Purpose
I got in the crypto game in late 2016. Immediately I became obsessed, imploring all my friends to buy bitcoin and ethereum. Whenever I mentioned it at social gatherings and work lunches, I was met with blank stares immediately followed by the feeling of everyone in the room collectively shifting away from me in unison. Clearly I was a crazy person to be so taken with a system not backed by a trusted government system. If I did get a response back it was always the classic "Don't you know how volatile it is?" or "It's a scam. Don't you know you are getting scammed?" or even "Maybe, but I'm too late to the party".
Fall of 2017 this all started to change, however. Suddenly the people who scoffed at the idea before contacted me desperately asking how to buy bitcoin right that very second. So many people came to me asking how to start with crypto that I found myself sending the same email over and over and I eventually made a powerpoint explaining the basics. That felt so old fashioned and clunky though, so in the spirit of decentralization I have decided to take that information and create my first steemit post on how to simply get started with cryptocurrencies.
This is not meant to be a technical article, just information for those wanting to get their toes wet.
Disclaimer
This is not to be taken as financial advice. This document contains my personal thoughts and opinions and every reader should do their own research.
The crypto market is extremely volatile and could plummet to nothing at any moment. The value of each cryptocurrency is completely dependent on what people are willing to pay for it making it extremely risky, but a lot of fun.
My Favorite Bitcoin Meme
Brief Bitcoin Intro
What is Bitcoin?
Bitcoin is a decentralized ledger.
Ok, but really, what is it?
A work acquaintance postulated that the definition of Bitcoin (and many cryptocurrencies) will vary depending on who you ask.
Purists want Bitcoin to redefine how the world views and uses money.
Consumers and vendors want Bitcoin to be a storage of wealth.
Investors want Bitcoin to be volatile so they can trade it like stocks.
Software developers want Bitcoin to be a scalable development platform.
Libertarians want Bitcoin to be a private currency free from government intervention.
While this obviously not meant to be a technical explanation, it is one I really tend to gravitate towards when answering this question. There is a lot of truth to this answer because there are so many people coming from all walks of life that are joining the crypto community that I am not sure there is a "one size fits all definition".
Why do mainstream economists hate Bitcoin?
Because the wrong people got rich.
Yes, this can be considered an over statement but it does carry a lot of truth. There are plenty of pitfalls when it comes to Bitcoin that must be overcome to achieve mass adoptability. However, I think the animosity felt about Bitcoin from the mainstream insiders steams from bitter regret that they sat on the sidelines while techies, rebels, cyber punks and the like made enormous gains.
This sort of fear-mongering that surrounds Bitcoin was not felt during the dotcom boom in the 1990s or the housing market boom in the early mid 2000s. The difference is that those booms made the status quo rich, while the Bitcoin boom did not.
Risks and Rules
Understand the risks
You will experience massive gains and massive losses.
The moment you decide to pull the trigger and buy a coin, be prepared for it to plummet. For this reason, never gamble with more money than you can afford to lose.
Do your research before you buy. Believe in the technology and backing of the coin you decide to purchase.
Once you buy, resist the temptation to constantly check the price. Don't be a Bitcoin Zombie.
And of course, buy low sell high. But know you will never buy or sell at the perfect moment and be ok with that. Take the emotion out of the transaction.
Rule 1
If you do not own your private keys, you do not own your crypto.
Everyone transaction has a wallet address (a public key similar to the concept of an email address where the coins are sent) and a private key (a private string associated with the public key that allows the owner to access the coins). I will put up another post in the near future on public and private keys and wallets.
Exchanges and many wallets do not give you access to your private key. This means that while your account balance does reflect what you have purchased, you do not truly have full control over your coins.
If the exchange or wallet goes down for any reason, there is nothing stopping that platform from keeping all of your coins. You can lose everything. There will be no recourse you can take.
