Getting started with buying and owning cryptocurrencies
This is a short introduction post for my friends that would like to get started with owning some crypto coins. The idea is to provide a simple guide with the minimal steps and some goto places. This post is not about opinion, advice, bubbles, or predictions but only to help you get started on the practical part of buying and safely storing your crypto coins. If you have decided to invest some of your money into it, this will bring you up to speed.
There are over 1300 different cryptocurrencies available at the moment of this writing daily new ones are emerging. For now, you don’t have to worry, nor understand too much about them. We’ll come to that later if you want to do some trading and speculation. But we start with the beginning and that is by converting some of your cash into crypto. I would advise picking an amount that you can miss and loose (because it is a big gamble), but still decent, for example, 1000 Euro.
From your ‘real money’ to ‘crypto money’
Let’s buy some Bitcoin. This is simple. Go to Coinbase – the largest platform I believe with millions of users – and sign up, connect a credit card, or wire some money. (if you use this link we both get a small reward for the referral). You have to go through some identification processes which is normal. Once you have your money deposited you can buy your first coins which will be stored in your account.
If you only want to own some Bitcoin (or Ethereum) you don’t have to look any further than this website. You can sell them anytime you like and the money will be deposited back into your bank account.
That’s it. It is that easy. You own your cryptocurrency. Stored in digital wallets. You can just sit it out and see in one year how your investment has grown (or disappeared). You can also send (and receive) from your account to other wallets if you like. But if this purchase got you excited there is a whole lot more to discover. Prepare yourself for going down the rabbit hole and enter a fascinating and complex world that touches every corner of society.
Monitoring your investment using this app
Unless you want to buy and forget it can be a lot of fun keeping track of the return on your investments. For that, I recommend installing the app called CoinCap. Download here for iOS and here for Android. It shows real-time prices of almost all coins and you can create shadow portfolios where you can enter your own positions.
Exchanges: buying other cryptocurrencies
You might have seen that on Coinbase you can only buy Bitcoin, Ethereum, and Litecoin. The crypto-coin-world is much larger than that and even though Bitcoin is still dominating, other coins are interesting as well. When you go to Coinmarketcap.com (great site) you see the different cryptocurrencies sorted by market cap. If you want to buy some of those coins you will have to dive one level deeper and move towards exchanges where cryptocurrencies are traded for other cryptocurrencies and no longer for Dollars or Euros.
The first exchange I signed up for was Poloniex – which is still one of the biggest. I would have stuck to that one only were it not for the fact that some coins are only tradable through specific exchanges and so, unfortunately, I could not avoid signing up for others too.
Exchanges work in a funny way that you have to first deposit some of your ‘standard’ cryptocurrency – such as Bitcoin – to your exchange-wallet before you can trade on their platform. The coins you then purchased are also stored on their platform until you transfer them to another place. Before long you end up having your coins all over the web on those exchanges. Make sure you don’t lose your passwords!! Another problem, but that I will explain later, is that leaving your coins there comes with a risk because when an exchange would get hacked there the possibility you loose your coins. There is no middleman like with your traditional bank.