So, you’re interested in buying into crypto, huh?

First off, let me say, “Welcome to the party. We’ve been waiting for you.”

Cheers

Many have asked me, “Where do I get started?” In this post, I hope to clarify some of the processes and offer tips and suggestions for people looking to enter the space. And while I know many crypto-veterans might prefer different wallets and offer different advice, but I’m trying to keep this as simple as possible for many who are brand new to crypto. As users mature and become more familiar with the space, they will find their way. And we will be here to guide them. But, you gotta start somewhere. So, here it is.

NOTE: If you’re reading this and would like to offer additional insight or advice for our newcomer friends, please feel free to add your thoughts and opinions in the comment section.

Investing in Bitcoin, Ethereum, and Litecoin

Step One: Download Coinbase & Buy

The easiest place to start is to download the Coinbase app. That app will serve as your wallet and allows you to buy and sell:

Bitcoin
Ethereum
Litecoin

Once you’ve created an account, you’ll be able to link either your bank account or your debit card to Coinbase.

Security

DO NOT SKIP THIS. Once you’ve created your account, make sure to harden your account as much as possible. Once in the app navigate to Settings > Security and enable all possible security measures.

Linking your bank account:

Pros - Larger transaction amounts are allowed (2k+)
Cons - It takes days (5-7 business days) to transfer

Linking your debit card:

Pros - It’s instant. Funds are available immediately.
Cons - You can only purchase up to 2k per week. However, you can increase your buying limit, but you’ll have to provide more personal info.

Fees

Coinbase does charge fees on each transaction, which is annoying - I agree, but they are fully insured, SEC compliant, and based in the US.

Customer Support

Their customer support/response time is less than impressive, but they’re a relatively new company and their user base has exploded - I imagine they are rushing to increase their support department. I will add that their support blog is incredibly helpful for new users.

Cashing Out

At any time, you can cash out and send your money (in USD) to either any of your linked accounts/options:

Coinbase USD wallet (transfers instantly)
Bank account (takes days to transfer)
PayPal account (transfers instantly)

Step Two: Watch & Manage Your Holdings

Once you’ve downloaded the app and bought your first amount of cryptocurrency, you’ll likely want to keep abreast of all the latest developments happening in the cryptocurrency ecosystem. There are many ways to stay in-the-know, and I’ll provide some initial starting points here shortly. But first, let’s get some housekeeping items out of the way:

Things to Know & Consider

Price Volatility

The cryptocurrency markets are very volatile, meaning it is not uncommon to see price swings anywhere from 2% to 60% over a short amount of time. Don’t panic (completely) when you see this type of market behavior. I would never expect anyone to take a loss, so I would generally follow a couple rules:

Never invest more than you are willing to lose. Ever.
Some amount of loss up-front is very likely (especially considering how volatile the price is), so I would recommend holding out through your first “crash”, and then after a few months, set price alerts at the level you would need to cash out before taking a total loss.
Part of the market’s behavior that is directly related to its long-term bullish outlook, is that whenever there is a significant drop in price, there are plenty of buyers waiting to buy back in at the lower price, therefore driving the prices back up to recovery. Stay in the market long enough and you’ll see this activity happening and, like many of us, hope for a “crash” so you yourself can “buy the dips”.

Relax

Alt-Coins

Bitcoin, Ethereum, and Litecoin are only three (of thousands of cryptocurrencies - referred to as alt-coins) that have entered the market. Most of these you will not be able to invest in through Coinbase alone. To invest in other digital assets, you must create an account on an exchange that will allow you to buy other coins using either Bitcoin or Ether - a process I’ll explain later for those who might be interested in further diversifying their crypto portfolios. But, for those who aren’t interested in such ventures: sticking to the “top 3” is always an option.

Forks

Once you start to follow development updates, you’ll start to hear references to “forks.” Forks can either be hard-forks or soft-forks and are essentially - protocol updates. I found a pretty succinct explanation of forks provided by "Cryptosomniac". (NOTE: I am not endorsing this individual by any means, as I have not watched any of their content. I just wanted to source the forks definition.)

