Crypto Trading 101
Jul 27, 2017 · 2 min read
Disclaimer: I am not a financial advisor and do not play one on TV. Do not invest any money you aren’t comfortable losing.
To get started buying/trading crypto, you need 3 things:
- A fiat exchange where you can buy in with USD (often called “fiat” purchasing amongst crypto nerds — among whom I count myself). Examples are: Coinbase (which is huge but charges high fees for many transactions), GDAX (which is the trading platform of Coinbase — same company), Gemini, and Kraken. Other than Coinbase, these all require you to verify your identity to put in money due to legal restrictions. This takes a few days to a few weeks for them to check your ID.
- A wallet to “store” crypto in when you aren’t trading it. Technically, the currency isn’t actually “in” the wallet; the wallet software is just a graphic UI wrapper for your private keys, which access the account where your currency is stored on each blockchain. There are a ton of these across desktop, mobile, hardware, even on paper (you can just print your hash and hide it, basically).
- An “alt” exchange that lets you trade Bitcoin/Ether for other coins (called “alts”). Kraken can do fiat and some alts. Bittrex has the most alts. Poloniex has quite a few and a ton of trade volume, but I hear bad things about it (horror stories of lost currency).
So here’s what I would do if I were interested in getting started:
- Sign up at Gemini and/or Kraken and put in verification info (you will need to give them photos of your driver’s license or something). They will take a few days to verify you. Kraken doesn’t work in NY, but it looked good cause you can buy in with USD and it has several alts available.
- Set up a wallet. I am using Coinomi on Android for now but will switch to hardware eventually. Any coins you want to just hold and not have on hand to trade should go in your wallet. Exchanges are targets for hackers. Wallets on your computer/phone/whatever are less appealing targets. Hardware (like Trezor and Ledger) is probably the most secure.
- Set up an account at Bittrex for trading alts (if you want).
You can deposit USD at Gemini or Kraken to avoid the Coinbase fee, but you have to wait to be verified. Also, bank transfers take about 4–5 days once they debit your account. I would wait to be verified and avoid the fees, personally.
To get started, I’d recommend just playing around with Coinbase(GDAX), Gemini, and Kraken and just Bitcoin/Ether for a couple weeks to get a feel for the systems. After you have you feet under you, move on to researching and trading alts.
