Cryptocurrency. It isn't just money. It is freedom. It is dismantling the institutions that have held us in place for many centuries and told us how to invest, where to hold our money, how much return we could make, and then skimmed a bunch of that money off the top and allowed us to keep a certain percentage of what we earned with our hard work and wits.
Bitcoin has kicked open a door in our collective consciousness and set up a new paradigm. You are free to walk through it and make a ton of money.
When the 100th monkey kicks in(soon), we will see a systemic disintegration of the debt based dollar collapse and the new house will already be built for us to step into. Cryptocurrency market cap is strong enough and has enough product to support an influx of mainstream adoption. We will all be ambassadors as cryptocurrency is flooded with new users. The wave up will be unlike anything we have seen yet.
There are a couple key points to remember as we go forward:
Never divert more money than you can afford to lose.
Never store funds on exchanges: Coinbase, Gemini, Poloniex, Bittrex, Kraken. We will discuss how to store coins in cold wallets later.
Always backup your funds immediately and keep copies. This means write down your passwords, seed phrases, pass phrases, whatever is suggested by the wallet.
Always, always use a secure password. And 2 factor authentication wherever possible. It is actually better to use a long sentence like: mygrandmothermadeawfulspagehettisauce
Check out this video for an simple understanding on Bitcoin and how Bitcoin spawned blockchain.
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The last thing that you saw in that video was a blockchain that allowed airplanes to communicate with each other. There are many platforms out there now being built on top of Ethereum, one of several blockchains. Ethereum has the ability to support "smart contracts" which are self executing programs that do things like tell airplanes to check their wings. Someday, we will live in a world where washing machines will be able to order their own Tide and have it delivered to the house, on the world computer. Ethereum was one of the first, but now we are seeing that EOS will also be capable of running smart contracts. Maybe we will have more than one world computer.
(That's @boxmining one of my favorite steemit users)
The current cryptocurrency market is the Wild West. You will see it wildly fluctuate once you get involved. It it not for weak hands and it is recommended to avoid attempting to time your trades until you know what you are doing. Just "hodl". As market cap increases with new people entering crypto, the coins will stabilize and will not be as susceptible to fluctuation when a large buyer enters or leaves. As things are now, any coins with a smaller market cap are extremely susceptible to small or large sums of money entering or leaving their market share. Choose something high up in market cap at coinmarketcap.com, like BTC or ETH and hold.
After some research, you will find your own favorites, but in general, here is what I have learned:
Bitcoin has the highest market cap because it has been around the longest. It is the coin where we all enter through fiat currency (US dollar, EU, CY, etc), and has a devoted following). It has a scaling issue that needs to be solved hence the hour long period it takes for the transactions to clear (don't panic the first time you buy it). It is considered a store of value and is like crypto gold.
Ethereum: ETH is more than just crypto money. It is also the blockchain with smart contracts that self-execute and carries within it the foundation of a new world grid. Ethereum is designed by Vitalik Buterin, along with some other cryptography experts and has grand aspirations for it be much more than just money.
There are tokens being created and sold on top of the Ethereum platform (ETH, not ETC, we will cover that later). These tokens are also of great value and are beginning to reflect the various industries being built: Augur is a prediction market, 1st Blood is about gaming, SingularDTV is the first TV/Film blockchain studio, WeTrust gathers mortgage money from private lenders without a broker, HumanIQ hopes to connect people in undeveloped countries that banks reject for being undocumented and hooks them up with crypto money, Matchpool wishes to connect people. You get the picture. This is a new world being built...and you have the opportunity to get in on the ground floor.
Setting up and buying for first time users:
Security is the most important thing. Once someone gets ahold of your coins, that's it. For you old school people, it's like a bearer bond. The ones you kept in a safe. Whoever owns it, owns it. If you lose it, it's gone. So we must avoid that at all costs. You may end up using any or none of the following suggestions:
- I use a completely different email address for my crypto. Create a new one at gmail.
