I hope the following might educate you and maybe even entertain you a little
A little background on me (will keep this limited since I really shy away from talking about myself). I am a technical dude in my day job and am in the US. I enjoy sharing what I know if it can aid someone along the way. About a month ago my crazy big brother told me about Bitcoin and Alt Coins. I was intrigued, did some research and was hooked like the first time I had Jamaican brown stew fish. Make no mistake, if you are new to this, it is a rabbit hole. Swallow the red pill and there’s kinda no turning back. What I like about this space is that the average Joe has a real opportunity to change his net worth, maybe a little, maybe a lot. Yes there is a lot of anti-bank anti-government undertones, but I look for the positive and can’t really delve into the negative right now. So some questions I first raised when introduced to this may be questions you should ask or already have asked if you’re on the fringe. "Every great quest begins with a question" Joseph Campbell
What the heck gives value to these coins?
I will not bore you with all the technical details, please research and empower yourself on the history of bitcoin. How it started? What is Proof of Work? What is hashing difficulty? Some links below:
http://historyofbitcoin.org/
http://www.investopedia.com/terms/p/proof-work.asp
http://www.coindesk.com/bitcoin-hash-functions-explained/
From what I gather the value given is the resources (aka electricity/computing power) needed to verify transactions. Speculation, which includes news coverage, hype, actual implementations and a solid map of what the coin is doing. A good seasoned development team also contributes to this.
I am used to physical dollars and cents, this cryptocurrency can’t be held in my hand it’s digital so how real is it?
For me to find my own answer, I had to understand what the money or currency I have is.
Currency is defined by Webster as the following:
i) circulation as a medium of exchange
ii) general use, acceptance, or prevalence a story gaining currency
iii) the quality or state of being (backed by who)
Ok so my US dollars are backed by the US Treasury, is accepted around the globe and is accepted everywhere basically. My money now is direct deposited into my bank, my ledger shows I have X dollars, I use my debit card most of the time to spend. My balance is updated instantly for most transactions. The bank is insured and has been around a while, so my pennies are more than likely safe pending world doom. Cryptocurrency meets this criteria as a real currency. It is backed by the blockchain and network, it can be used to buy goods and services, general use is rising. It is currently in circulation with a market cap today near $89M. There is no insurance nor assurance however. If you bought into a coin where everyone has left the building, that’s wrap. Sorry if this has happened to you.
OK you have me at Hello, so how do I even invest?
Research/study/more research, step away and research more. Start by picking one of the top ten, or even the top 8, and challenge yourself to know all there is to know about a coin. If you are non-technical, much of what you read will appear as blah blah chain blah blah algorithm blah blah blah hash power. That’s ok. Even as a technical person, I have no experience in programming or development. Some of the concepts took a few reads to wrap my mind around. But for me to take my hard earned money and place it anywhere, I would be a fool not to comprehend some or generally most of what I am throwing it at. If you are non-technical and are interesting in investing, challenge yourself to grasp at least something critical in this technology, even if it hurts. If you don’t understand something, don’t invest in it.
Those of us in the great US of A can all tell how difficult it is to make that first buy with cash and not get raped in the process. First you have to find a reputable exchange that accepts USD. I recommend Kraken, but started with Coinbase (training wheels with a rusty bike). I will tell my Coinbase bad beat story later. For Kraken, it’s almost like applying for a mortgage and a little more painful than doing your taxes to get in to the tier that allows you to deposit cash. This is due to US regulations imposed on exchanges to Know Your Customer (KYC). Interestingly enough, you can find a Bitcoin ATM, spend a huge premium to buy and no one knows or cares who you really are. You can also meet up with some cat willing to sell you bitcoin in your local area in person. You can buy with a credit card on Changelly or Coinmama (funny name “Momma, there goes that sucker”) and pay a nice premium also. Neither of the 3 mentioned options are for me. I’m in no rush and yes I have the fear of missing out (FOMO) sometimes waiting for my wire transfer to show in my Kraken account, but patience prevails.
This answer as the others, is subjective, but this whole writing is an opinion, everyone has one. I’m just sharing. As of this writing, the King of all, Bitcoin has a few issues to work out. At first I didn’t buy any due to the price and potential gains for the amount of money I am investing, which is less than 4K in case you are interested. (I’m a small fish with a big heart.) After I learned more and more, my choice was to wait for Bitcoin to work out what it’s working out. To know more search for:
Bitcoin UASF, SegWit Bitcoin, Segwit2x Bitcoing or these links:
http://www.uasf.co/,
Segwit - https://segwit.org/,
A great detailed video on the “Dollar Vigilante’s tube channel here –
explains a ton.There is some conflict that has actually been going on for a while now.
