So you're interested in Bitcoin and cryptocurrencies but have heard horror stories of what could go wrong. Most of these stories are true and can be avoided pretty easily when you know how, which I explain here.
I think it’s important first to know what Bitcoin and cryptocurrencies are all about first. Although we don’t know the identity of Satoshi Nakamoto, who first created Bitcoin, we know he (or they) created Bitcoin to challenge the existing financial system. You can read a little more on that here.
So by getting into Bitcoin and cryptocurrencies, you are helping to make banks irrelevant in the future. Especially central banks and the debt based money they use to extract value we create to the already rich and powerful.
Crypto is just at the very beginning of what will come out of this technology other than currencies. We’re taking out the middleman with distributed ledger technology and smart contracts. A fairer world is very possible as this technology evolves.
For the foreseeable future Bitcoin is king. I hold Bitcoin and only trade in alt coins (coins other than Bitcoin) to get more Bitcoin. There is something to be said for holding Litecoin (LTC) and possibly Ethereum (ETH) long term. In saying that, there’s a very real possibility that Ethereum will be blown out of the water with emerging technology.
You’ll hear all sorts of people, saying some other coin is the new Bitcoin. Don’t believe them. All the best crypto developers are working on Bitcoin and the fact that everyone knows Bitcoin, means it isn’t going away anytime soon.
Before doing absolutely anything, you need to start thinking about security. You don’t want to be that person at the bbq who used to have all this crypto and lost it or got it stolen. There are so many stories of this going very bad for people and you will hear a lot more of these stories in the future.
Signup for a Password manager like LastPass. Don’t use a password on LastPass, use a passphrase. Something long, with numbers and extended characters, that only means something to you. Here is some more info on passphrases.
Always use 2 Factor Authentication (2FA) on both LastPass and every crypto service you use. The Google Authenticator option on LastPass is probably your best bet and can be setup in the LastPass settings page.
When you use LastPass, then the passwords for the crypto services you sign up for can be 20+ characters long and look something like:
That is what your passwords need to look like. Don’t ever get lazy with this stuff.
First step in purchasing is to buy Bitcoin.
In Australia, the services I have used and recommend are:
In the USA, I am currently recommending:
Most often the cheapest place to buy is the European exchange, Bitstamp
Bitstamp can sometimes be thousands of dollars a Bitcoin cheaper than other exchanges. It does require an international swift transfer if you are outside of Europe, which can take 2-6 days and then they have to process it on the other end and because of the volume at Bitstamp that can take extra time as well.
Once you have your Bitcoin, you should transfer it to a wallet. Over the years many exchanges have been hacked or failed for a myriad of reasons. So this is why you need to store your crypto in a wallet. I’ve lost coins from exchanges going down in the past and always exposed with my trading capital being on exchanges. But need the capital in the exchanges for alt trading. The more I make in alt trading the more I put away in wallets. Exchanges will continue to go down. No matter how awesome you think your exchange is, you’re exposed when you keep your coins in an exchange.
For starters I recommend the Exodus wallet, which you can download from their Website
Once you start getting more crypto, then you should use a hardware wallet like Trezor or the Ledger Nano. Make sure you purchase your hardware wallet from a trusted source. ie. directly off their Website or a trusted retailer. There are already examples of people selling off sites like Ebay who have hacked the wallet to send the crypto to them.
Your private keys need to be held in the most secure way possible. Your private keys are the way to rebuild your wallet if your computer or device is stolen or destroyed. So many stories of people not caring for their private keys properly and losing all their coins. I won’t even allude to how I keep mine secure, it’s so important. But all I can say is don’t pin them on your fridge or around your house.
After you have your first coins then it’s up to you if you just hold or try and trade in alts to get more Bitcoin. Safest step is to just hold in your wallet and wait until Bitcoin goes to $100,000 plus. I trade a lot, with the hope I never have to buy Bitcoin again and just keep on getting more. Doing this is very time consuming and you spend a lot of time on a computer. If you’re not up for that then just hold your crypto. But in saying that, there are massive opportunities that exist right now for traders.
If you want to try trading altcoins to get more crypto, this is the best article I have seen for doing it. Even after doing a lot of trading, there was still a lot I learned from this article.
Yes, it’s complex and yes it’s risky, but the financial rewards are huge. 100% increases in not very long time frame are pretty normal in alt trading.
A few of the altcoin exchanges I’ve used are:
I’m most excited about an emerging technology called Holochain. As it evolves and as more people find out about it, I believe it has the potential to make Ethereum a thing of the past.
Once you watch the vid, please feel free to ask questions in the comments below. It's a good idea to keep an eye not only what is happening in crypto, but where it is going.
The future looks bright and the good news is that is accessible to everybody. Have fun and looking forward to good stories at the bbqs in the future and not the horror stories, which can be avoided when you don’t get lazy on the things I mentioned above.