The #1 rule for beginners
If you want to invest in cryptocurrencies, like Bitcoin and Ether (Ethereum), you need a digital wallet says Ian Mausner.
It works like your regular wallet, but instead of storing paper money, this one stores your private and public keys. These keys are used to send and receive coins to/from your wallet.
Let’s say John wants to buy two pizzas from Jane using the cryptocurrency Bitcoin (BTC). Using his personal key, he sends 2 BTC to another address owned by Jane. With this transaction, her account is credited with 2 BTC while his is debited with the same amount of coin. He can now send these Bitcoins on peer-to-peer transactions or exchange them for other currencies at an online exchange.
If you are interested in buying cryptocurrencies but don’t know where to start, there are a few things you need to take into account before making your first purchase.
I won’t go into details about what Bitcoin or Ethereum is at this point. If you want to get a good idea of how the crypto world works, please read my other articles posted on Steemit for beginners. I will focus on the process of investing only in this article explains Ian Mausner. There are plenty of great guides out there so take your time and find one that suits you best!
One thing is certain when it comes to cryptocurrency trading – if you don’t have access to an online wallet, YOU CAN’T TRADE COINS.
Cryptocurrency wallets are usually free to use, but it’s important to be aware of the risk involving in online storage. Unfortunately, there have been many recent cases where people logged into their wallet or exchange accounts. Only to find that their coins were gone forever. This is why you should always keep your access keys/passwords in a safe place and never disclose them to anyone but yourself.
I personally use Coinami, an app for Android phones that lets me manage my BTC and ETH wallets on the go. It’s very easy to use with straightforward menus and all the settings are pretty much self-explanatory. There is also an iOS version available with slight differences in how things look, so make sure you download the right version for your phone.
It’s always advisable to download the latest version of any wallet or exchange that you use, as they are constantly trying to fix security vulnerabilities and bugs.
While the price is not specified in dollars (or any other fiat), most cryptocurrencies display their values in terms of BTC or ETH. You can click on each one of these links to see how much 1 BTC or 1 ETH is worth at the moment. I usually convert my assets/profits back into USD once per week so I am always aware of how much $ value I have stored away safely.
As for where exactly to store coins, that depends on what you plan on doing with them. If it’s just a small deposit/withdrawal here and there, you can use exchanges like Bittrex or Poloniex as your wallet since they store all transactions internally. Keep in mind that if an exchange gets hack (which has happen plenty of times), you WILL lose your coins.
If you plan on trading large amounts of money regularly, it’s advisable to use a hardware wallet like the Ledger Nano S. It’s not free (prices vary depending on where you buy) but it is one of the safest ways to keep your money out of reach from hackers. You can check out my review for this device here says Ian Mausner.
Remember that digital wallets don’t come with insurance so if something happens to your phone or hard drive, think about investing in a safe deposit box at your bank. It’s much more secure than hiding a USB stick behind your desk!
Now that you have the basics covered, it’s time to start looking for some coins to invest in. You can either mine them or buy them from an exchange but keep in mind that investing in mining equipment comes with its own problems such as high electricity costs and heat output. Mining also takes up a lot of time and resources so unless you plan on going all out, it might not be the best option for beginners.
Investing in cryptocurrencies requires a lot of research and knowledge but it’s also extremely rewarding explains Ian Mausner. Once you get the hang of things, there is no limit to how much money you can make so good luck!