• There are users of Bitcoin, who find that their transactions have gotten not only too costly, but take waaaaaay too long to confirm. They want change and want it now.
• There is the Bitcoin Core community who are the developers working on the software, scaling issues, etc. They have one solution.
• Then there are the miners. Those who make the thing go, they validate transactions and reap the transaction fee. I read that last year sometime, mining fees were roughly $100K/day, but is now $1M/day. They have another solution.
The 3 groups are in a sort of civil war to resolve how to deal with the scaling issue for now and the future. A resolution should mean that transactions will get confirmed much faster and the fees will be smaller. What bothers me a little is that this story is really an old one. Grass roots raw uncut movement takes hold, popularity increases, more money gets thrown around and made. The movement starts to look like politics and things become polarized. The “truth” gets distorted and not many can really see or understand the devil in the details. So where does it go from here? Who the heck knows?! So many possibilities. One positive to take away is that through all the drama and long transaction verification times (some have claimed days), Bitcoin is still the juggernaut. It takes little hits, bounces right back. New all time high, a few dips, a little correction and still at %150 gain this year. I prefer to wait until some things settle before investing, but not too long after. Things will get a little bumpy, but when it’s all over, even if there are 2 Bitcoins, the brand name will prevail and there will be more exciting times to come in the near future.
If not Bitcoin then what?
Again, research/study/more research, step away and research more. I found myself looking at Litecoin. Hmm very interesting. Who are they? How long have they been around? Is there a use case for them? What’s the price and potentiality here?
The more I looked at Litecoin, it was like getting to know someone and finding that there are layers to them and finding that they are way more than meets the eye. I’m from The Bronx New York so this analogy will have bias. Litecoin to Bitcoin is like The Bronx is or was to Manhattan. Most tourists visit NYC usually see the sites, the glitz, and the glamour found in Manhattan. Some think that NYC is Manhattan, but there are 5 boroughs yo! Those who are in the know, get off the beaten path to discover The Bronx and other boroughs. Those of us from there already know. They usually realize, oh this is nothing like I thought. There are great communities and awesome diversity, the food scene is great. There is an authenticity in the Bronx second to none. So then why does Manhattan get all the attention? Why does Bitcoin? Why not show some love to The Bronx and Litecoin. It’s the nature of things. Things that shine get the first look. But what if something else shines, in its own way? To me Litecoins shines, in it’s own way. Some want to say its silver while Bitcoin is gold. OK fine.
So my newfound wisdom and instincts in doing my 1 week of research (real seasoned vet here) led me to believe “this shit is undervalued, I’m getting me some of them Litecoins.”
While waiting for Fort Kraken to verify me and get me to security clearance (tier) level 3, Coinbase verified me and allowed me to transfer USD using the 2-3 day ACH transfer method. Hands rubbing together, heart racing, I set it all up to buy Litecoin, which had dipped to a little over $17.50 that morning. Set my amount thinking “weeee I’m gonna get this cheap and make out big, you watch.” Hit the “Buy” button, ok there’s an hour glass, I guess it takes a second. Yep, still waiting, it’s probably because it’s my first time. Then the minutes got longer, the hour glass taunted me by not making my purchase. About an hour later, I get the text message from the Coinbase alert I signed up for, it read something along the lines of “Coinbase latency detected, investigating”. I thought OK this is a big exchange out of NY, this will be fine. An hour later, the next text message came through, “Coinbase system down, investigating”. Not pissed yet, but I was getting there. I stayed positive for a while, but by lunch time (3-4 hours later) the site was still down, my hourglass from the purchase was still spinning, but I swear I saw a laughing smiley in there. To end this bad beat story, Coinbase was not back up until 9 hours later, yes 9 hours of no trading. Guess what? Litecoin was now $ 33 bucks, waaaaaaa. I took little comfort in being right, I yielded to bitterness for a while. It happened, I still trusted my instincts and bought LTC at $ 33 bucks and change. At the time of this writing it’s $48 and last week hit a new high of $50. So all good. I’m verified high enough on Kraken, so all is well now.
