Cryptocurrencies — Beginner Guide

Cryptocurrencies, Bitcoin, Blockchain, Crazy Earnings, Potential Bubble, Business of the Future and a few more expressions today are heard at just about every step. But the entry of the cryptocurrencies into the world is still very difficult, especially for people who are not very technologically educated.

Photo by André François McKenzie on Unsplash

At the time of writing this article, almost every person, from the children in kindergarten to the market readers, has heard about cryptocurrencies and Bitcoin. But in fact, only a small percentage of people actually own cryptocurrencies.

ATTENTION — before any money transfer, I suggest that you read the article to the end, since you need to take care of things that you do not want to do later before you start trading, when you have money in the exchange.

You can represent Blockchain as a public book in which all transactions are recorded. All users have access to the blockchain, which prevents fraud and allows easy tracking of transactions.

In the case of blockchain technology, all this information would be recorded in the “data block chain”, so each entry would be dated, it would be known who wrote it and to whom it refers, and we would have access only to those who are empowered.

Cryptocurrencies are simply said — digital money, which operates in a digital money system without a central system (banks). In order to establish such a decentralized system, they had to solve the main problem that prevented all such attempts in the past — how to resolve the reconciliation of records (for example, the same user does not pay twice with the same money and abuses it, etc.).

Satoshi Nakamoto, known as the inventor of Bitcoin, currently the most widely known and widespread cryptocurrency, has solved this problem by reaching consensus among users without a central system.

In reality, this works like this — Alice decides to send 0.5 Bitcoin to Ben. Ben tells him his digital address, and Alice starts the process of transferring money by entering his private key (simplified: the password he only knows). At that moment, this transaction is triggered and visible to the whole network (of course, not with names and surnames, but in codes), and then a key moment occurs — confirmation of the transaction.

Bitcoin is a payment system without a central authority or brokers. Simply put, Bitcoin can give you an example of Internet cash or currency. What matters is that nobody owns the Bitcoin network — is controlled and managed by all users worldwide. If you want more information about Bitcoin — click here.

Also Read: A Candid Explanation of Bitcoin

On the market there are more and more types of (alternative) cryptocurrencies, known as altcoins. They represent an alternative to Bitcoin, but they differ in particular from the purpose, transaction speed, distribution method, algorithms and other characteristics.

A list of all the cryptocurrencies is available at CoinMarketCap. Through this website, you can also check the current value of cryptocurrencies (say in comparison with the dollar) and decide whether to buy the currency for the long term (“HODL”) or because you believe in it’s idea (open the official website of the cryptocurrency and read the problem and if so, consider whether this decentralization can help in this case).

You can, of course, also decide on a short-term (speculative) purchase of the currency and you are hunting for the fall of this currency to create a plus for you shortly, because you believe that it will grow again (which is often happening with cryptocurrencies). In this case, it is advisable to track trends and analyzes that can be found online as well.

The total “Market Cap” of all cryptocurrencies in January 2017 amounts to 682 trillion dollars, a small drop in the global sea, where Apple’s value is higher than that. So you can think how much room for progress still exists in this area.

OK, I understand, I have some money that I would like to invest in cryptocurrencies, but everything is so complex — what do I have to do?

Let’s go trough step by step — you need the following to buy (and store) cryptocurrencies:

– Money on your Bank account or credit card,

– A certified account at the cryptocurrencyy exchange where you will load the money and buy your first cryptocurrency,

– “Wallet” in which you will store your cryptocurrencies (more about this below)

Open an account on the exchange:

To add Money into your “Crypto account,” we recommend that you use “exchanges” that accept Dollars or Euros while offering the option of purchasing different cryptocurrencies.

Binance are one of the most renowned exchange offices with a huge selection of cryptocurrencies, but for the time being they do not receive EUR, so you need to load EUR into one of the previous exchanges, convert them to one of the cryptocurrencies, and later transfer the crypto to your Binance account.

Always pay attention to the right link before you log in, there are some crooks out there who want to take away your money.

If you want to create an account on Binance, you are welcome to use my affiliate link. I would be very happy about that and if you have any questions you can contact me!

I prefer to use Bitpanda. It’s an Austrian company based in Vienna. I know some people there and they do their thing perfectly.

