If you’ve been by the water cooler over the past 6 months, you’ve no doubt heard about the Cryptocurrency boom. If you’re impressed by all the “mass gainz” Joe from accounts is making, and are a little bit envious but are unsure how to get in on the action, hopefully this guide will be of help to you.
To get started you’ll need a computer, some cash, and proof of identity should an Exchange require it (the good ones will).
Exchanging your cash for Cryptocurrency
The first step to entering the Cryptocurrency world is to find an Exchange that handles the transfer of your real-world money (“fiat”) into Cryptocurrency. There are quite a few on the market, and while I won’t detail them and how they differ, I will call out some of the more common players to get you started.
The following Exchanges allow you to transfer from your bank, or make use of a debit or credit card.
Coinbase is one of the biggest Crypto Exchanges on the market and have customers allaround the world. Established in 2011, Coinbase trade the “big three” coins (Bitcoin, Ethereum, and Litecoin) against your currency.
eToro is a London based Exchange, who have had a presence since 2007. They also have a cool demo trading account with $100,000 for you to test your trading skills before doing the real thing. eToro also accept PayPal payments. In addition to the three coins listed above, eToro also allow you to trade Forex as well as other more popular Crypto coins (ie. DASH, Bitcoin Cash, and Stellar Lumens).
Paxful is another enterprise that offers up a plethora of funding options. You can trade near anything for Bitcoin, Monero, NEO, or whatever your heart desires. You can even trade your Amazon gift cards for Crypto!
There are many more that I have not listed here, if you’d like to do some further reading, there are Exchange address books online (such as bestbitcoinexchange).
Example 1 – Buying Litecoin [LTC] through Coinbase
If you’ve signed up to one of the above Exchanges, you should have verified your identity and included a means of payment, ie. Credit/debit card, Bank transfer, PayPal.
In my example, I will be using fund my Coinbase wallet using my verified Australian credit card, and procure the equivalent of $100 AUD in LTC.
- Login to Coinbase
- Click Buy/Sell
- Select Litecoin while the Buy tab is active
- Type the amount in fiat currency you wish to spend (in my case $100 AUD)
- Select Buy Litecoin instantly
- The confirmation page then pops up. I note that .4881 LTC I am being offered after fees, is around $95.96 AUD when I check the exchange rate, so we’re talking near 4% after the changing of hands.
- Click the confirm button
- Once the payment has been made, view the LTC area of accounts and I see the .4881 Litecoin sitting in my Coinbase Wallet (check the Accounts section and select your coin).
At this point I am now the proud owner of nearly half a Litecoin.
Storing your coins securely in a Crypto wallet
Now that you have signed up and, been verified, and hopefully purchased some Crypto, the next step is to store your coins somewhere safe. There are many options here, and it really boils down to what wallets are on offer for which particular coin you may want to hold.
A Cryptocurrency wallet comes in many forms. For the most security-conscious folk, a
hardware wallet is best. Considered “offline storage”, these are usually plugged into a USB port on your computer. Some examples of hardware wallets include the Ledger Nano S, Ledger Blue, the TREZOR, or the Keepkey. It is important to note that these wallets only support the coins that they have been programmed for.
Each manufacturer continues to add new Cryptos regularly based on demand, so updating firmware on these devices is encouraged.
A Desktop Wallet is a wallet that you install on your computer which allows you to create a local address and send the funds to it. Please be aware that some wallets require you to fully synchronise the entire “blockchain” locally. This can take days in some cases – with some blockchains consuming 100’s of GB’s of data! Not only will you need to synchronise this data initially, but you will need to keep the wallet open and syncing for it to stay current.
Wherever possible, look out for Electrum based or “qt” suffixed Desktop Wallets. These do not require a full synchronisation of the blockchain, and are more forgiving to those of us who wish not have a computer running day and night. In my next example, I will be using a Litecoin Electrum wallet (found here), and sending the funds to my home computer.
There are also web and paper wallets available. Web wallets are digital wallets hosted by a 3rd party in the Cloud, and can be accessed anywhere that has the internet. The downside to web wallets would be trusting the security of your precious coins to somebody else. For some, this is OK, and there are some reputable services out there.
Paper wallets, like hardware wallets, are an offline storage off your private key. Only when you need to transfer funds to and from your public wallet, are you to refer to your private key on your printout. These printouts could be stored offsite away from your home in a safe somewhere (for that extra piece of mind!). I will be writing a tutorial on a paper wallet to store Crypto in the not to distant future, as I believe they are priceless.
Example 2 – Sending LTC to a Desktop Wallet
I’ve run through the installer of the Litecoin Electrum wallet and opened up the program.
- Click the “Receive” tab to see one of your local addresses
- Copy the Receiving Address to the clipboard
- Head back to Coinbase and click Accounts
- Click on the LTC Wallet
- Press the Send button
- Paste in your local Receiving Address that you copied in step 2
- Select the amount you wish to send (in my case Max)
- Confirm (and enter 2-factor authentication code if required)
- After a few moments, head back over to your Desktop Wallet and you’ll see the funds are there.
Note: depending on the coin you’re sending this may take some time. Litecoin is very quick, however some coins like Bitcoin often take time to show up.
Welcome to Crypto you new age Warren Buffett you
Congratulations on signing up to an Exchange, converting your cash for Crypto and sending it to your wallet. Now all you need to do is sit back and wait for your millions to come in like the rest of us!
Be sure to keep a watch on the market through a site like CoinMarketCap, and it helps to keep up to date by reading announcements for the coins that you are vested in today, or might be tomorrow. You can get these announcements through all the right social channels like Reddit, Discord, or Facebook.
If you want to continue further down the rabbit hole, I will be detailing some cool stuff in future tutorials like Alt Coin trading using a Crypto-to-Crypto Exchange, Paper Wallet setups, and heaps more.