- Always use 2-factor authentication.
- If you really get into this, consider buying a cold storage device (USB device) Trezor, Keepkey or Ledger hardware wallet. They are the most secure.
- VPN's are awesome. They erase your computer address and keep you anonymous in real time.
- Firewall
- Anti-virus
- Don't share in social media what exchanges or wallets you use. Hackers delight in this information.
- Don’t click on coupons or documents inside your email. Especially from inside the device where you store your crypto wallet.
- Lock down your cellphone account. The latest trend is to hijack people's phones by calling the provider with your email address and taking over your phone number…. so change the email address associated with your cellphone account to something long and unguessable like [email protected]
So, first you’ll want to open up an account at an exchange. You can use Google to find an exchange that handles currency in your country. If you are in the USA, your choices are Gemini, Coinbase, Cex, and Bitstamp. Maybe more but those are the ones I know of.
You will need to go to the ID verification page and jump through all the hoops. Once that is done, it will take a where from a few hours to a week to clear. Once you get ID verified, you can make your first purchase. It really does not matter if it is BTC or ETH. You will be making a good investment. If you are super adventurous, take a look at LTC. I would personally buy whichever is in the red that day (on a downward trend).
Go to the Buy/Sell page, choose the currency desired, put the amount of US that you want to spend and the exchange will automatically calculate the price and amount of coin for you. If you have sufficient funds, all you have to do is click the button and the transaction will generate. We will use Coinbase as our example for this article.
If there are insufficient funds, Coinbase will tell you what has to happen to make it go through. The exchange will hold your coin in the exchange wallet until your US dollars clear. This can be up to a week and they will email you when it happens.
You will receive a request for 2-factor authentication from the 2f app, if you enabled 2-fa (highly recommend this).
There are many tokens being created that are built on the ETH platform. This is one of the reasons it is good to buy ETH. Some people are buying the less expensive ETC which is the old form of Ethereum prior to a hard fork that occurred in 2016. I personally invest in ETH. There is a world of difference between the two. I hold ETH because I believe that the tokens being built on it will yield a better future for the companies developing on top of it. If you are curious about the difference between the two, there is a lot of information out there regarding what happened during the hard fork in 2016.
Once you buy coins at the exchange, you will need a wallet. The easiest is Jaxx. It's at the App Store for your phone. Just download it and follow the instructions. I will lead you through some screenshots. Be advised: YOU CANNOT DELETE JAXX FROM YOUR PHONE without backing up your seed phrase. We will get to that in a minute.
(Note: Jaxx had been having some security issues so to store large amounts, I would recommend Exodus for the laptop or myetherwallet for Ethereum. If you are just getting started, Jaxx should be fine for now)
After you install Jaxx, first you will see a lot of choices.. Go ahead and select them all.
Then you will come to the next screen.
It has some tips, but don’t worry about those.
Basically, you want to focus on the BTC screen. This is your Bitcoin wallet address. If you bought ETH, you would change to that wallet by touching the ETH symbol at the top.
You can copy your address to the clipboard by touching the clipboard icon just below that blue fox head. You can initiate receiving BTC from your Coinbase exchange wallet by touching the receive arrow. It will open a new screen.
You can send bitcoin to your Coinbase exchange wallet or another wallet by touching the send arrow. You will eventually send and receive to any wallet you wish, but for now, we will just focus on Coinbase.
The little fox head in the middle is shapeshift.io That is a cryptocurrency exchange where you may exchange your cyrptocurrency for a wide array of other coins. There are approximately 1000 coins on the market at this point. You read that correctly. Not all of them are easily accessible, but that is how big this market is now.
Don’t be afraid to touch anything on this screen. It will not send or do anything without you verifying first. Let’s keep going.
