Fun Topics: 3 Easy Steps To Buying Bitcoin or Altcoins

–Disclaimer: I receive commission from some of the affiliate links on this post. However I promise to only promote products that I actually use and products that I actually believe in 

Unfortunately due to Holiday madness I haven’t had the time to write on this blog like I used to. One thing that I have been absolutely enthralled with these past few weeks has been investing in cryptocurrencies. I started three months ago and have seen some crazy returns that can’t be matched by any other investments. Granted, I had just started my fulltime job so a 100%-200% increase of a thousand dollars, is just another thousand dollars. Still even as a business guy with a very limited technical background, I’ve become the crypto guy amongst my coworkers and I’ve helped a few start investing already. I wanted to take some of this knowledge and put it on my blog to help anyone else who wants to get started.

Important Warnings:

  1. Don’t be an idiot. Use only spare money that you are willing to potentially lose. Yes three months ago when I started, I could have maxed out my credit cards (~$30,000 credit line) buying bitcoin (~7.5btc) and today I would have enough money to pay off my student loans + credit card debt + a lot of extra money (7.5btc would be $140,000 at the time of writing). DON’T THINK LIKE THIS. Yeah it’s a fun thought experiment and I have slight regrets but that is such a dangerous game. Trust me I work in financial services, credit card debt is a slippery slope and if btc crashed I would be shit out of luck.
  2. Do your research. The only times I have lost money investing in crypto is when I bought coins based solely on the recommendations of others. If you are not a techy person the easiest way to gather insights is to go to the reddit pages of different currencies. For example, https://www.reddit.com/r/Ripple/.BE WARNED, these subreddits often become echo chambers of people who believe in the coin. My rule of thumb is look for skeptics or people asking questions about the technology and see the responses. You can learn a lot about things by hearing what people say on the defensive. If you think there is a valid usecase for this coin. If you think the partnerships the coin has are great. If you think the community actually knows what they are talking about consider buying the coin.
  3. LONG TERM THINKING. Like all investments, you are not going to get rich overnight. Even the bitcoin millionaires <20 years old like this guy,  invested in 2011 (6 Years!). They made a gamble and it paid off in the long term. Had they sold their coins when it went from 10 dollars to 20 dollars, or 10 dollars to 200 dollars, they would have nothing.
  4. BE SAFE. Crypto is subject to a lot of dangers online. The modern exchanges like coinbase have had no security issues, but they have happened in the past. Google MT Gox hack and you will hear horror stories of people losing their fortunes because the exchange got hacked. The general rule of thumb is if it’s connected to the internet it can be hacked. Even I have to be very careful with this so I am only sharing screenshots that have no personal information on them.There’s too much to cover on crypto safety so here are some good resources. Once again rule #1, don’t put your entire life savings into this. Put as much as you are willing to lose like a casino.
    https://www.wired.com/story/how-to-keep-bitcoin-safe-and-secure/
    https://bitcoin.org/en/secure-your-wallet
    https://www.coindesk.com/information/paper-wallet-tutorial/

Step 1: Buying Your First Coin

The tried and true method for anyone in the states to buy your first coin (or partial coin) is coinbase. It’s one of the most trusted and longest running ways to buy Bitcoin, Ethereum, and Litecoin.

Coinbase UI
Very clean and easy to use interface

 

If you use my referral link and buy $100 of crypto currencies we both get $10 of btc!

https://www.coinbase.com/join/59aac9b9d26ede00d72f401d

When you register an account you will have to verify your identity which may take upto two weeks. It used to be much shorter, but due to insane demand Coinbase has been flooded with requests so they may take longer now.

Once verification happens it’s time to buy and sell coins! The UI as you see below makes it super easy. All you need to do is add a credit card/ bank account (I recommend bank account for less fees) and you are set to go.

Coinbase buying and selling

So at this point, the easiest way to keep playing the crypto game is to treat it like the stock market. Buy low, sell high. In our current market you could make a solid return by just holding the coin (aka HODL in the crypto community) and treating this like a long term investment. If you want to day trade, I don’t actually recommend coinbase. Coinbase has insane fees sometimes a few dollars for buying coins so it doesn’t make sense to day trade when fees are that high. ALSO coinbase takes a few days to actually give you access to the coin.

I still recommend this for beginners as it’s by far the most time tested option. Most exchanges have had issues especially during peak demand seasons, while coinbase has had relatively fewer technical problems. Coinbase also makes the process incredibly simple. You don’t need to worry about the fancy trading terms like limit orders. It’s a simple here is the price, do you want to buy?

Step 2: Daytrading

Some people stop at stage 1, which is perfectly ok. For the riskier traders who want to maximize their gains, daytrading is the riskier but more lucrative option. To start day trading bitcoin and ethereum there are a few different exchanges. I personally use Gemini and many of my friends use Gdax (also from coinbase).

https://gemini.com/

For the sake of personal security I’m not going to show screenshots of my account but I have been using Gemini since October, here is a very hastily edited screenshot of my transactions.

Gemini Exchange Transactions

As you can see you can buy bitcoin/ ethereum with your bank account like coinbase and you can sell very easily. The buying and selling is like the stock market where it is not instant. You buy/sell at a certain price and if there’s enough people doing the opposite your order is filled. For volatile markets like crypto it can be a little tricky to get right. But after the first few trades it makes a lot of sense.