My opinion about Litecoin is that there is no reason why it should not shine or even give Bitcoin a run for it’s money, especially during the current period. This is what led me to where I am, please formulate your own opinion, do your own research.
i) Has been around since 2011 – Origin story here - http://www.coindesk.com/litecoin-founder-charles-lee-on-the-origins-and-potential-of-the-worlds-second-largest-cryptocurrency/
ii) Was kinda like a Bitcoin testnet since the protocol is very similar, not sure but I think it was built from the Bitcoin Core
iii) Great community of developers and users
iv) No hype, just do. Rarely big splash announcements, they just quietly do their thing and actually offered to help Bitcoin solve it’s current issue. - https://cryptoinsider.com/litecoin-may-become-bitcoins-testnet-segwit-lightning-network/
v) Progressively implemented changes that Bitcoin actually needs and everyone in the community is was board with it. - https://www.cryptocoinsnews.com/litecoin-successfully-activates-segwit/
vi) Sites accept Litecoin and Bitcoin for purchases. Also, as an alternative, merchants can switch over from accepting Bitcoin or accept both with minimal changes.
vii) They are looking to implement something called Lighting, look that up. -
viii) Can’t forget that the founder, Charlie Lee, was at Coinbase for a while and recently left to go back to Litecoin and help the Chickun Run.
ix) They are the underdog, the overlooked, they are The Bronx!
To note, DASH coin is similar for most of the above reasons, it’s just out of my price range at the moment. When I make some loot, I look to diversify some more by buying DASH.
How do I protect my investment, where should I store it?
I will list in order of what I rank as secure, lowest to highest:
Exchange – I recommend you never store your cryptocurrency on exchanges unless you want to simply keep a little handy to do trades for other currency quickly. Depending on your bank, anything over $1K is too much at risk stored on an exchange wallet. There are countless stories in the past few months of exchanges being hacked, money gone. Even so, I recommend turning on 2 factor authentication when possible. It’s an extra time consuming step where not only do you enter your password, but code sent via SMS to your phone or one generated by Google authenticator on your phone.
Browser Based Wallet – If I had to have to store currency on this kind of wallet, I at least try to use ones made by the developers who developed the coin. These synchronize directly to the blockchain or accounting records if you will for that coin. That being said, browser wallets are probably safer than exchange wallets these days, but please know that browsers open you up security risks inherent to an internet browser.
Desktop Wallet – I’ve come around on these as I am getting up to speed on all this. They are usually available on all the major operating systems. A desktop wallet is said to be as safe as the computer you’re storing it on is. As with the browser based wallet, I use the same approach where possible, using the ones created and compiled by the developers of the coin. For example PIVX Core for PIVX and RIPPEX for Ripple. Backup the wallet to an external drive or to your secure cloud solution.
Mobile Wallet – For IOS and Android. I like these as much as the desktop wallets. It’s kinda a novelty to be able to see your holdings on your phone at all times. I use the same rule here where I choose a mobile wallet created by the coin’s developers.
For the 3 above remember to store your backup phrase or private key somewhere safe.
Hardware Wallet – If you plan to chunk down 2K or more in this world, you want t protect your investment. You can’t beat a hardware wallet for security. It’s un-hackable, offline and all of the work is done within a bubble on the device and not across the internet. Trezor and Ledger are the ones I know of. If you order from Ledger (about $100 USD) now, delivery is in 2 months, smart capitalists are reselling for 3x the price on Amazon.
Other Helpful Information
There are some Youtube talking heads I like to listen to since they give solid perspectives and don’t seem to favor or pump one particular brand. Some actually express opposing views, but this helps one form one’s own opinion
Ryan Lye – Solid as they come, mentions that he has banking experience. If you’re an investor or a trader, his advice can be helpful. https://www.youtube.com/channel/UCEhFzdgTPR8MmeL0z-xbA3g
The Modern Investor – Good insights and tubes a lot of info - https://www.youtube.com/channel/UC-5HLi3buMzdxjdTdic3Aig
Chris Dunn – Solid opinion - https://www.youtube.com/user/chrisdunntv
There are more, but these are my favs right now.
I am hopeful you find any tidbit of this useful.
“Live, love, laugh, eat”
Thanks for the info as a beginner.
@bodyinbeta
seems you are experienced in crypto...any advice for a beginner...
I would say read all you can and form your own opinion. Find a youtuber or someone here that can speak to your level and ask questions. Take as much emotion out of it you can. Most of us will not get rich overnight.
Great job sharing tips for new investors. Check out my article on Steemit providing tips for new cryptocurrency investors: https://goo.gl/iyrTNC
Nice!! I like the beginner stuff 🙃 Resteemed!
Thanks! It's a work in progress.
great info
thanks for sharing
Nice blog!
Where To Start Learning Cryptocurrency? 5 Top Youtube Channels Recommendation! 从哪开始初学加密货币？为您推荐5个视频学习资源