A step by step guide to cut through the noise and help you get started.
If you follow technology, news and investing in general, chances are high you must have come across several articles talking about Cryptocurrencies and bitcoins in particular.
With the interest in Bitcoin surging with every passing day( just like its value, it has risen 7000% since 2011), more and more people are sitting on the fence waiting to get started and deep dive into the world of CryptoCurrency.
How many times have you come across facts like:
Time and again facts like these may be discouraging to the extent that people feel, they might have missed the bus. But, if you get started today you might have a similar story to share in a few years time.
As the saying goes:
“The best time to buy bitcoin was 8 years ago. The second best time is now”
If you are completely new in the world of crypto, it is highly recommended to familiarize oneself with a top-level understanding before getting into trading.
Wikipedia defines bitcoin as:
Bitcoin is a worldwide cryptocurrency and digital payment system called the first decentralized >digital currency, as the system works without a central repository or single administrator. It was >invented by an unknown person or group of people under the name Satoshi Nakamoto and >released as open-source software in 2009.The system is peer-to-peer, and transactions take place ?>between users directly, without an intermediary.These transactions are verified by network nodes >and recorded in a public distributed ledger called a blockchain.
Is it still hard to understand what the heck is a bitcoin and why people are going gaga?
You can follow the below links to get an in depth understanding, in the most basic way possible:
Explain bitcoin like I am five
Explain bitcoin in layman terms
Now that you are aware of what the hype is about when it comes to bitcoins and Cryptocurrencies, it may be a good time to get your hands dirty.
As you read this, one bitcoin is roughly INR 5L( ~$7637)
The first thing that comes to mind seeing this number for most people is, I can’t spend 5L(~$7637) to invest into something that may give me high returns or lose the entire investment.
Did someone tell you that you can start by investing as low as INR 1000($ 15.27)?
Most of the people get stuck when it comes to deciding which is the simplest way to get started.
Let’s make your life easy :)
When you are looking to buy bitcoins( Satoshi’s) someone should sell it.
This means you need a trading platform.
Everything that you might have heard when it comes to platforms( Coinbase, Unocoin, Zebpay etc) are basically trading platforms through which you can buy/sell bitcoins and other cryptocurrencies.
Second thing to know(again easy to understand) is just like you do your bank transactions wherein you need to have a bank account and other person’s account to do any transaction, similarly with Bitcoins the first thing you need to do anything is to have an account, which in the crypto world, is your wallet address.
Below is how you can create your own Bitcoin wallet address( akin to a Bank account)
Just like you can choose the organization you want to bank with( HDFC, Axis, ICICI etc) you have the choice to go to any platform and create an address( Unocoin, Zebpay etc).
Let us run you through the process on Zebpay( Download the app from Google Play or App Store)
This is your first screen after going through the introduction. Put in your name, upload a good looking picture of yourself and save.
After saving the above, you can go back and this is what you will see. This is a stage which is similar to bank taking in your application for account opening but the application has not processed yet. You know you will have an account, but can’t do much right now.
If you try pressing buy on the second screen, this is what you will see. To start trading Bitcoins you need to verify your account. It is a KYC( Know Your Customer) process that is mandatory to follow.
As a part of the verification process you have to verify your email, put in PAN, Bank and Aadhar details. Once you have completed the four step process, your account(address) will be ready in 24 hours.
Within 24 hours you are ready to make your first bitcoin transaction.
In the real world terms which we are familiar with, you can co relate it with having a Bank account( the details such as bank name, IFSC, Branch etc are with you) and you are ready to fund your account or do a transaction to other bank accounts.
In this case: You will have an address in your profile section which is something like
This is your details( everything you will ever need) to buy or sell bitcoins. If someone wants to send you bitcoins, copy the address and send them. Just like bank transactions, once they have the address they can make a transaction to you.
Your address is ready, now let’s finally buy some bitcoins(satoshis)
You come back to your home dashboard. Can you see deposit and withdraw buttons?
Before pressing the buy button on top, your account needs to have sufficient balance.
You can fund your account using the deposit button.
You could very well do INR 1000 instead of 10,000 or any other amount.
Your account is loaded, you have an address and no one can stop you from owning bitcoins or satoshis from here on B-)
Let’s press the buy bitcoin
You funded your account with whatever amount( INR 1000 or INR 10,000) you can buy bitcoins of the same value. As you can see if you are INR 10,000 worth then you will get 0.02037336 BTC or 2037336 Satoshi at the current value of INR 4,90,837
We are excited too B-)
Because you may not own 1 bitcoin( right away), in real terms you have 2037336 Satoshis :)
Zebpay would also allow you to keep a track on how the market is moving with respect to bitcoin price so that you can buy more or sell accordingly.
[Want to know why the price fluctuates?](https://support.coinbase.com/customer/portal/articles/1834921-why-does-bitcoin-change-value-why-is-the-price-so-volatile-)
Let us end this with a few notes that are important to know especially since you now have a headstart in the world of cryptocurrencies:
We took bank’s example to help explain the process. The whole bitcoin/cryptocurrency is built on removing middlemen/organizations(bank) who control your current financial transactions. You will know more as you keep digging deeper.
You will be served better if you don’t treat this as get rich quick scheme. Rather if you treat this as an instrument that may take over the world some day( if everything goes well) and you want to have a piece of the pie when that happens
Finally, the best way to look into this is to think of having made an investment( and may be some more) into a new technology and a chance to know/understand more of how the system works. Beyond all the hype.
If this is the case, show some love and spread the word among your friends :)
If you want to know more, follow us as we come out with a series highlighting every aspect of investing in bitcoin and Cryptocurrency.
Drafted with love by Nagesh Bansal and Prashant Sharma
PS: We are not investment advisors( whatever we detailed above is based on our experience), it is only you who will always be responsible for every investment you do. We are also not associated with Zebpay in any way and used it as demonstration here as it is easy to understand.