Preamble
The below (and subsequent chapters) is a guide to getting started in Cryptocurrency. It is a condensed journey of my 4 years in this space. It avoids the pitfalls (hopefully) I have made and (I feel) is a sound strategy for buying, holding and trading cryptocurrencies. It is not the only method for doing so and I implore you to "Trust but verify" the information contained in this guide.
Part 1: Getting started
Prerequisites
Below I have listed the 2 main prereqs for being able to hold ANY cryptocurrency your mindset and your choice of wallet. I have seen more money lost from those 2 being incorrectly implemented than any other case.
1) Mindset
Buying a cryptocurrency is a very high-risk adventure, it will test you mentally and as a result, it is really important to never be playing with "Scared Money" do not buy any cryptocurrency with any money you cannot afford to lose. Let me say it more succinctly "DO NOT BE THIS GUY"
Think long term, that does not mean it is wrong to take a profit. do so as your strategy dictates but do not panic sell everything on a 50% drop of BTC and buy back in on FOMO (fear of missing out) at whatever high the market happens to be at. Be steadfast (but adaptable) that your strategy is working and do not waver. To quote the Stoics
"But neither a bull nor a noble-spirited man comes to be what he is all at once; he must undertake hard winter training, and prepare himself, and not propel himself rashly into what is not appropriate to him"
– Epictetus
2) Wallets
There are numerous wallet choices out there and as you move deeper into cryptocurrencies you will find yourself juggling multiple wallets for the various coins that you chose to hold. For now, let's keep this simple and secure and give you 2 choices, a hardware and a software variant. For the record, I am a huge proponent of hardware wallets and use this as much as possible. In fact, I will not hold a significant amount of cryptocurrency in a software wallet, that means if the cryptocurrency does not have hardware wallet integration then I will only be a short-term holder of it. The hardware and software wallets I have listed below are my favourites and the ones I use , as I have said repeatedly in this guide do your research, if you find something works better for you then please use that.
Hardware Wallet
My favourite hardware wallet is from a company called Ledger
Software Wallet
Greenaddress is my favourite software wallet, it is fast secure and is maintained by a bitcoin core dev.
Advanced wallet topics
Most of the advanced wallet topics are out of scope for this guide, arguably the most important one (in my opinion) is to do with air gapping. If this interests you can read about it more here
Buying and Managing your Cryptocurrencies
1) Exchanges
Exchanges could fill a book on their own, this is a beginners guide so we will go ahead and cover the basics. I suggest your first exchange should be Coinbase. Most people who have been in the cryptocurrency scene for a while mock this idea and scream foul of Coinbase. No Segwit support, no control of private keys etc and they are absolutely correct but Coinbase also has a lot going for them, some points listed below:
1) You can purchase easily with a debit card
2) The chances of an exit scam are very low as they are well funded VC backed start-up.
3) Very user-friendly UX.
4) Most people do not know about or how to implement good operations security and until they learn this is a good place to have your coins.
I do however recommend not leaving your coins on Coinbase (taking point 4 above into consideration) move them directly to your wallet and take control of coins. You are your own bank now
Advanced Exchanges Topics
There is A LOT to discuss with exchanges centralised vs decentralised vs no exchange at all (atomic swaps) and altcoin exchanges (to name just a few) that I will cover in more detail in part 2 of this guide. If you would like a little homework into this area then please go ahead check out of some the exchanges I use frequently:
2) Tracking
The last thing you want to do is track your investment portfolio. The tools I use for this as listed below.
Blockfolio
This is an excellent resource to track your investments. Again there are many applications like this but I like and I use this one and that is why it is on the list. Feel free to look around and adopt the one you like best if this does rock your world.
Coin Market Cap
This site tracked the aggregated price for all coins. It's the nuts
Crypto Watch
This site lets you watch the charts and interact with them looking for this buy and sell opportunities
Trading View
Tradingview is a lot like Cryptowatch except you can look at other peoples analysis of the charts, it is pretty cool and you can learn from people much better than this than you or I are every likely to be.
Conclusion
That covers the basics of getting up and running on cryptocurrencies, next time I will dive into altcoins and lay out my investment strategies and what I look for before I buy any cryptocurrency
Disclaimer
There are a number of links in this document that link out to third-party companies . I have used affiliate links for some of these (listed below) sometimes we both make something off off the referral sometimes only I do. This is a way for me to make a small additional revenue from the words I have written. If you do not feel happy with this just simply remove the referral code, I will not be mad.
- Ledger (I make a % percentage of any sale)
- Coinbase (we both make $10)