You can buy cryptocurrencies from a number of exchanges. The ones I recommend you take a look at are:
A. Coinbase — the most mainstream option. Certainly the most established. Buying and selling is easy and your bitcoins are insured. (Learn more about Coinbase on their Support page:-
With Coinbase, you can purchase bitcoin, litecoin and ethereum.
B. Kraken — Another great choice. Kraken is known for its security, support and low fees. Signing up and getting started is simple. Plus, it provides a few more options to choose from: ethereum (ETH), monero (XMR), dash (DASH), litecoin (LTC), ripple (XRP), stellar/lumens (XLM), ethereum classic (ETC), augur rep tokens (REP), Iconomi (ICN), melon (MLN), zcash (ZEC), dogecoin (XDG), tether (USDT), gnosis (GNO) and Eos (EOS).
These exchanges are very easy to use. If you can use PayPal or online banking, you can figure these out fairly quickly.
==> STORING YOUR COINS:-
Another question I get a lot is how to secure your cryptocurrencies. First things first, don’t keep your coins on the exchanges — which are basically just centralized, unregulated online banks.
Cryptocurrencies are the first form of money you can store in your brain. That’s a revolutionary idea. But right now, it’s also pretty involved.
It’s a long process. It’ll get easier. But now, it’s not. But even if you don’t want to store your bitcoin in your brain, it’s best practice to always have control of your private keys. Let me unpack what I mean by that.
===> PUBLIC VS. PRIVATE KEYS
Your cryptocurrencies come with both a “public key” and a “private key.”
Your public key is your address. It’s what you give to people who want to send you money.
Your private key is, put simply, your account “password.” When a transaction is executed, you “sign” the transaction with your private key.
Your private key unlocks your funds. When you hold your cryptocurrencies in exchanges, you don’t own the private key.
The exchange does.
One great thing about cryptocurrencies is you can become your own banker — so keeping your crypto on an exchange defeats this purpose. It also goes against the idea of decentralization — centralized exchanges can’t be trusted.
They have one vector of attack and, if hit hard enough, they come crashing down. So how do you secure your coins (private keys)?
I’ll talk about three ways in this post.
A. Store them in a downloadable “hot” wallet specific to your coin [easy, less secure]
B. Store them in your brain [very difficult, very secure]
C. Store them in your safe, hidden compartment or in a fake can of hairspray buried in your backyard [somewhat difficult, highly secure]
D. Store them in a cold wallet device [moderately easy, very secure].
==> THE DOWNLOADABLE “HOT” WALLET
Most currencies have their own “wallets” you can download and hold your coins on your computer or smartphone.
If you want a bitcoin wallet, for example, you can download it here:
https://bitcoin.org/en/download
But what if you want a wallet for a different cryptocurrency? Well, sorry to send you off, but the easiest method, as usual, is to Google it.
(Google: “download [cryptocurrency name] wallet”)
But wallets aren’t without risks. The security of your coins is as strong as the security of your device.
So if you’re going to go with this method, I suggest using a VERY strong password and having several backups. (encrypted USB sticks and external hard drives.)
If you want maximum security, I suggest you either:
A. Secure your money in your brain.
B. Secure your money in your safe.
C. (Most recommended) Secure it in a cold-storage wallet device (although this choice is limited to a few coins).
I’ll go through all of these one by one.
But before I do, if you’re an ABSOLUTE beginner, I’d suggest you just skip to C and get a cold-storage wallet device. They are pretty plug-and-play and they’re easily the safest way to store your coins. Remember: The reason crypto exists is so you can better control your own money. If you don’t hold it, you don’t own it.
The best way to secure your bitcoins for mid- to long-term storage is to put them in “cold” storage.
Meaning, get them off of online exchanges and into an account where the private key has never been exposed to the Internet. (“Hot” wallets are those connected to the Internet and vulnerable to attacks.)
Thus, it’s virtually impossible to fall into the wrong hands online. (And as long as you secure it properly, it’ll be safe in the physical world, too.)
