The buzz of cryptocurrency and blockchain and it is only growing. It is spoken almost on a daily basis on your local news channel to your friends’ social media posts. But before making any actions within this economy, it is important to develop a foundation understanding of what is going on.
I am a firm believer in researching what you are getting yourself into, before taking any actions. So I have created this guide in a similar light. As you can see in the Table of Contents, I have outlined the researching process followed by ‘how to’ actually create your accounts to getting active in the crypto-trading world. Feel free to skip around at your own leisure.
Table of Contents
- Terms to Know
- Research the Cryptocurrency Economy
- Getting Into the Game – Creating Your Accounts
Disclaimer: The details within this document are for informational purposes only and not financial advice. Proper research and due diligence should be performed prior to any financial investment is made.
Referral and Affiliate: Throughout this guide you may find some of the links to services that I may be an affiliate. I may receive some financial benefit from your use of these links. If you are more comfortable not using my affiliate link, you can modify the url to end at the “.com”.
Terms to Know
- Blockchain is the technology that enables the existence of cryptocurrency (among other things).
- Cryptocurrency is a medium of exchange, such as the US dollar, but is digital and uses encryption techniques to control the creation of monetary units and to verify the transfer of funds.
- Bitcoin is the name of the best-known cryptocurrency, the one for which blockchain technology was invented.
- Hodl – an “on purpose, kinda” misspelling of “hold” – first coined in the altcoin sphere in 2013 & later said to imply “Hold On for Dear Life”. It reinforces the financial concept that you don’t sell in a Bear Market.
- Altcoin – is a combination of two words: “alt” and “coin”; alt is short for alternative and coin signifies currency. Thus together they imply a category of cryptocurrency that is alternative to the digital currency Bitcoin
- Hardware Wallet – a special type of cryptocurrency wallet which stores the user’s private keys in a secure hardware device.
- Fiat Currency – currency that a government has declared to be legal tender, but it is not backed by a physical commodity. Examples are our traditional currency such as, but not limited to: U.S. Dollar (USD), British Pound (GBP), or European Euro (EUR)
Research the Cryptocurrency Economy
There is are a variety of cryptocurrencies to invest in. From the well-known, such as BitCoin (BTC), Ethereum (ETH), Litecoin (LTC), to the emerging like Ripple (XRP) or Monero (XMR). I personally think the best place to learn about what the currency represents or the technology behind it is by reading the whitepaper, however those documents can be quite dense.
Fortunately, there are a number of individuals who are writing more digestible versions. Here is a great article of Medium, “Beginner’s guide series on cryptoassets” that helps you understand some of the more popular coins. Again, I do suggest you research straight from the source as someone’s summary could be misleading.
If you are looking to learn more about the blockchain ecosystem and what started it all, BitCoin, I would recommend watching the Netflix documentary, “Banking on Bitcoin.” If you aren’t a Netflix user, you could also find the movie on YouTube. I really enjoyed watching this video because it’s provides a great introduction that doesn’t require a ton of reading.
Visiting Our Friend Google
When I hear about a new cryptocurrency or catch up on the latest news for a cryptocurrency that I am already tracking, I’ll search the following in Google:
- “Cryptocurrency Name”
- “Cryptocurrency Name” + “Whitepaper”
- “Cryptocurrency Name” + “Reddit”
- “Cryptocurrency Name” + “Twitter”
There are some other terms that I may try depending on what I am specifically looking for. But in a matter of a few minutes, I can get a high level summary of whether I am going to spend additional time learning about this coin or not.
Joining a Community
One person can only research so much alone. Joining a community multiples those efforts across everyone, who is ultimately striving for the same goal. I’m a huge advocate of finding a community that I am comfortable to contribute what I learn, as well as read about what others have to share.
- Facebook Groups. I facilitate a Facebook group that has a focus on helping newcomers gain their footing and begin making their first investments. Overall, the membership has a breadth of experience where some people only invest $100, while others are comfortable putting in $1,000’s.
- Google News
Getting In the Game – Creating Your Accounts
Alright, enough with all the research and reading. You are ready to start getting in on the action! Here were the steps that I followed to getting the most I could from each service. Gameplan in a short bullet list:
- Set-up my Coinbase account and move my fiat currency (USD) from my bank to Coinbase
- Set-up my GDAX account
- Set-up my Binance Exchange account
- Set-up my Bittrex account
- Set-up my KuCoin account
Note: The services listed above were recommended and used by a number of my personal friends. They had good experiences with these services, so I decided to use them as well. If there are other services that you may have heard of, please feel free to reach out and share them with my Facebook group!
This was the first exchange that I got on. Coinbase has a pretty simple mobile application that allows you to easily track the current value of the three main cryptocurrencies: BitCoin, Ethereum, and Litecoin. There has been some recent news that Coinbase will be expanding their cryptocurrency support to others such as Ripple (XRP).
I used this service to initially transfer my money from my bank into the cryptocurrency world. Out of many of the other services, this one is nice because you have the opportunity to receiving $10 USD of BTC when using a referral code. The amount of BTC that you will receive will depend on currency BTC market price.
Note: You will receive your $10 of BTC after your first buy/sell of at least $100. Typically will take around 5 – 7 days before it will be reflected within your account.
Now that I created my Coinbase account, received a $10 BTC bonus, and converted my fiat currency into the crypto-economy, I wanted to really scale my investments. GDAX is associated with Coinbase, but is the ‘less sexy’ version of it. The great part is my same login credentials for Coinbase will work with GDAX as well.
But what is the point of using this if it’s the same thing? I thought the same thing until I noticed they have different fees. GDAX does not have any! I am able to buy and sell as much Bitcoin, Ethereum, or Litecoin as I want without any fees. That is great considering that before I knew about GDAX, I was paying the small fee every time on Coinbase. Less fee = more to invest.
Sure, GDAX is not as convenient as Coinbase but there is substantial savings involved when I started increased the size or frequency of my trades.
There is no special referral code for GDAX. You can access everything you need from their main website: https://www.gdax.com/
One of the two most popular cryptocurrency exchanges that supports a number of altcoins as well. Trading Bitcoin, Ethereum, and Litecoin is nice – but there were so many other coins that I wanted to get my hands on as well; Monero (XMR), SALT, Ripple (XRP), Request Network (REQ) and so many others.
The second of the popular cryptocurrency exchanges supporting another variety of altcoin. Bittrex does support some altcoins that I was not able to find on Binance Exchange, thus prompting me to open account here as well.
Update as of 12/15/2017: Bittrex has temporary halted new user registrations for the time being. If you already have an account on Bittrex, you will not be affected by this change. Read the official announcement here.
This exchange is one of the newer and is headquartered in China. What is interesting about KuCoin is that it is mostly focused on supporting a niche number of cryptocurrencies, as well as Bitcoin, Ethereum, and Litecoin. While I was researching various coins, I stumbled upon one coin that was in its infancy, that I really was interested to invest in. However, it was only being traded on KuCoin’s exchange. My research prompted me enough to open an account so that I could trade it.
If you are curious to view what is being traded on KuCoin’s market, you can view their current listings here: View KuCoin’s Market
My overall experience with KuCoin has been great thus far. It transfers cryptocurrency (I have only done it with Bitcoin) from GDAX quickly and had a seamless experience when buying market and limit purchases.
If you would like to use my invitation code, please feel free to include “16av1” when you sign-up.
Read my recent post about what I learned after my first month, “Reflecting on the Past Month of Hodling My Crypto.”