2018 will be a huge year for Cryptocurrencies and right now is a perfect time to begin investing in the future of these digital platforms. I'm under the presumption that most people reading this already have an idea of what cryptocurrencies, the blockchain (not essential) and bitcoin are, if not I'd recommend a documentary called: Banking on Bitcoin. This post is to help you get your shoes on so you can begin trading and making money trading cryptocurrencies. I would have loved to come by an article like this when I first began but cryptocurrencies were still very new.
So lets get right into it, the first thing you'll want to consider is a ledger wallet AKA cold storage. A ledger wallet is basically a small USB that will help you store your digital currencies externally from your computer, its impossible for a hacker to gain access to your USB as long as its unplugged from your computer. With a rise in trojans containing viruses like keylogs which let the hacker gain access to your private information and passwords, safety and security become the name of the game in the crypto world. You want to ensure you keep all your assets secure and away from such potential hacks. Of course the crypto world has seen a surge in businesses focused on making more secure "cold storage usb wallets". don't become overwhelmed, most will get the same job done. A Ledger wallet (cold storage) will cost you anywhere from 30$-200$ USD depending on how many features you wish to have. Obviously if you've got a wealthy portfolio it would be better to invest in a quality wallet, but you can also get ones just as good for cheap. A couple worth noting are the Trezor (89€ or 130$ USD) which can be located at https://trezor.io/ and also the Ledger Nano S (50€ or 70$ USD) (Which I currently use and can be purchased at https://www.ledgerwallet.com/.
Now, hard wallets are not essential but I would definitely recommend investing in one, if you have your money on an exchange and the exchange is hacked, you can potentially lose all your assets, in a decentralized platform one can only imagine the task of finding and refunding what you've lost (you can look into Mt.Gox if you want a good horror story). You can leave your money on a digital wallet which are more secure against potential hacks than an exchange, a great one i would recommend is called Exodus, found here: https://www.exodus.io/. Beautiful easy to use UI, you can use this onscreen wallet as a place to send all of your assets when your finished trading on an "exchange". You will be given an address (long series of numbers and digits) which you will use to transfer and receive funds.
Before we dive into the topic of exchanges, it's important to note how important it is that you write down all your account recovery words and passwords for each account, if you happen to lose your account it's your only form of recovery. Also you will have so many different accounts for your wallets and exchanges, it would be a good idea to use different passwords and usernames so that a hacker doesn't have access to all your accounts if they obtain your one username and password. With that out of the way, lets begin, When it comes to exchanges, you have many options but there are two different types you must grasp. There are "Trading Exchanges" and "Fiat Exchanges". Difference is, one exchange is meant for trading and the other is used to purchase a cryptocurrency to trade with. Some "Trading Exchanges" worth noting; Bittrex (I use this, very popular aswell easy clean UI). Poloniex (Lots of alt-coins - clean easy to use interface). Bitfinex (Highest volume exchange in NA) and last but not least, Kraken. I'd recommend using any four of these. Now these are not exchanges that you can buy bitcoin with fiat currencies. If you're looking to purchase bitcoin/ethereum or tether to begin trading you want to visit a "Fiat Exchange". there are few good ones I will list off, first being the one i use; QuadrigaCX https://www.quadrigacx.com/?ref=uqtm7i6ttirod1pyx294snhf (my referral link). Quadriga can have a lengthy verification process (3-5 days) but it has low fee's and great security. To verify your account on Quadriga you'll need to send them a picture of yourself with your bank statement, and also one with your ID. This is a safety feature they use to make sure they're not swarmed with bots and fake accounts. I currently use Quadriga to purchase my bitcoin/ethereum, you can purchase bitcoin/ethereum from quadriga using plenty of different payment methods, for large amounts I'd recommend bank wiring (no fee) but if your looking to play around with small amounts, i would recommend e-transfer, they're instant and only fee you 5%. Coinsquare is also a good one with a quick verification process, downside is they'll hold your money for a few days, another one is Gemini and I've only heard good things with this one. Of course there are many others but QuadrigaCX and Coinsquare have processed and held some big transactions of mine so they have my trust.
The only currencies you can have on "Trading Exchanges" are Bitcoin / Ethereum / USDT (aka tether, ill talk about this later). This means if you spent 1 bitcoin to buy 1000 shares of coin "ABC", you cannot trade that 1000 "ABC" for coin "DEF". You can only trade back into bitcoin. Which brings me to a valuable point you need to understand. These trading exchanges compare the price between the "ABC" coins price and bitcoins price, to put it simply, if you're trading "ABC" coin, you're trading against Bitcoin, you want your "ABC" coin to outperform bitcoin so you when you sell your "ABC" its increased valuable will give you more bitcoin back. Everything follows bitcoin in a sense, if bitcoin is going up, most traders change their focus to bitcoin resulting in a dip in altcoin prices. It may seem complicated but the exchanges have actually simplified the conversion for you and you'll be glad they did. If you want less fluctuating trading you can trade with tether. Tether is equal to the US dollar, the company was bought by Bitfinex earlier this year and always has a price maintained at 1$ to allow you to exit the crypto markets for a while if you so wish to.
So far we've covered hard wallets for storing your assets securely away from your computer, discussed exchanges, the two different types and ones i recommend. This is all you need to know to begin trading with cryptocurrencies, below I'm gonna list the order of steps I took for the entire process if you wish to replicate.
- I purchased a Ledger Nano S from their website
- I made an account on QuadrigaCX - sent in my identification documents to begin the 3-5 verification process
- I used this time to create an account at bittrex and also an account for my digital wallet (Exodus) - aswell I added 2FA (essentially a second password to all my accounts created so far) Also, I wrote down all my passwords and catch phrases incase i need to recover my account.
- When QuadrigaCX had finally verified my account I decided which crypto currency I wanted to trade with. I chose bitcoin and purchased a good amount.
- To avoid the fee's of sending crypto to exodus and from exodus to a trading exchange, I decided to send my bitcoin from my QuadrigaCX straight to Bittrex (Trading Exchange)
- I received my Ledger Nano S - I created my account for my cold storage wallet
- After trading that week I sent a large portion of bitcoin to Exodus and then transfered onto my Ledger Nano S. I plan on holding this bitcoin for the long term so it will sit on my cold storage for some time. you want to try and reduce the amount of transferring you have to do so not not swamping yourself with fees.
I hope you've been able to gather a few positive things from my article. I appreciate feedback.
If you are so generous as to want to donate to me here are my links:
BITCOIN: 19eW7Ky7fx44UbC7hguN6LDpV9phVNaZ25
ETHEREUM: 0x4F86181fF287e7c9654DDb0b930e4b170430bff7
LITECOIN: LcLhnQKnVg3TX6bCAGXEN46RjGKa7cDU
OMG: 0x4F86181fF287e7c9654DDb0b930e4b170430bff7
QTUM: 0x4F86181fF287e7c9654DDb0b930e4b170430bff7