If you're new to the crypto space, this article is for YOU! I've been researching crypto coins and tokens for the better part of a year now and I finally pulled the trigger on some Ethereum and LiteCoin last month. I have to say that the space is really exciting and as a newcomer looking from the outside, I really didn't know where in hell to begin. I felt like I was the guy who wasn't invited to the party. I was reading all kinds of publications on Reddit and Coin desk, and watching YouTube videos by Andreas Antonopoulos but still couldn’t pull the trigger until just recently. I was nervous and didn’t have anyone around me to help. So you newbies can thank me because I have a few things that will help you get an excellent start and feel a bit more comfortable dipping your toe into the crypto currency market.
First, do some research on what blockchain technology is. You don't have to figure out java programming or how to create your own blockchain network, but if you want to then go for it! Start out by reading a few articles on what it is, what is does, and how industries like automotive, finance, and IT can use it. Look up Toyota and MIT Media Labs and what they're doing with blockchain technology. There, I threw you a bone haha.
Second, unless you have money to burn or are a seasoned trader of crypto currencies and tokens, stick with what I call the Big 3 coins and tokens which are Bitcoin, Ethereum, and Litecoin. Why? Because in a year, 2 years, 10 years they will still be around. The other 880+ (as of June 22, 2015) will most likely be gone or still worth less than a penny. There are others like Dash, Monero, ZCash, Maidsafe, Veritaseum, etc. that will most likely be around too but you can't go wrong purchasing the Big 3. Again, do some research on the coins/tokens -- who made them, what do they do, what makes them stand out from the other 880+ cryptos, how do they complement each other (i.e. Bitcoin and Litecoin)?
Third...now that we have you squared away on what this stuff is and what the use cases are, you're almost ready to purchase some crypto! So let's talk about where to buy the coins and tokens. I'm in the United States so I use Coinbase, because I can and because it's really easy. But there are others like Poloniex, Kraken, Bittrex, ShapeShift, and Bitstamp out there too. My advice to you is go to a few of the exchanges and see what you like about them. Is the user interface easy to understand and use? You will also want to look at these 5 areas:
Reputation -- This is probably the most important because you want confidence the exchange will be around for a long time. Do a Google search on Coinbase reviews or Poloniex reviews, etc.
Fees -- Most exchanges will have information about fees on their websites. Before joining, make sure you understand deposit, transaction and withdrawal fees.
Payment methods -- What payment methods are available on the exchange? Credit & debit card? Wire transfer? PayPal?
Geographic Restrictions -- Are accounts from your country of origin allowed on a particular exchange?
Verification Requirements -- All reputable cryptocurrency exchanges and trading platforms in the US and the UK require some sort of ID verification in order to make deposits & withdrawals.
Fourth, and very important, learn about public keys and private keys and what the difference is. Essentially, your public key is the address used to receive crypto coins/tokens and your private key is used to sign the cryptocurrencies you send to others. It’s also used to mathematically derive the public key but never mind that for now. Think of the private key as the spend part of your crypto wallet. DO NOT give out your private key to anyone! If someone were to obtain your private key, they would be able to send your cryptos to themselves, verifying that transaction with the private key — in effect stealing from you! This is called sweeping a wallet.
You need to research paper wallets (offline cold storage), hot wallets, and hardware wallets (offline cold storage) right now! If you don’t hold your private keys you don’t hold your crypto!
Video courtesy of @kennethbosak (Steemit) / YouTube: https://www.youtube.com/user/MrKennbosak
Subscribe to Kenn Bosak’s YouTube channel and watch his video called “HOW TO: Bitcoin Paper Wallet 2017 (encryption edition)”on how to create a Bitcoin paper wallet (
However, the best way to store your crypto that I think is better than a paper wallet or a hot wallet is a hardware wallet. Go on YouTube and search for reviews and how to use the following hardware wallets:
- Trezor
- Ledger Nano S
- KeepKey
You can’t go wrong with any of these. All of them support the Big 3 cryptos and some even support more than that. As of June 22, 2017 these hardware wallets are all on back order for at least 2 months. So do yourself a favor and watch Kenn Bosak’s video on how to create a paper wallet. After you’ve transferred a few dollars worth of crypto to your new paper wallet, you can go to blockchain.info and check the balance by entering the public key. One thing to note…after creating your paper wallet, don’t send all your Bitcoin or Litecoin to it. Do a trial run and send $5.00 worth of BTC (Bitcoin) and make sure it works. Do that, then go to blockchain.info (if it's a BTC paper wallet) or another site of that ilk and verify (with your public key) that the transaction went through. If it was successful, you know your paper wallet is properly set up and now you can send whatever amount you want to your paper wallet. Why do a trial run? Because if you fuck up and send all your cryptocurrency to the wrong public address you’ll want to crawl into a hole and die! It’s an irreversible transaction and someone else now has ALL of your coins/tokens.
By now hopefully you’ve found an exchange and purchased some crypto currency.
The fifth, and most important thing of all is, GET YOUR COINS AND TOKEN OFF THE EXCHANGES!!!! Did you hear me yelling??? I said it earlier, and I’ll say it again…if you don’t control or own your private key, you don’t control or own your coins/tokens…the exchanges do. If an exchange goes down for technical issues like traffic overload or “maintenance” (a hem…Coinbase) and your crypto is stored there, you have no control over what happens to it. If an exchange goes belly up or gets hacked, or whatever and your coins are there instead of in your possession (private keys and all), you’re royally fucked!
I hope this helped some of you noobs out there. I enjoyed writing my first Steemit article. Good luck everyone!
AC
Video courtesy of Kenn Bosak (@kennethbosak) / YouTube: https://www.youtube.com/user/MrKennbosak
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@adamchalmers You'll need to cite the youtube video you are using above. @kennethbosak you have a fan :)
Done...thanks for the heads up.
Some good tips for noobs, I like the 'crawl in a hole and die' part. LOL.
Thanks. I try to add a little humor in my writing :-)
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