Buying and storing your first cryptocurrency
A cheap way to buy crypto with FIAT (Euro, $, …) is via a SEPA transfer to the Kraken exchange (If located in Europe). There is a technical cooperation between Kraken and the Fidor Bank in Munich. Kraken has set up a cooperation with the Fidor Bank, which makes the buying and selling of cryptocurrencies for Euros very fast. You can also transfer euros very fast and transfer them back to your bank account in Belgium and the Netherlands. You do not pay any costs to transfer FIAT and we at Krypt.ly, have never had any problems with the transfer and instalments. You must follow these steps to create an account, make verification and purchase your first cryptocurrency. In a future article, we will further discuss Kraken and other exchanges.
In this tutorial we will buy ETH, besides ETH there are 18 other currencies for sale including BTC, XRP, ADA, etc …
1. First, we will create an account on www.kraken.com. Once you have registered yourself, you will receive an e-mail with an activation link. Click on the link and your account will be activated.
2) You must verify yourself. This is the effort of the exchange to prevent money laundering. Go to ‘Get verified’. You need a “Tier 2” account to deposit Fiat currencies (Euros, Dollars, Yen’s, etc.). At the bottom of the page, you will find a simple step-by-step explanation of how to complete all the requirements. Depending on the level of verification you are looking for, you can be immediately verified or it can take a few days (for level 3 or higher).
3) Go to Funding and click on the desired currency to deposit. In this tutorial, we go for Euros. Choose your deposit method. If you live in Europe, SEPA is the best method. Kraken will show to which bank account you have to deposit, and which information must be entered. Be aware that a deposit or collection must always go to an account that is in your own name. Make sure you add the reference so that Kraken knows that it has to deposit to your account. The deposit usually takes 1 to 3 business days.
4) Now it’s time to purchase your ETH. Click on ‘Trading’ and choose the desired method to purchase ETH from the currency list. Since we financed our account with Euros (EUR), we have to choose ETH / EUR to purchase ETH.
5) After selecting ETH / EUR, enter how much Ether you want to buy. Note that Kraken will immediately show you how much your purchase will cost in EUR. In our example, we buy 1 Ether, which is 559.52 EUR in this example.
Note: The easiest way to buy Ether is to make a market order. A market order is the quickest and easiest way to buy or sell. However, this does not guarantee the best price. If you want to know the exact price you pay, you can do a limit order. This means that if a trader agrees with the price you offer, they will execute your limit order. But it is up to you to find out what you want to pay for the ETH you buy.
6) Before you make a purchase, you have a chance to view your order. It is crucial that you inform yourself about what a fair price is for Ether, which may depend on the exchange you use.
If you are satisfied with your order, click on ‘Submit order’ and wait for the transaction to take place.
If your order is executed (closed), you have successfully purchased your ETH. If you then want to send your ETH to a private wallet, click on ‘funding’, ‘withdraw’ and designate currency ETH. Then enter the receiving address and send ETH. Further information about the private wallet can be found in the following paragraphs.
The cryptocurrency that we have purchased [let us now continue with ETH, but this can also be BTC], we can now secure a long-term investment in a wallet where you have the key code. The safest are hardware wallets such as the Ledger Nano S, these costs around 100EUR but are a top investment (https://www.ledger.com/). An extensive tutorial on hardware wallets such as the Nano ledger and Trezor will be shared in our community in the near future. You can of course also find online wallets with a private key, so you have your own coins at your disposal instead of an exchange where there is always a risk since you never own your own currency, the private keys are not in your own possession. In the near future, we will also share content about multiple private wallets on our community.
For Ether, and all other ERC-20 tokens, we definitely recommend https://www.myetherwallet.com/ (MEW). Be sure that you are on the right website !!! We recommend to check the URL carefully and see if the certificate is present. When you are sure that you are on the correct website, you should set a bookmark so that in the future you just have to click your bookmark to get to the right website.
MEW works with various private key formats from which you can choose from. These are different ways to access your private wallet. The ETH (or other ERC-20 tokens) is stored on the blockchain, your private key or Keystore file proves that you are the owner of the relevant ETH so that you can go on your wallet and move the funds. All transactions are signed through your private key.
For additional functionality (such as protection with a password), there are layouts and ways to store your private key on MEW:
MetaMask: https://kb.myetherwallet.com/migration/moving-from-private-key-to-metamask.html
Ledger or TREZOR or Digital Bitbox hardware packages: See future content about Ledger and Trezor
Keystore file (UTC / JSON): This is encrypted by the password you have chosen. This is the recommended version to save when you do not have hardware wallets. This Keystore file corresponds to the format used by Mist, so you can easily import it in the future. Make sure you have multiple backups. We recommend that you save this file on 1 or more USB sticks and only plug them in when you need the file effectively, to prevent hacking.
Mnemonic Phrases
Usually, these are available in 12 words or in 24 words. They can derive multiple addresses — meaning your sentence is actually able to create multiple accounts, addresses and private keys. Ledger, TREZOR, MetaMask and Jaxx provide this for you.
Private Key (unencrypted)
This is the unencrypted text version of your private key, which means no password is required. If someone found your unencrypted private key, he could have access to your wallet without a password. For this reason, coded versions are recommended. However, you must print or store the paper wallet in an offline environment (such as a piece of paper or a USB drive). This ensures that a lost password does not result in lost ETH and acts as another backup.
Parity phrase and JSON file (unencrypted) are two other outdated ways, but due to their poor security, we will not explain these methods.
If you decide to purchase another crypto, and the content of the private wallet is not yet available on the community, be sure to check with comments under this article on our community. As with NEO, for example, you have an advantage when NEO is kept in the official wallet of www.neo.org, since you can then claim GAS for free with its own value because they work with POS [we will come back to this later]. We will place content as quickly as possible regarding good private wallets of the larger cryptocurrencies.
If you decide to trade, you have to return the crypto from your wallet to an exchange [note, you always pay a small fee to do this].
More information about various centralized exchanges and decentralized exchanges will be shared in the FB community https://www.facebook.com/groups/kryptly.malta/ and on Medium in the near future.
