The common theme I am running into is confusion as to what any of this stuff means, how these exchanges work and what they can do to get in.
This post will try its best to tackle it all.... wish me luck!
Why Bitcoin? Why Now?
The shortest and simplest way of putting it is 'The Man'! Big Banks have control of the printing and handling of the US Dollar.
Enough people got angry and smart enough and started perfecting a currency system based on math and some computer mumbo-jumbo(that is irrelevant right now).
This system was created by a still unknown man named Satoshi Nakamoto that resulted in the first instance of a blockchain, or a public ledger.
This means that no one person controls it as everyone can see every transaction that has taken place. And bitcoin can't just be printed at will, as only a set number will ever be made.
There is a documentary that may or may not still be on Netflix that does a MUCH better job of explaining the tech side called The Rise and Rise of Bitcoin. I suggest watching that or one like it.
tldr; Bitcoin is the first decentralized currency system that is by and for the people and not easily manipulated by a central entity.
I Bought My First Fraction of A Bitcoin!... Now What?!?
So you finally did enough research to convince yourself to buy a fraction of Bitcoin on Coinbase, Gemini, Kraken, etc.
Now that you have your Bitcoin and get to thinking: 'Well I bought this @ $19,000... In order for me to double my money it would have to hit $38,000 which could take forever'
or you've heard from your buddy about this other cryptocurrencies trading for pennies/dollars and you're thinking: 'I could have thousands of those rather than a piece of a Bitcoin'.
When you only have a fraction of a bitcoin the possibility of making a huge return on your money seems futile. If you come to this crossroads there are a few things to consider before selling your Bitcoin and diving head first into these lower cap opportunities.
Don’t let the current price of Bitcoin discourage you as the space is still new and has a lot of potential growing to do. Some analysts have it going to $100k next year.
Just because the price seems high and your fraction seems useless it can still potentially yield great returns as crypto is still young.
Close to 80% of the coins trading today will not be around in the long run as they do not have any real life use-case scenarios or value. They can just be pump and dumps schemes/scams propped up by people to steal your Bitcoin and leave you with whatever altcoin they created and dumped on you.
This article does a great job of explaining lower cap coins. A read-through is suggested before diving into any of them.
DO YOUR RESEARCH on any coin you decide to invest in and trade responsibly.
So you've thought about it and now you're conflicted as to how to proceed. Well you have options:
Option 1) HODL. Hold on to that fraction of a bitcoin for dear life and wait a few years and look back and see your fraction is now worth potentially thousands of thousands.
Option 2) CASH OUT. and forget any of this ever even happened as that is too daunting to think about and there is no way it will ever be worth that much.
or
Option 3) INVEST. your fractions of a Bitcoin into lower cap altcoins that are trading for dollars and pennies today with the potential to be trading for the price Bitcoin is today if not more!
Options one and three are both choices that i would consider. If you do not have the heart and tenacity for researching and keeping up with what is going on day to day with these lower cap altcoins I suggest option 1.
If you think you have what it takes to delve deeper in to the Wild Wild West of Crypto for those bigger gains then Option 3 and the rest of this article is for you!
Let's Buy Some Altcoins!
So now you've heard about these other coins but how exactly do you get to them?
Well there are many trusted Cryptocurrency exchanges being used.
My favorite exchange and the one I use primarily and will use for the sake of this article is Binance which can be accessed by clicking the name.
Click the logo to read my write up on why it has become my exchange of choice
Other Top Vol Exchanges Include:
Cryptocurrency exchanges like Binance differ from Coinbase in that the deal strictly in crypto and no fiat.
This means that the only way to buy coins on these exchanges are with other cryptocurrencies.
The markets available on Binance are: BNB, BTC, ETH, USDT*
*-UDST is not USD but a token that is tethered to the US dollar and is equal to 1:1 to USD. DYOR before touching any market obviously.
Now That I'm Signed Up How Do I Use This Exchange?!?
First thing to understand is that when you create an account on any exchange you are given 'wallets' for every coin that they sell which you can hold and send coins to from other wallets. Each of these wallets are given a unique address for depositing coins into. YOU MUST ONLY DEPOSIT X COIN IN X COIN's WALLET. IF YOU DON'T THE FUNDS WILL BE LOST. So if you are trying to send BTC to Binance from Coinbase make sure you are inputing the BTC address when doing so.
Also, you will want to eventually invest in hardware wallets to store your crypto off exchanges that can be bought online for the best security.Read HERE to find out more about securing your crypto.
Coinbase differs from these other cryptocurrency exchanges in that they act as a broker for it's users who are newer to crypto and don't necessarily understand or care to understand how to trade. This is why they are able to charge ridiculously high fees for their service. Once you grasp the concept of trading (which i will attempt to explain in this article) you can bypass their fees by using the trading exchange they use, GDAX.
On these other exchanges you are actively trying to buy or sell your crypto for somebody else's crypto at the best price available at that time.
On one side you have sellers offering their coins for various prices (best price listed first) and on the other side you have buyers wanting to buy X amount of coins for various prices (best price listed first).
The price that coin was last sold for is somewhere in-between what the buyers and sellers are asking for and that is the value attached to said coin.
Not the best explanation but easy enough concept to understand. The grind of trying to get the optimal price every time you trade can be daunting but if you become proficient with it after time and learn how to use the charts and order books to have an idea of where the price is headed, who knows you may quit your job and day trade for a living!... I wouldn't go putting in those two weeks yet though as the game isn't easy.
The great thing about the Binance Exchange (and many others) is that you don't have to worry about trying to set your order at the optimal price if you don't want to.
They have the option to make Limit Orders, Stop-Limit Orders and Market Orders.
Placing a market order sells your coin automatically for the best price available. This means that if you want 29 NEO at market price but the current sell order has only 16 then your remaining 13 will sell at the order price under that and so on until your 29 NEO order has been filled.
This option eliminates the stress of waiting for your open order to be filled and hoping that the someone picks up your order.
A Few More Things to Leave You With
- Yes CASHING OUT TO USD IS POSSIBLE and very simple honestly. In some cases you can even have your money in your account ready to spend same day!
Depending on the platform you use to cash out the process will be different obviously but Coinbase has limits depending on how verified your account is (the more they know about you the more money they trust handling for you)
On Coinbase generally speaking if you cash out through your bank expect your funds in ~3-5 business days and if you cash out through paypal you can have it instantly!If you are a long term player, like myself, and plan on riding the cryptocurrency/blockchain wave until it is the standard you will want to get a hardware wallet.
I suggest Ledger Nano but Trezor is also another popular one to buy. Exchanges boast great security but it still remains that when the coins are on the exchange you technically don't own them. The exchange holds the private keys. Taking control of your finances is the beauty of crypto and you haven't done that until you own the private keys.If you do decide to cash out for a profit realize there is no dodging Uncle Sam and he can and will come after his share if need be. It is smart to pay your taxes as the IRS keeps track of EVERYTHING. Learn more about how crypto is viewed in taxes HERE
DO AMPLE amounts of research before making any investment in any coin and trade responsibly. Getting in this game and seeing gains can entice you to want to go all-in or possibly over-extend yourself and this is not recommended. If you do not have the funds do not invest.