- How to create a brain or paper wallet Cryptocurrencies are the first form of money you can store in your brain. There are many ways to do this. But I’m going to show you a secure way that won’t be too confusing. This process can get extremely complicated. Here’s a very simple way to do it.
First step:-
Go to WarpWallet.
(Link: https://keybase.io/warp)
- Right-click anywhere on the web page and click “Save as”
- Turn off your Wi-Fi, find the file you just downloaded and open it. (You don’t want to be connected to the Internet when you create your private key.) If you want to be SUPER SECURE (recommended), put the file on a clean thumb drive, move it to a computer that’s never been connected to the Internet, open it up, then follow the instructions below.
- Put in a REALLY, REALLY strong password in the “passphrase” field. And put an email in the email box. (You can put in your regular email, but I recommend creating an email JUST for this purpose with 2FA enabled.)
I want to reiterate the importance of a strong passphrase. Anything below 14 characters and with familiar phrases is susceptible to a “brute force” attack. Meaning, given enough time, hackers could figure it out by testing out every possible combination of characters. Strong passwords are meant to make this process as cost-prohibitive and time-intensive as possible.
The problem people will run into with bitcoin is because they’ll be expected to manage their own security, they’ll goof it up. They won’t put enough effort or thought into the small portion of security left up to them — securing their private keys effectively.
- Click “Generate” and watch it work its magic.
Once generated, you’ll be presented with these:
From here, you have a choice.
6.) Write down or print your private key — or don’t.
This is where you have to decide whether you’re going to create a brain wallet or a paper wallet.
The purpose of a brain wallet is not having a paper trail. If you are 100% confident in your ability to remember your passphrase, don’t write it down.
If you’re only 99.9999% confident in your ability to remember it, write it in coded form. Write it in your journal, coded within every seventh word.
Write it in a book by circling the letters on every third page. Get creative. Or just write it down and keep it in a VERY safe place. If you do this, you’ve moved from a brain wallet to a paper wallet. If you go the paper wallet route, you have two choices:
You could write down/print your passphrase and email.
You could cut to the chase and write down/print your private key and/or copy your QR code. (Your QR code will make it easier to spend your funds in the future.)
In the end, your private key is what you’re after. Your private key/QR code is what you’ll use to access your funds in the future. (More on that in a moment.)
Whatever you do, I suggest writing or printing out your passphrase/private key down in three separate places and putting those pieces of paper in safe places. One inside your home. One outside your home. And another elsewhere.
You decide. You know best.
==> YOUR PUBLIC KEY
Copy your “public key” and paste it somewhere safe on your computer for easy access. This is where you’ll send your bitcoins. You’ll want to keep this relatively safe.
Important: The privacy risk in other people knowing your public key is they can look up how much money you have on that particular address. Something to keep in mind.
7.) Destroy all evidence before you log back in. Once you’re ABSOLUTELY SURE you’ve got the right private key, hit “Clear and reset.” Poof. It’s gone.
8.) Send your bitcoins to your “public bitcoin address.”
I suggest sending only a little bit first, to prove it works.
Copy your public bitcoin address and go to your chosen exchange (Coinbase, Kraken or whatever you choose). Under the “send” function, this is where you’ll send the bitcoin.
(Pro-tip: Always send a tiny bit on your first go to ANY address to test it out. AND always check then double-check to make sure the public key is YOUR public key. If your computer is compromised, hackers can replace your address with theirs in your clipboard.)
9.) Access and spend your bitcoins
If you chose the brainwallet option, simply open up your Warp Wallet again (preferably offline) and enter your passphrase and email. Grab your private key. (I’ll tell you what to do with it in a moment.)
If you chose your paper wallet, you already have your private key.
Get it.
Claiming the funds requires specific software. This software is a type of “hot” wallet. “Cold” wallets, like your brain or paper wallets, are wallets stored offline. “Hot” wallets are the opposite — stored online. To spend your coins, you’ll have to move your coins to a “hot” wallet.
There are varying degrees of safety when doing this. Again, I’ll show you two simple and secure ways.
The first is a way to put ALL of your funds on a web wallet.
The second is a way to do a partial spend in which the wallet destroys your private key when the transaction is over, keeping the remaining funds secure.
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