Hard fork: A hard fork is a software upgrade that introduces a new rule to the network that isn't compatible with the older software. You can think of a hard fork as an expansion of the rules. (A new rule that allows block size to be 2MB instead of 1MB would require a hard fork).
- What happens: Nodes that continue running the old version of the software will see the new transactions as invalid. So, to switch over to the new chain and to continue to mine valid blocks, all the nodes in the network need to upgrade to the new rules.
- What can go wrong: The problem comes when some sort of political impasse arises, and a portion of the community decides to stick by the old rules no matter what. The hash rate, or network computing power, behind the old chain is irrelevant. What matters is that its data (and ruleset) is still perceived to have value, meaning miners still want to mine a chain and developers still want to support it.
Soft fork: A soft fork, by contrast, is any change that's backward compatible. Say, instead of 1MB blocks, a new rule might only allow 500K blocks.
- What happens: Non-upgraded nodes will still see the new transactions as valid (500k is less than 1MB in this example). However, if non-upgraded nodes continue to mine blocks, the blocks they mine will be rejected by the upgraded nodes. This is why soft forks need a majority of hash power in the network.
- What can go wrong: When a soft fork is supported by only a minority of hash power in the network, it could become the shortest chain and get orphaned by the network. Or, it can act like a hard fork, and one chain can splinter off.
- Soft forks have been the most commonly used option to upgrade the bitcoin blockchain so far because it's argued they present a lower risk of splitting the network. Past examples of successful soft forks include software upgrades like BIP 66 (which dealt with signature validation) and P2SH (which altered bitcoin's address formatting).

So, when an upcoming fork is announced, you might notice a lot of chatter surrounding the update, and depending on the circumstances you may even see the price start to dip right before the protocol update occurs. This is normal.

A lot of debate surrounds these protocol updates, many of which are political in nature. Keep in mind:

Tweeting is easy. Coding is hard. And opinions are like assholes.

Many people are smart but misinformed. Avoid the hype. Keep calm and do your own research.

Resources

Some good places to read about what’s happening in the cryptocurrency space:

Also:

Like and follow Laserlike on FB for updates via FB messenger

Some recommended follows on Twitter:

For updated charts, exchange listings, pricing, and other metrics:

CoinMarketCap

NOTE: This list is far from comprehensive, so any other suggestions are welcome and can be added to the comment section.

Investing in Alt-Coins

I find it helpful for newcomers to think of each coin as its own unique “business” - each aiming to serve a specific market function. Some coins are built on the Ethereum protocol and utilize what are called “smart contracts” and others are built off the Bitcoin protocol.

There are pros and cons to each, and they all serve some type of function or purpose in the upcoming “Internet 2.0” revolution. But, I would be wary of most alt-coins. Anyone can have an idea and create a coin (the code is all open source). But it takes true talent, leadership, and know-how to build and maintain a successful coin/platform. Which leads to my next point.

DO YOUR OWN RESEARCH. Always. Never invest in other coins without researching the coin and what it has to offer.
- Read the whitepaper
- Research who is on the development team
- Does the coin have a useful place in the market

One alt-coin that really piques my interest (and many other’s) is Ripple (XRP). Watch their video for a high-level view of the protocol.

Step One: Create an Account on an Exchange

There are many exchanges to choose from. I prefer ones based in the U.S., but - to each their own. A list of US-based exchanges to choose from:

Exchange	Regulation
Kraken	N/A
itBit	NYDFS
Gemini	US Trust regulation
Bittrex	N/A

Once you’ve created your account on the exchange, you will be automatically assigned various crypto wallets (one for Bitcoin, Ethereum, Litecoin, and other alt-coin wallets) to send funds to/from.

Securing Your Account

You will want to ensure that all security features are also enabled for your exchange accounts as well. Make sure 2FA is turned on and required on each login. Many use Google Authenticator codes as a form of 2FA. It will require you to download the Google Authenticator app from your app store (if you haven’t already done so when enabling security on your Coinbase account).

Step Two: Sending Money to the Exchange

Now that your account on the exchange is all set-up and secured, you’ll need to send either Bitcoin or Ether to your exchange wallet(s).

Do NOT send BTC to an ETH wallet or vice versa. You will LOSE your coins.
ALWAYS triple check the addresses.

There exists some malware that is configured to identify when a wallet address is being copied, and is written so that the malware will paste the hacker’s own wallet address into the recipient field. If you don’t check the address and click send, you will lose those coins.

ALWAYS triple check the addresses.

Step Three: Buying & Selling on the Exchange

Once you’ve successfully transferred your BTC or ETH from Coinbase to your exchange wallet (a process that takes anywhere from 10 mins to hours depending on the network traffic), then you are ready to buy the alt-coin.

Now, I won’t get into the weeds on buying and selling on these exchanges. But there are great resources available online that can walk you through the process of buying and selling on the various exchanges. Searching YouTube videos for “buying on Bittrex” (for example) will provide useful visual guides on the buying process.

Conclusion

Well, that’s an incredibly high-level overview of what you need to know and do to enter the crypto space with at least some level of confidence and knowledge. The greatest gift you can do for yourself is to educate yourself as much as possible on things happening in the space and to stay calm. Otherwise you’ll find yourself panic selling all your assets and kicking yourself for having to buy back in at a higher price. Trust me, many of us (including myself) have learned this lesson the hard way.

Invest. Stay the course. Profit with the rest of the us. Happy investing!

buybtc

Guide for Crypto Newcomers