This has in fact happened before. In 2016, Bitfinex went insolvent after a hack stole 36% (~$72 million at the time) of their users coins. Bitfinex confiscated the remaining user funds so they could keep the exchange open. They gave people what essentially amounted to IOUs once Bitfinex could recover. Bitfinex actually fufilled their IOUs but they technically did not have to.
Recently, the Mercatox exchange shut down their RaiBlocks (XRB) wallets for maintence. For several days no one could access their XRB and could only trust that Mercatox would restore the service once again or sell their coins for bitcoin at a much lower than market value price.
Additionally, another exchange called BitGrail has taken hostage many user's XRB recently and are forcing users to get verified before allowing them to transfer out their coins. BitGrail then proceeds to drags their feet on completing the verification process for weeks and sometimes months. Leaving many people in an anguished limbo.
Rule 2
If you lose your private key, you lose your coins.
With great power comes great responsibility. You and you alone are responsible for the protection and preservation of your private keys.
If you lose your private key you will not be able to recover your coins. There will be no recourse you can take.
If someone gains access to your private key and steals your coins, you will not be able to be reimbursed for your coins. There will be no recourse you can take.
Rule 3
There are no do-overs when sending funds.
If you are careless and send a coin to the wrong address or send a coin to a wallet that does not accept that coin, you will lose your coins. There is no one you can call to help you. Your coins are not backed by anything. You cannot stop the transaction. There is no one, or exchange, or wallet able to refund what you have lost. There will be no recourse you can take.
Taking the Plunge
Now, finally here is what you need to know to actually buy your first crypto.
Coinbase: Where everyone starts
Coinbase has high fees but you pay for ease of use. You get the coin immediately and can use a credit card to purchase (which results in a higher fee than using a checking account). Also it is important to note that Visa and Chase are not treating Coinbase purchases like cash advances and are charging additionally fees. Very frustrating.
The following coins are available for purchase via USD on Coinbase:
Bitcoin (BTC)
Ethereum (ETH)
Litecoin (LTC)
Bitcoin Cash (BCH)
GDAX: When you are fed up with Coinbase fees
GDAX is Coinbase's exchange. There are no fees (excluding the cash advance Visa or Chase fee) but it can take several days after you place your order for the USD to be deposited into your account.
GDAX offers the same coins as Coinbase. You can transfer coins for free from Coinbase to GDAX.
GDAX prices typically align with the market price, but there are a lot of new people in this space who don't know to check other exchanges before purchasing. When BCH hit Coinbase/GDAX it traded for as high as $9,500 while on other exchanges it stayed around $3,000.
Expanding your horizons
Altcoins! Altcoins! Altcoins!
You will eventually get bored with the same old Bitcoin-Ethereum-Litecoin merry-go-round. When you do you will want to branch out to another exchange that offers more coins.
There are numerous exchanges out there, but I will detail the more popular ones.
Binance
Offer a wide variety of coins and a fair user interface. Based in China.
Poloniex
Offers a decent number of coins with larger market caps and a slightly sleeker user interface.
KuCoin
Offers a wide variety of coins and has a nice user interface.
Bittrex
Offers a fair amount of coins. Cumbersome user interface.
Gemini
A good alternative to Coinbase for buying coins with USD.
Robinhood
At the time of writing this, Robinhood does not have an available crypto exchange. However, they are planning to release their platform designed to be a direct competitor to Coinbase in February. To start, they will be operational in 5 states: California, Massachusetts, Missouri, Montana, and New Hampshire.
For more information check out http://blog.robinhood.com/news/2018/1/24/dont-sleep .
Wrapping up
This should give you just enough information to acquire your first Bitcoin. Again, this was not meant to be a technical explanation of crypto and everything stated is my personal opinion. I greatly welcome any feedback or constructive criticism.
Coins mentioned in post:
https://steemit.com/bitcoin/@andrea97/how-to-earn-quickly-and-safely-bitcoin-btc-bitcoin-cash-bch-litcoin-ltc-doge-dash