To get started create an account and just like coinbase verify your identity. This might take a while given the high demand but I have had no issues with Gemini for the 3 months I have been using it. Finally buy some coins on Gemini with their pre credited bank transfers or read below to see how to send coins from coinbase into Gemini.

Step 2.5: Understanding How to Send Cryptocurrencies

The beauty of cryptocurrencies is that it should be easy to send to anyone in the world. This did lead to its unsavory correlation with shady illegal activities, but remember that was only the early days and most of the big sites got shut down YEARS ago.

To send cryptocurrencies it’s literally a few buttons to click.

  1. Go to the place you want to put coins into (an exchange, coinbase, your own wallet, etc) and get its address. For coinbase it looks like this
    The receive button!

    Hit the receive button to get your unique btc address.
    Copy this using copy function (NEVER COPY BY HAND)

  2. Go to the place you want to send coins from and look for a send or withdraw button. On binance it looks like this
    This is when I press withdraw on binance

    Label: Just a tag for yourself. You can write something like Coinbase
    Address: This is where you paste your unique btc address

  3. Submit and wait a while. Most exchanges like binance will give you an option to check on the transaction as soon as you submit. There are sites dedicated to tracking transactions and most of these transactions will take 30min – a few hours depending on the coin. Currently ethereum and ltc are the faster coins for transactions than bitcoin.

IMPORTANT TIPS:

  • MAKE SURE YOU ARE SENDING TO THE RIGHT ADDRESS. Every exchange will warn you if you send the coins to the wrong address it is lost forever. Copy + Paste are pretty much guaranteed to be right, but if you are worried take a second and double check some of the letters.
  • MAKE SURE ITS THE RIGHT CURRENCY. If you are in a mad dash to transfer coins there’s a chance that you might send btc to an eth wallet. Once again this is devastating and like throwing the coin away. DOUBLE CHECK that you are sending the right currency to the right wallet.

Step 3: Alt Coins

So now that you’ve made your first few hundred bucks you might be thinking “HOW DO I MAKE MORE?.” I was in that stage as well especially when you look at btc with a price of $19,000 most people are not going to get rich off btc if they just joined the game (unless you invest A LOT). For new people like me, alt coins have a bigger potential long term growth. Think about it, if I buy a 1000 coins of something at 20 cents (total $200) in a FEW years, what if that coin jumps to $50? Boom $50,000 for a mere $200.

OF COURSE THE CAVEAT IS THIS IS SUPER RISKY. ESPECIALLY IF YOU DON’T UNDERSTAND ANY OF THESE COINS.

SO ONCE AGAIN. USE ONLY MONEY YOU ARE WILLING TO LOSE.

The other way to look at this is that if you are just having $200 sitting in a terrible savings account with 1% APR, you are losing money to inflation at 3-4%/year. If you have this extra money it’s definitely not a bad idea to try picking some alt coins for a long term investment.

To get started just like Gemini we need to use an exchange, my go to favorite is binance.

Binance UI

If you enjoy my guide consider signing up to binance with my referral link

Personally I think they have an incredibly easy to understand UI and one of the most recommended exchanges in the alt coin community. Just look up “how to buy xyz coin reddit” and most people will recommend binance.

I have also had no troubles with depositing and withdrawing my coins from this exchange so no complaints on that end. Below is my personal transaction history so you know I’m actually using Binance as well. I haven’t been doing much day trading as I see these coins as long term investments so I have just been buying to HODL.

Some important tips using Binance

  • Use ethereum over btc to trade: Right now bitcoin is incredibly expensive to just send to yourself from one exchange to another. Not only is it slow b.c of all the new transactions, sending any amount of btc to yourself will cost $10-$15. It doesn’t seem like much when its only .000x btc fee, but the high price of btc has made that tiny fee expensive. Ethereum or LTC is a cheaper option and they take a shorter time to transfer from exchanges.
  • BNB To Pay Less Fees: Binance has incredibly low fees when making trades. Usually its .001% of the trade so if I buy 300 of a coin I pay binance .3 coins. You can cut this in half by buying BNB coins and paying the equivalent of .15 coin (in BNB price). Personally if you are not doing serious trading you don’t need to get this, but it is an option.
  • Some coins are having withdrawal problems due to the network issues (not Binance). For example, Iota is easy to buy in Binance but you can’t withdraw it due to network issues. It’s a new coin so I’m sure it’ll be resolved in a few years. Google beforehand if you are worried and want to move coins immediately.

Bonus Step: HODL, Daytrade, XYZ Crazy Strategy, Just Remember To Be Smart

If you followed the steps up to here, chances are you now have some cryptocurrency and you are setup to hopefully make some money. Overall I am pretty bullish on the cryptocurrency market as I personally do think the financial services industry has needed change for years. Before my time working at a bank, I also worked at Visa and it was mind blowing how much money they make for just facilitating transactions. If any of the crypto currencies can cut out the middleman, I think we’ll have a very different financial landscape than we do today. Also despite what people think, I think we are early adopters even if you buy beginning of 2018.

Do your research and have fun! (Just don’t do anything stupid PLEASE)