Of course I leave my affiliate link for you here as well. Thanks a lot for that!

Also, after a verification on Bitpanda you have the chance to make savings plans. A very great idea to save Bitcoin and other crypto currencies. The fees on Bitpanda are relatively low and in my opinion one of the best wallets online.

Sign up with Bitpanda and let’s safely earn Bitcoin together.

Once you register with the exchange (and you get “Tier 1”), I advise you to instantly submit a “verification” request, that is, to upgrade your account, as this will only become real liquid and you can load money on it money back to your bank account).

The verification procedures are similar in all exchanges, most of which is to enter all your information and upload and record your personal document. Please note that you will enter information that is visible on your documents.

Most of the exchanges, along with a personal document, also require a copy of another document proving the correctness of your permanent residence, the easiest way to send a copy of a bank statement, a credit card statement, and some also accept ordinary accounts (for telephone, electricity, etc.).

In order to protect your account, I strongly recommend that you consider the “2 step verification” offered by all exchanges. It’s about downloading an mobile application that will also allow you to add additional code in addition to your personal password for different accesses, which will be different on each entry. The installation is quick and easy.

Next, when you sign up at the exchange, you will then enter your username, password, and then the system will ask you for this additional code, which you will find in your application on the phone. By doing this, disable (or at least complicate, harden the work) for those who would like to break into your account because they would somewhere gain information about your password.

The happy day will come when you receive a notification that your verification is successful and you can upload your first deposit. Try to calm down and remember the following:

– Only add money that you can miss and which you can completely forget in case anything doesn’t go as planned. Do not take loans, child funds for schooling or borrowed money.

Check all the information entered at least three times. You’ve been waiting for a verification for at least 3 weeks, if you take 3 minutes now, nothing will go wrong in between, but you can save a lot of money and extra time losses.

In most exchanges, you will see your assets within 1–5 business days. If you are going to use Bitpanda, you have it immediately.

There are only a few interpretations of terms from the Crypto-World left now:

  • HODL — actually means HOLD. When a currency (or a whole market) begins to fall suddenly, do not panic. You will almost certainly end up in a minus by hastily exchanging currencies or even trying to make payments on bank account. If you are going to “HODL”, you probably know the next day to wake up in green numbers.

So, blind follow-up is not advised, and learning is absolutely advised. And there are a couple of things you can think about:

a) Budget for “long-term” (long-term investments, stable currencies, perhaps crypto-exchanges that will disperse your roles themselves. It is a lower risk and lower yields, but much larger than you are used anywhere else)

b) Budget for “short-term” (short-term investments, according to daily forecasts and opportunities. Greater risk and higher returns).

A wallet is a digital wallet where you can store your cryptocurrencies and only you can access them. Since the opening of wallets in a browser is a rather complex matter (and at the same time not completely safe), we recommend that you buy one of the two most secure and well-known crypto-wallets:

Trezor

Ledger Nano S

CAUTION! You must order the wallet on these official product pages, any orders from other online stores, or even worse — ordering used wallets from Classifieds ads (etc.) poses a high risk — as you would order a Mastercard card via Classifieds and you would not be sure whether the seller still has access to it, and you would upgrade your assets.

When ordering a wallet you will also receive instructions for use that will help you transfer your purchased crypto into your wallet and keep it safe.

In exchanges, leave only those cryptocurrencies you intend to trade daily. Send everything else as soon as possible to your safe wallet.

Please also note the following: The information I gave is only available for educational and informational purposes, without any explicit or implicit warranty of any kind, including guarantee of accuracy, completeness for any particular purpose. The information contained or offered by me is not intended for financial advice, investment advice, trade advice or any other advice. The information is of a general nature and is not specific to you, the user or anyone else.

We should not take any decisions, financial, investment, trade or other information on the basis of any information provided by us, without being able to exercise due diligence and consultation with a professional intermediary or financial advice. You understand that you use all the information available at your own risk. Trading with Bitcoins or alternative cryptocurrencies has potential benefits and also has potential risks. Trading may not be appropriate for all people. Anyone who wants to invest should seek out their own independent financial or professional advice.

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WHATEVER YOU DO, DO IT WITH LOVE AND PASSION!

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