Beginner’s guide to Ethereum / Bitcoin / Crypto speculation
I call it speculation because people who are buying and selling crypto are not investing in the underlying companies, they are purchasing what is probably best defined as a pre-paid credit for services, whose value can fluctuate.
My background: I am an investor in Brave (BAT) and Ripple (XRP), two of the most successful ICO’s this year as well as having decided to invest 100% of my token in Ethereum (with the exception of some upcoming ICO’s: Civic, Filecoin and Tezos)
That said if you want to learn , buying and speculating a little to understand what is happening makes a lot of sense— here’s the primer based on my actual experience as I came up to speed.
Buy and coin and learn how to transfer it to someone
- Open an account at Coinbase that lets you purchase Bitcoin (BTC), Ethereum (ETH) and Litecoin (LTC).
- Go through KYC (know your customer). This can take a while, as can getting your bank account listed. People who are in a rush or are doing very small dollar amounts (~$500) may be better off just buying by credit card and paying 4%. ACH and wire transfers can take days to deposit.
- Buy a little BTC, ETH, LTC
- Find your wallet https://www.coinbase.com/addresses
- Find a friend who has a wallet, and try sending them $1. It’s harder than I thought to find their wallet address!
- Go to etherscan.io and find your transaction in the public ledger
- Ask your friend to send it back.
- See the transaction history in your wallet at https://www.coinbase.com/transfers
- Freak out when it sometimes takes a few minutes to process.
Many people suggest building a portfolio of coins. 40% Eth, 40% BTC, 20% LTC for example. A year ago Eth was “speculative”, now it is closing in on being the dominant platform. If you want to get more aggressive, start researching even smaller coins and take 5–10% of your portfolio and allocate it to the most risky ones. You can see more currencies here: https://coinmarketcap.com/ . Or even more speculatively to ICO’s. Of which my favorite upcoming ones are Civic, Filecoin and Tezos
To trade these coins you end up needing to open accounts on other exchanges. This requires even more research!
- Kraken for example lets you trade Bitcoin(XBT), Ethereum (ETH), Monero (XMR), Dash (DASH), Litecoin (LTC), Ripple (XRP), Stellar/Lumens (XLM), Ethereum Classic (ETC), Augur REP tokens (REP), ICONOMI (ICN), Melon (MLN), Zcash (ZEC), Dogecoin (XDG), Tether (USDT), and Gnosis (GNO)
- Poloniex lets you trade dozens of coins.
Getting money out:
Most exchanges have money limits, so before you start trading, open an account and learn about the limits so you don’t get money stuck in one exchange and end up waiting days or weeks to get it out.
Crypto today is a libertarian paradise. If you send your money to the wrong place, it’s gone. If you send it to a merchant and don’t receive the goods, you have no recourse. This is CASH. Treat it as such.
As a result I started doing the following things
- Any large amount of crypto I have is moved to a hardware device offline
- I redid all my passwords on these sites after realizing this is cash, to have impossible to guess passwords (very long, lots of weird characters, etc)
- I reinstalled my OS on my laptop to make sure there wasn’t any malware and have stopped clicking on ANY ads or third party links in email
- After a while, I realized the iPhone was safer and try to only trade via apps that are harder for malware to reach
- I keep copies of my passwords printed on a sheet of paper in my safety deposit box