So you want to invest in Bitcoin? Or maybe just any type of cryptocurrency. You’ve come to the right place!
Here is your step by step guide on how to get started investing in cryptocurrency (the smart way).
The first thing you’re going to need to buy any cryptocurrency is an account on an exchange that will allow you to buy and sell. Roger Rabbit prefers Gemini, but there are plenty of other options out there as well. Gemini allows buying and selling of just Bitcoin and Ethereum (for now).
If you are interested in purchasing other cryptocurrencies (Note: Anything other than Bitcoin is referred to as an altcoin), you will need to make an account with an exchange that allows you to buy these cryptocurrencies. Roger Rabbit uses Bittrex for this, but again, there are others. I would recommend starting out with Gemini and either Bitcoin or Ethereum (or both!) to get your feet wet.
The next thing I HIGHLY recommend is investing in a “hardware wallet,” which is basically a secure way to store your cryptocurrency. A hardware wallet looks a lot like a flash drive and plugs right into the USB port on your computer. Roger Rabbit has a Ledger Nano S Cryptocurrency Hardware Wallet.
You have the option to simply leave your cryptocurrency on the exchange you have an account with, but that leaves you open to the possibility of being hacked. With a hardware wallet, you are the only person who owns or can access the private key to your cryptocurrency.
If you have a wallet on an exchange (instead of a hardware wallet), the exchange actually owns that private key, and you can’t even view it. It’s “yours,” but it’s really not because the exchange owns the private key. Picture it this way: if your private key is like a thousand dollar bill it would be the difference between keeping the thousand dollar bill in a safe at home versus putting it in a bank if banks were far less stable, less established, not insured by the government, and very vulnerable to cyber attacks.
You may be thinking to yourself, “I don’t need to spend $100 on a hardware wallet.” Believe me, if you want to put any kind of money into cryptocurrency, this is the right call. Let one of Roger Rabbit’s early experiences be a cautionary tale.
In 2014, he bought about 70 Dash, which were not worth much at the time. He kept them on the exchange he had purchased them on, Cryptsy (no longer operating). Then one day Cryptsy shut down and vast amounts of cryptocurrency were no longer accessible. They were stolen. Gone. Forever. The amount of Dash Roger Rabbit lost would be worth about $80,000 today. So don’t make the same mistake he did! Protect yourself and invest in a hardware wallet.
If you’re still uncertain, ask yourself this: if you woke up tomorrow and someone told you all your cryptocurrency was gone forever, would you be devastated? If the answer is yes, you NEED a hardware wallet.
One more thing I’d like to point out before you get started: you can purchase virtually all cryptocurrencies in very small increments. In other words, to buy Bitcoin, you don’t have to buy a whole Bitcoin. You can buy half a Bitcoin or a tenth of a Bitcoin or even .00000001 Bitcoin. So don’t let the sticker shock scare you away from Bitcoin or Ethereum.
So there you go, you are now ready to invest in cryptocurrency (that is, AFTER you purchase a hardware wallet!). Good luck on the first step of your crypto-journey! Look for more articles coming soon as you descend further down the rabbit hole.
Crypto Vocabulary 101
- Cryptocurrency -- Refers to any digital currency. The broader category in which you would place Bitcoin.
- Exchange -- A service (such as a website) that allows you to buy and sell cryptocurrency.
- Private Key -- A string of letters and numbers needed to access your cryptocurrency.
- Hardware Wallet -- A small, physical device that allows you to store your cryptocurrency relatively safely (alternative to keeping it in an exchange wallet).
- Altcoin -- Refers to any type of cryptocurrency other than Bitcoin (i.e. Ethereum, SALT, Dash, etc.).