Thursday 2/1/2018
By Zhen Liang
Bitcoin for beginners, a quick guide by Zhen
Hello world, my name is Zhen Liang and I got into bitcoin back in November of 2017 because I saw it all over the news and I thought I would look into it for investment purposes. For full disclosure, I’m not a financial advisor and I’m only educating the mass on the tools used to invest in bitcoin and it is solely my opinion and not financial advice. Also, I just want to stress that investing in bitcoin is very high risk and the cryptocurrency market has a very high volatility turn rate. Now that you have been warned, let me take two quick minutes explaining what bitcoin is, what blockchain technology is, what bitcoin mining is and what the future holds for bitcoin. I will also post links down below regarding my referrals as well at the end of this guide should you choose to want to invest in bitcoin and altcoins. I also strongly advise not to invest money that you can’t afford to lose or can’t afford to set aside for a long period of time.
According to bitcoin.org “Bitcoin is an innovative payment network and a new kind of money. Bitcoin uses peer-to-peer technology to operate with no central authority or banks; managing transactions and the issuing of bitcoins is carried out collectively by the network. Bitcoin is open-source; its design is public, nobody owns or controls Bitcoin and everyone can take part. Through many of its unique properties, Bitcoin allows exciting uses that could not be covered by any previous payment system.” Basically to summarize, it’s a newly invented decentralized digital currency accepted worldwide to transfer funds from peer to peer that is secured and verified using the blockchain technology. Bitcoin is the first cryptocurrency introduced in 2009 by an unknown person or group of people under the name of Satoshi Nakamoto as a way of payment worldwide from peer to peer without a middle man to cash in on the fees. It is a digital currency that works without a central bank or have any guardiancy to regulate the actual value of the currency. It is instant transactions that can be send without borders and can be converted into any fiat money. Fiat money is a currency that a government has declared to be a legal tender but is not backed up by a physical commodity. Bitcoin money is a currency that the people want to use as a quick digital payment transferred from person to person. Ever since bitcoin has been developed, other altcoins have been introduced to the market as an alternative cryptocurrencies with competitive advantages using or copying the technology of blockchain.
Blockchain technology is the backbone of bitcoin which is like blocks of codes connected to each other working together as a huge decentralized ledger for bitcoin which records every transaction and stores this information on a global network so it cannot be tampered with.
Bitcoin mining is a reward system to verify bitcoin transactions. Miners keep the blockchain consistent, complete, and unalterable by repeatedly verifying and collecting newly broadcast transactions into a new group of transactions called a block. Miners are rewarded with newly bitcoins and transaction fees when they successfully verified the new block.
Now that you understand a little about bitcoin, let me share with you my journal that started out on a gloomy Friday, November 17 of 2017. The news popped up everywhere on CNN, Fox news, Facebook ads, social media saying how if you invested $100 dollars into bitcoin back in 2013 which was only 4 years ago, you would have $1,000,000 dollars as of today. So I thought to myself why not, who not invest $3000 dollars into bitcoin and see where it goes. So I googled on how I can buy bitcoin and the first match that came up was coinbase. And at that time there were only 3 options that can be invested which was bitcoin, ethereum, and litecoin. Not knowing anything about the 3, I decided to split $1000 into each coin. So I bought $1000 of each coin, bitcoin price at that time was $7713, ethereum was $331, and litecoin was $66 which gave me 0.12 bitcoin, 2.96 ethereum, and 14.75 litecon.
Fast forward a month to December 19 of 2017, bitcoin suddenly jumped up to $20,000 and I thought wow my investment really paid off. Stupid enough, I didn’t sell any of it and thought it could go up higher as I thought I would hold on for at least a year or so. I stupidly bought more into litecoin at a high of $375 a coin without thinking and now really know what the meaning behind HODL is, it means Hold On for Dear Life. Now we are on February 1st of 2017 and bitcoin is going back down to the $9000 price range again. So from November to February I learned a lot through my journal investing in cryptocurrency during these short four months. I learned that high risk usually means high reward or high loss, also I learned that I have to do my own research and due diligence. If something sounds too good to be true, it probably is.
