We've previously been talking about the kind of potential that cryptocurrencies have provided for the world at large, and less about what exactly it represents for the average person. At its core, cryptocurrencies like Bitcoin were designed with the express purpose of digitalizing money. As a result, making it a lot easier for users with or without a bank to accumulate money and make payments from anywhere in the world.
Sounds like an exciting premise, right? Well, it's news that gets even better when considering that it's quite easy to get started with investing in it, for one. And the other is that there is now an exceptional amount of institutional interest and applications for blockchain technology and the likes of Bitcoin.
With the introduction of these entities, the market is poised for a bullish trend. So if you're looking to kick off your investment journey into cryptocurrency: let's show you just how to get started.
HODL-ers see themselves holding crypto for the long haul instead of dipping in and out of it. Meanwhile, those looking to invest in it will keep a closer eye on shorter-term performance. Why does this matter? Because it's something to consider when getting a cryptocurrency wallet.
These come in two types - Digital and Hard. Hard Wallets, as the name suggests, are physical storage solutions for your crypto. these have the added advantage of being highly secure (depending on the kind you buy), along with serving as 'cold' storage. As in hard wallets are disconnected from the online world.
Good examples of these include the Ledger Nano-S and the Trezor Model-T.
Digital Wallets are wholly online storage, and range from those that are used by cryptocurrency exchanges (Coinbase, for example) and third-party entities (TrustWallet, MetaMask, etc.) Upswing to digital wallets is that they provide immediate accessibility along with a good degree of security (Seed key phrases, double-sig authorization).
With any digital wallet, the high security can be your downfall if you're not careful. Why? Because whichever wallet you use, it will prompt you for a 16 letter passphrase that you'll need to remember.
Top Tip - WRITE THIS DOWN! Don't type it up or leave the note lying around somewhere. Write it down and keep it somewhere safe.
We've previously discussed some of the more accessible and intensive crypto exchanges in other articles, so if you haven't had the chance to dig into those, it's worth looking.
Some more centralized exchanges, like Coinbase, Changelly among others, allow you to easily hook up your bank card to their platform. Meaning that all you have to do is go through their on-boarding process, add your card and buy!
It's worth pointing out too that you should be looking at key things when picking an exchange. One being if you have a preference for centralized or decentralized, if it's the former, make sure they have a good reputation and access to the crypto that you're after.
If it's the latter, make sure that it has good reviews from users, but also that it has good, stable liquidity if you're after trading. If you're margin trading with volatile liquidity, you could find yourself saddled with a net loss, and an inability to sell.
When investing on platforms like Coinbase, it's often a practice that users leave their amounts in a portfolio on the exchange. We generally do not advise this; mainly because it's safer in a third party digital or hard wallet than it is there, no matter how dedicated these exchanges are to ensuring cybersecurity.
Once you've bought your desired crypto, and depending on the kind of digital wallet/exchange you use, you'll need to get a long sequence of letters and numbers. This is your wallet address, you need to copy or type that into your exchange under 'send crypto.'
Once you've done that, your crypto will be sent over to your wallet, where you can securely store it for as long as you want.
That's how it works for Digital wallets. As for hard wallets, all you need to do is plug it into your computer, where you'll be prompted to submit a PIN Code before it allows you to move them to your hard wallet.