The image in the middle is called a QR. It is easily scanned by a phone and is a way to make a transaction happen without any errors. That QR is your address. If someone wanted your address, they could just scan your wallet screen. Don’t worry, your address is secure. It’s okay for someone to scan it. It is only your recovery phrase that needs to be kept locked down. And anything that is called a PRIVATE key should also be kept locked down.
Let’s take a minute to talk about what is inside the tools menu. It is super important to save some stuff in there. Do a backup, save your keys somewhere, save your backup somewhere, if you do save any screen shots on your phone (they are easily intercepted on a network and hacked), make sure they are stored inside a password manager accessible only by you.
If you do have a password manager (like LastPass), this is a more secure place to save these things but definitely have a secure password and don’t lose it or forget it. Use a 30 digit password for that password manager and then use a different password for every single website you use. The amount of identity theft out there is astounding and all of us have personal passwords and emails floating around from those major hacks (think about the sheer volume of the Home Depot and Target cyberattacks).
Jaxx recommends making a backup of the wallet and also storing the 12 word seed phrase. Either one will restore your wallet and your coins. DO THIS IMMEDIATELY. I cannot emphasize this enough. The seed phrase IS your bank account to your crypto.
Once your US dollars clear in the exchange, it is time to move them out of the exchange wallet and into your Jaxx wallet. Remember, as long as they are in an exchange, the coins are not really yours…something could happen to them (exchanges fail and remember, one just got seized by the FBI).
Have your Jaxx wallet open in your phone and make sure that you are in the same wallet in both (if you bought BTC, make sure that you have BTC open in both. If you are in ETH, have ETH open in both).
Once you are at the exchange, go to the send/request page. Paste your Jaxx hexadecimal address into the recipient field (remember, you touch the clipboard icon to copy the address. Make sure you are in the correct wallet: BTC for BTC) Type in the amount you wish to send. If it’s your first time, send just a tiny amount to test it. Don’t worry about the fee. It’s a test run :)
Then hit send. You may have to enter a password, a 2FA number or confirm through an email. If the network is congested, it may take a little while.. This is because of scaling issues. If you are anxious, you can click on the hash transaction and watch the confirmations roll in on the blockchain ledger. That can be kind of fun if you’re a geek like me.
If you are on a laptop, Exodus is awesome wallet as well. Try that one, too.
Now that you have a wallet and you have an exchange to change out your dollars, you should go check out shapeshift.io. This is a place where you can exchange for other crypto. Just make sure you have a wallet to keep it before you buy it. Some wallets can be downloaded on a computer, some require that you download their entire blockchain so watch for that…it can take a lot of space and hashpower. Also, some don’t really have wallets yet. Some have browser wallets, which are fine, but make sure that you use the right browser that they are requiring. Always make sure you are using the correct website and not a phishing site.
Coinmarketcap.com is a great website where you can track the value of your coins. And if you would rather have an app to track your own portfolio, check out Blockfolio. It will update the prices, but you need to update your own buy/sell’s. Check out Bittrex.
Later on, if you decide that you really like Ethereum and want to get into tokens, you will need myetherwallet.com That will be part two.
If you get interested in mining, genesis-mining allows you to mine without setting up the equipment yourself. There are articles on steemit that explain how it works so you don't waste your money:
MERCATOX Cryptocurrency and E-Currency Exchange
Woaw is much more than a simple introduction !
Your explanation is perfect for both the novice and the initiated.
It is both very understandable and yet so complete.
Excellent synthesis work, writing and a huge thank you for sharing.
[Your advices are also really wise]
Hey, thanks!
Thank you for sharing your knowledge. I am still reading about cryptocurrencies, one of the reasons why I am on Steemit. I am not to the point of getting involved. I know I need someone else physically around me to guide me through, at this point. Maybe with more reading, I can do it alone.
8 ) infinity happiness
Welcome! You are still early in this world and there are a lot of us here to assist you. Steemit is a great place :) I will add you.
We are following each other. Your user name is the name of your first motor bike.
I forgot!!
Quite a write up!