I invested in a company called USI tech which my roommate referred it to me promising me 1% return on my investment daily and I thought why not. Basically USI tech is just like bitconnect which people put money in but can never take money out. It’s a Ponzi scheme that draws money from new investors to pay back old investors. Now there are civil lawsuits linking bitconnect with their youtube promoters. I personally think USI tech is just like bitconnect just like Tether coin and other scamming altocins out there. Be very careful investing in altcoins, always always do your research and check at least four to ten other sources before investing in altcoins.
Besides buying bitcoin on coinbase, robinhood is a new trading app is offering bitcoin trading later in February so check into that as well. Right now robinhood app is a stock trading app that lets you buy/trade stocks for free, there is a selling fee though because the stock exchange charges selling fees. To avoid all fees, I highly recommend going to Gdax which is linked with coinbase and you can avoid buying/selling fee if you buy/sell at a limit price that you set to yourself. In coinbase, there’s bitcoin vault where you can store your bitcoin a more secured wallet in case you want to store bitcoin for the long haul.
For trading platforms I currently use Binance to buy altcoins, but there are many other platforms like Kucoin, bitstamp, kraken, etc. Binance charges a fee but if you buy the Binance coin you can cut the fess in half, likewise with kucoin but so far I only used Binance and haven’t used kucoin yet.
For cloud mining, it’s a very high risk investment and I strongly advise not to invest into it given my example of being scammed by USI tech and millions of others getting scammed by bitconnect. But if you do want to explore that option, the only two mining companies I have my money invested in is Genesis mining and Hashflare mining. Genesis mining opened up ethereum mining contracts starting in April and hashflare have one year contracts of mining bitcoin, ethereum, litecoin, and others.
Apps that I use to track cryptocurrency market is CMA cryptocurrency tracker and coinbase which allows you to set
alerts for bitcoin prices. Using the coinbase alerts is very helpful because you can set up alerts when bitcoin goes past $10,000 or below $10,000. Binance and Kucoin also have mobile apps you can download to trade as well. A very good website that tracks bitcoin and altcoin prices is https://coinmarketcap.com/ , it gives current prices of bitcoin, websites, social trends, graphs, and other useful knowledge. It even have a bitcoin/altcoin calculator.
The price of bitcoin fluctuates through cycles of appreciation and depreciation climbing a high of $20,000 in just last month to jumping back down to $8000 as I am writing this article. So be warned into investing in bitcoin. Bitcoin is a fairly new subject and not many people have heard about it yet so I thought I spread the news a little bit more out to the public of what bitcoin is and my personal journey through investing in bitcoin.
My final thought is that I should have invested in stocks which is more of a relatively safe investment than bitcoin but since I did I am going to HODL (Hold On for Dear Life) for at least one or two years before selling. I would like to welcome your thoughts, questions, and comments on bitcoin to my email at [email protected]
Also I will have my referral links down below should you dare risk your investment into bitcoin. If there’s enough interest I will write a second article on my bitcoin journey in three months probably in May or June so look forward to that!
Referral Links
Buying bitcoin referral link: (If you put in $100 to buy bitcoin using coinbase/Gdax with my referral link, we both get $10 of bitcoin, remember to go to Gdax to buy your bitcoin to avoid any fees that coinbase charges you)
https://www.coinbase.com/join/5a0f927872f8b200e683703b
Robinhood referral link: To invest in Bitcoin and stocks, and we'll both get a free stock like Apple, Ford, or Sprint!
https://share.robinhood.com/zhenl36
Cloud Mining links: (Very HIGH RISK, please do your own research before investing)
https://hashflare.io/r/DED77BAE Referral Code DED77BAE
https://www.genesis-mining.com/a/2218841 3% discount referral Code qGfDPU
Trading Platform:
https://www.binance.com/?ref=18553623
Favorite website to stay up to date checking cryptocurrency market:
www.coinmarketcap.com
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