Totally New to Cryptocurrencies? Here Are The Top 5 Things You Should Do.
Since the rate of newbies coming into the cryptosphere is at a historical high on my side, I've taken some time to write this so I won't have to repeat myself over and over again. That said, I've never once tried to charge my friends anything even after spending hours walking them through some tutorials and analysis of the technology. Some say that I should start doing so.. but for now I would like to keep it that way. The beauty of blockchain technology is that it reduces our need for a trusted third party to a minimum and represents the first time that we can truly begin to own records of our identity and asset. So in my opinion, it's best to understand the technology, and subsequently, do-it-yourself.
1. Learn to do-it-yourself
I know there are plenty of cryptocurrency-related service providers that take hold of your funds, mining rigs, and sometimes, passwords. As usual, try to avoid such things especially in an unregulated market. It's all too easy to get scammed. Plus, consider there's a single point-of-failure in these setups. Blockchain technology is here to minimise our dependency on any middleman, providing us with the best security if we take the steps to be responsible over our assets. Unless absolutely necessary and unless you're willing to bear some risks for the sake of convenience, try to AVOID the following:-
Mining services. Most of the times, I'm pretty sure folks providing such services are trustworthy. But again, you'll never know what can happen placing trust in somebody else for the long-term. Money has the ability to cause people to make bad short-term decisions more often that we can admit anyway. So avoid getting someone else to handle and house your mining rigs. I'd more likely to trust if a close friend doing it instead of someone on social media trying to sell me the service. Regardless, it's best to learn and do-it-yourself.
Centralised exchanges like Coinbase, Bittrex, Bitfinex, etc. I still use these exchanges every once in a while, but only for quick trades and in small amounts. Why avoid this? Access to your funds can easily be compromised by hackers and interventionists. I've not experienced any hack on exchanges before and I intend to stay away from being involved in such a possibility.
Third party wallets. If you don't hold the private key to your cryptocurrency wallets, you don't really own your coin. The good thing about third party wallets is that you're able to retrieve your password if you forgot or misplaced it. The bad thing about it is well, everything else. It's not very safe to hand someone else keys to your house is it?
2. Use these wallets
Here I'm going to present what I think are easy-to-use, secure, and important wallets for Bitcoin, Ethereum, and Steem. Everyone will have a different recommendation to this, but I prefer web-interfaces to wallets for beginners so here's my suggestion:-
Use https://blockchain.info for Bitcoin. It's easy to use and get into right away before finding your favourite Bitcoin wallet. I don't like installing executable files for wallets so I think the wallet on blockchain.info is a happy medium for usability and security. Just sign up, do a bit of reading, and follow the security steps. Be sure to backup your private key / phrase. Try completing level 1 and level 2 measures shown in the security center.
Use https://myetherwallet.com/ for Ethereum. Same reasoning as my Bitcoin wallet recommendation. As usual, follow the steps too and backup your private key. There are plenty of coins in the market that are Ethereum based so this wallet is pretty handy if you're into acquiring the many different kinds of tokens out there. Do your research if such coins are compatible though. For myetherwallet, click on the eye icon on your wallet once you've created it. Enter your password, and download the keystore file (private keys) and print paper wallet. Keep them safe.
Use https://steemit.com for the Steem cryptocurrency. There are many more ways to get a Steem account, but the reason why I recommend https://steemit.com is that it provides you with a Steem wallet and social platform to earn cryptocurrency as well. Steem's permissions key system is a little bit more sophisticated but worth it - read it here. Also, shifting part of your social feed to Steemit might be a good move as it has plenty of people talking about cryptos, unlike other places at the moment. Just check it out ;)
Be sure to double check if you can access your wallets before sending any funds to them. Feel free to explore other kinds of wallets once you're starting to feel comfortable and looking for better measures like hardware and paper wallets. There are plenty of other different wallets for other kinds of cryptocurrencies out there besides Bitcoin, Ethereum, and Steem, but I've kept it short here for the sake of brevity to providing you the best exposure to the market. As always, do your research on wallet compatibility and all. Most importantly, be the one that owns the private keys to your wallets!
3. Use 2-Factor Authentication in everything.
To secure your online accounts especially for email services and cryptocurrency exchanges, enable 2-Factor Authentication in the settings. Usually it'll prompt you to use the Google Authenticator app. Speaking from experience, you should use Authy instead. Yes, it can be used in place of Google Authenticator, and it works way better since it backs up your seed keys.
4. Use a password manager.
It's best to use different and complex passwords for all of your online accounts. It's the best way to secure yourself and isolate any account breaches. For that, use any one of these password managers here to store and fill-up your passwords easily. But of course, you'd have to be careful to secure your main password of passwords at all costs, although your account will most likely be safe anyway if you have 2-Factor Authentication activated for all of your online accounts. On a side note, it's best to avoid using your mobile phone for anything related to such sensitive passwords, and clear your clipboard as soon as possible if you happen to be doing the copy and paste thing for your passwords.
5. Learn to use Coinmarketcap
So you have some Bitcoin, Ether, and perhaps some Steem sometime soon from the exchanges in point #1, and want to explore the rest of the coins. Coinmarketcap, is in my opinion the best way to do that. Every coin can be clicked on and there will be links to relevant materials, including the markets the coin is traded on and its social feeds. Of course, do your own research properly when looking into these things. Don't take everything you read on the Internet to be true. Personally, I make it a point to study at least one coin per week.
The most important metric for comparison is probably market capitalisation, or network value. This is the thing people talk about when they're saying Facebook is worth $500 Billion. Same applies to the cryptocurrencies (or decentralised organisations or quite simply, communities). Other important information is circulating supply, and total supply. Cryptocurrencies are great because the supply is known and transparent, unlike traditional resources like gold, in which total supply is an unknown, and hence a difficult way to determine the level of scarcity and subsequently, value.
I've compiled a list of Youtube videos in a playlist for cryptocurrency newbies. Might be outdated and all, but this is a list that I'll try to update and expand from time to time. Check it out here: https://www.youtube.com/playlist?list=PLlYj20krCrV3QtDhfIrflxdu9we86ehNU
For those of you that are scratching your heads over my emphasis on private keys and all, it's okay to rely on the likes of Coinbase for convenience until you've taken the time to understand the importance of securing your own passwords without a third party that might compromise your funds. In any case, it's a give and take with trusted third parties and it'll be up to your own taste in security and risk-appetite.
Anyway, I'm going to start funnelling my contacts that are interested in experiencing cryptocurrencies into this post, hence this little beginner's guide for total newbies. I might refine it over time, but so far this seems to be working well 90% of the time, at least in-person. I've also purposefully avoided pictures and lengthy explanations to encourage readers to check out the applications and websites I've mentioned. Go through their instructions and suggestions with care. For those that are not new in the space, what do you think are the best ways to get someone new into understanding the game and doing it for themselves?