocurrencies. You should only keep money in your exchange wallets if you intend on spending it or trading with it. When you store your coins on exchange wallets you do not control your private keys aka your money.
Every crypto asset is made up of two parts. A public key which is viewable on the blockchain and the private key that controls it. If you are not in possession of your private key then you don’t actually have control of the money. You are trusting these 3rd party companies to safeguard your non-replaceable crypto money. In order to properly protect your crypto assets, you should set up your own personal wallet to store your keys in.
Smartphone Wallet Apps:
These wallets store your private keys locally on your phone rather in a centralized exchange server. These wallets are very convenient but because they are connected to the internet they are not as secure as other forms of crypto storage. There are a ton of free apps online. Make sure to research and read reviews before you trust any of them to handle your money. I personally use Mycelium for bitcoin. The Litecoin Foundation has also created the Loaf Wallet for Litecoin.
The most secure way to store your Crypto is in “cold storage”. This essentially means that the private keys are stored somewhere offline and not connected to the internet.
The two most popular Cold Storage wallets are Trezer and Ledger. I use the Ledger Nano S based on currency support and I like the design of the hardware. Although I have heard many reasons why Trezors are better. Do your own research and decide which is right for you. They are also available on Amazon.
Paper Wallets are great because they are extremely secure and free. You can make multiple copies of these wallets for security but if you lose all of your paper wallets or they are destroyed then you will lose the currency permanently. BEWARE! Many sites used to generate these paper wallets are phishing for your info and bitcoin.
I have linked to some of my favorite educators on both Youtube and Twitter. I recommend that you take a deeper dive into their content as well as others to learn more. Make sure to always vet people trying to make financial recommendations or forecasts before trusting their proposals. Always use strong caution and be skeptical.