Have you been thinking of investing in Bitcoin(BTC), Ethereum (ETH), Litecoin(LTC) or other Altcoins but you don’t know where to start. This is a quick guide that will provide you with the necessary information on the basic terminology you need to know and good exchange to purchase cryptocurrency.
Some Basic terms
Bitcoin Mining: Is the process by which transactions are verified and added to a public distributed ledger, known as the block chain, and after which new bitcoin are minted [2].
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Wallet: This is a digital account with an anonymous address for storing cryptocurrencies. Wallet can either be online or offline.
Exchanges: These are peer-peer platforms for purchase, sale and trading of cryptocurrency.
Fiat Currency: Is a money that is declared by a government to be legal tender such USD, EURO, GBP etc. Its value is based solely on the faith and credit of the economy [1].
How to Buy Cryptocurrencies
There are so many exchanges to buy cryptocurrencies but only handful exchanges allow you to buy cryptocurrencies using fiat currencies. To buy cryptocurrencies, you need to sign up for an account with online exchange. There are two types of online exchanges:
- Crypto – Crypto Exchange: These are exchanges that only accept cryptocurrencies to be deposited and allows you to buy other Altcoins using mostly BTC. Example are: Poloneix, Bittrex, Bitfinex, BTC-e etc.
- Crypto – Fait Exchange: These are exchanges that allow you to use fiat currency to purchase cryptocurrencies. Examples are: Coinbase (for BTC, ETH and LTC), Bitstamp (for BTC and XRP).
I will recommend that newbies in the cryptocurrencies world start with Coinbase or Bitstamp to buy Bitcoin, Litecoin, Ethereum, and Ripple using fiat currency. The first basic the step is for you to sign up and complete the verification process to start buying and selling on either Coinbase or Bitstamp. These two exchanges are user friendly and easy to use. Also, you can earn a bonus of $10 worth of Bitcoin by signing up using my link (https://www.coinbase.com/join/5819ffebdee0162b8fb83f24 ) and after purchasing BTC, ETH or LTC worth $100. Then, you can also invite your friend and keep earning Bitcoin bonus of $10 from Coinbase once your friend join and buy $100 worth of cryptocurrency too.
However, Crypto – Crypto exchange requires you to first purchase cryptocurrencies from crypto-fiat exchange. Then, send the crypto-currency to crypto-crypto exchange before you can purchase other Altcoins that are not available for purchase using fiat currency.
For further information, I refer readers to: http://www.coindesk.com/information/ and
https://www.bitcoinmining.com/
References
- Fiat Money http://www.investopedia.com/terms/f/fiatmoney.asp#ixzz4kIbIxIOW
- Bitcoin Mining Definition | Investopedia http://www.investopedia.com/terms/b/bitcoin-mining.asp#ixzz4kIpDsHae
