Cryptocurrencies hit the big time in 2017. The value of one bitcoin, the oldest and largest of what was a rapidly diversifying market, had skyrocketed from $900 on January 1 to almost $20,000 on December 31. Ethereum’s ether, the second-largest cryptocurrency, rose even more sharply, gaining a staggering 10,000 percent over the course of the year, creating somewhere between 20,000 and 200,000 newly minted millionaires.
That’s why, in January 2018 — both for journalistic purposes and out of fear of missing out on the fabulous sums of money to be made — I got out my debit card and sat at the computer, ready to seek my fortune trading cryptocurrency.
It was immediately quite a bit more difficult than I was expecting. There were an overwhelming number of options to trade cryptocurrencies, and they proliferated rapidly as prices rocketed during 2017. The barriers for entry to a lot of these markets were high because of the technical complexity of cryptocurrencies and the need for solid general computer literacy.
There are several tiers of cryptocurrency investing. Most exchanges that take the fiat currencies of dollars or sterling will only exchange them for the larger cryptocurrencies, like bitcoin and ether. To access the more febrile world of the smaller, more niche cryptocurrencies, you have to buy bitcoin from one of the larger exchanges, such as Coinbase, and then transfer it to another exchange.
The infrastructure around cryptocurrencies is groaning under the weight of new users, even after the price has slumped from its high at the end of 2017. After reading some reviews, I decided to start by signing up with a Canadian exchange called Kraken, but when I did, the site was slapped with bar at the top reading, “The service is under heavy load and performance is degraded. Upgrades coming soon.”
I immediately forgot what username I had used to sign up, so I clicked “forgot my email” and requested a reminder. The site crashed. I reloaded it. My reminder email stubbornly failed to arrive. Eventually, I managed to retrieve my password but was brought up short: Before I can trade cryptocurrency, I must first verify my account, but the feature is disabled. Not a great start.
I tried several other exchanges before lighting on the largest, Coinbase, headquartered in San Francisco. Setting up an account on the site is relatively easy, but as with most sites, you have to verify your identity by uploading a picture of your identification. Once that’s done, you’re able to buy bitcoin. Using a debit card, new users are limited to a maximum purchase of $200 per week, which at the going market price of more than $12,000 bought me a tiny fraction of a single bitcoin.