Cryptocurrencies have been exploding recently. Meanwhile, the stock market continues to go up and up. People from all over the world are putting their money into cryptocurrencies. Rumors have spread about crypto being a safe haven when the stock market crashes and there’s speculation that the value could expand significantly. Then there’s the widespread speculation that crypto could see a big boost when various companies jump on board with it. For example, Ripple (XRP) is being used for transactions at some banks in Japan already, and American Express is working with Ripple. In fact, Ripple’s value has doubled in just the last week alone.
Through talking with several friends, I’ve discovered that there are some common misconceptions about this stuff. For example, some people, even those who are heavily involved in the stock market, have thought that you need to buy an entire coin to get started. And when you look at Bitcoin’s price today ($16,800), that seems like a major roadblock!
In reality, you can buy as little or as much cryptocurrency as you want. For example, you can buy $100 USD of a Bitcoin (0.00595 BTC).
We could speculate all day long about the direction this will go, but I think it’s safe to say we’re in the middle of a bubble. Until things shake out and all of the dust settles, we’ll never know exactly which coin or which blockchain technology will succeed. Bitcoin is referred to as a “junk coin” by a lot of people who have already gotten rich off of it. Not because they’ve sold it already and moved on, but because it’s simply not as robust or convenient of a coin compared to Ethereum (ETH) or some of the others out there. The technology behind Bitcoin is outdated. It was the first coin that started all of this madness, and with a market cap of almost $291B (yes, that is 291 billion, not 291 million), I don’t think it’s going to disappear overnight. Nobody knows. Bitcoin is used primarily as the conduit to move money in and out of the altcoins. So what’s an altcoin? It’s pretty much anything other than Bitcoin.
So, how can I get started w/ this stuff and what should I do?
First things first, you’ll need to transfer USD to one of the main coins (Bitcoin, Ethereum, Litecoin or Bitcoin Cash), which you can do by setting up an account on Coinbase.
https://www.coinbase.com/join/53a73d526c14424a9f000001
(That referral link gives both you and me $10 for signing up).
Coinbase for main account (you can buy BTC and ETH… LTC and BCH if you want).
The #1 recommended alternative exchange (from me) to buy alt-coins, which gives you a lot of options for alt-coins would be:
Binance
Sign up link for Binance:
https://www.binance.com/?ref=16187599
There are several others out there as well, including Kraken, Gemini, Local Bitcoins (LBC), CEX, Bittrex, Gatehub, etc.
Binance is a Chinese exchange, which scares me a little bit since cryptocurrencies were banned in China last year! Binance operates out of Hong Kong. China allows crypto companies to operate as long as their servers are not based in China, so Binance’s servers are in Korea.
I might suggest buying XRP Ripple on Binance, which you can buy w/ ETH. Ripple just became the #2 coin by market cap last week, overtaking LTC Litecoin. It’s rumored to be added to Coinbase soon, which could cause it to go up even more. American Express is using it and some banks in Japan have adopted it. It’s highly possible it will exceed Bitcoin’s market cap in the future. Here is an article from CNBC talking about another way to buy Ripple using Bitsane!
https://www.cnbc.com/2018/01/02/how-to-buy-ripple.html
Other coins to consider:
XRB RaiBlocks, growing fast. Recommended in December by my brother’s coworkers. Rumored to be added to the Binance exchange. When a coin is added to an exchange, it typically jumps up quite a bit. It went up 235% last week. It was up 13,250% last month. It’s one of the hottest coins right now.
You can buy XRB with BTC on BitGrail (initiate send BTC from Coinbase to BitGrail (first you find the address to send to in the Deposit section of BitGrail), confirm it has arrived, then buy XRB through the Markets section of BitGrail).
BLT Bloom, still very early stages. Goal is to combat the Equifax hack through providing decentralized control of credit. Using blockchain technology to protect credit & reinvent how credit scores are calculated! Absolutely fascinating.
Buying BLT Bloom tokens could take several hours to figure out how to purchase since I believe you need an ERC20 ETH wallet, even post ICO. You would buy it from ETH. Their ICO just happened on January 1st, 2018. The time you spend on figuring out how to buy it (post ICO) could be well worth it though. This is not a quick flip ICO coin! Right now, you have to go to one of the following exchange websites to buy it: IDEX, EtherDelta or RadarRelay. The developers of the coin are not focusing on getting it listed on exchanges right now. They’re developing the usage case for the coin. This is unlike a lot of the other coins that are ‘pretending’ to have great technology, but they are simply in it for the money, which I’m sure won’t last very long.
I used MyEtherWallet (MEW) to buy some Bloom tokens. You can transfer ETH from a non-ERC20 wallet, like CoinBase, into MEW before purchasing BLT. Again, this takes some time to get set up.
Bittrex and Gatehub are some of the other exchanges you may want to consider signing up for. I heard about these in 2017. Depending on what coins you want to buy, of course. Gatehub is ideal for buying Ripple! I tried to get on both of these, but there were some issues that I ran into, so I gave up on them temporarily. **Update: I was finally able to move forward w/ Gatehub – they require you to submit pictures of your passport though. This scared me a little bit, so I stopped w/ the signup.
To recap real quick, it’s better to decide what coins you want to buy first and then figure out which exchanges to buy them on. For example, I believe RaiBlocks (XRB) can only be purchased on BitGrail right now.
The COINCAP app on your phone tracks the value of every coin out there. There are a dozen other tracking apps out there. Since there are exchanges and coins all over the place right now, it can become hard to track the value of all of your coins. You can use an app called ‘Blockfolio’ to do this if you want, or you can just document everything on paper somewhere. Just be aware of what price you buy in at.
Coinbase has a nice app to download. To get the 2FA (2 Factor Authentication) to work, you need to download the Google Authenticator app on your phone. When it asks to get 2FA going, they will provide a QR Code. Scan it with your phone and it should open up Google Authenticator automatically to add the code for the exchange.
Final tips:
To save some money on the fees from Coinbase, you can buy/sell through GDAX. If you have a Coinbase login, then you automatically have access to GDAX since GDAX is Coinbase’s back-end. Do a Limit or Stop order on there (not a Market order) and there are no fees for the transfer. I would highly recommend leveraging the Limit orders since they aren’t subject to slippage. This is convenient when you are transferring one currency to another, especially to/from USD. GDAX can be a little confusing at first. I’d look on Google or YouTube for “How to use GDAX” and there’s probably lots of good info. available by now.
It took me awhile to figure out that Deposit/Withdraw is separate from Buy/Sell. There is a daily transfer limit ($10,000) from certain exchanges, like Coinbase, for Deposit/Withdraw. You can Buy/Sell as much as you want at anytime though. Keep in mind that the Deposit/Withdraw area of most exchange websites is separate from the Buy/Sell area. The Buy/Sell area is often called “Market” or “Exchange” or something like that.
A good hardware wallet to purchase in order to protect your coins is the Ledger Nano S if you start to get more into this. I have one that just arrived the other day, but I have no idea how easy or difficult it will be to use yet. However, I would only recommend a hardware wallet if you’re collecting more and more coins and gains and you’re paranoid about having the coins stolen – ie- if an exchange goes bust or gets hacked, which can definitely happen. Otherwise, you can just keep your coins on the exchanges (Coinbase, Binance, BitGrail, etc.) themselves.