An Introduction to Bitcoin and Other Cryptocurrencies

 

You may have heard about this whole cryptocurrency (crypto) thing floating around. Well, it's not new by any means. The first cryptocurrency, Bitcoin (BTC), was released back in 2009. You're probably only hearing about it now because Bitcoin and alternative cryptocurrencies (altcoins) have started to see a significant rise in value. Bitcoin specifically has begun receiving attention at a global scale and is becoming a more common thing to talk about in households everywhere.

Bitcoin is a digital currency. Many say it's the currency of the future. It's a peer-to-peer backed cash alternative. There is no government regulation and there is technically nothing backing it. If merchants choose to refuse BTC, its value would diminish and the price would plummet. However, that is the opposite of what is currently happening, and many places are racing to accept BTC or alternative crypto payments.

Although Bitcoin is the most popular, it is not the only cryptocurrency. There are actually hundreds of other BTC like alternatives and they all attempt to solve different issues. You can check a lot of these currencies and their market cap here: CoinMarketCap. To make it easy, you can simply view them all as little brothers to BTC. Unlike BTC, most of these altcoins exist on a much smaller scale. This causes their price to be more volatile, and therefore good targets for potential profit. But, you have to be careful because although there is room for profit there is plenty of room for loss as well.

Unlike the stock market, crypto never sleeps. There is no open or close, and it continues to gain and lose value when you go to bed. If you wanted to, you could work a day job and trade throughout the night. The markets for crypto are always moving, and that means the potential for profit and loss is always available to you.

If you would like to get into the world of crypto, you are going to need a few things. You're going to need an exchange(s), and a wallet at minimum.

Exchanges

If you would like to get into crypto you're going to need to open an exchange account. This allows you to trade your USD for cryptocurrency. Typically, you will be trading for BTC which you can then trade for other alts. If you're looking for an exchange, you have quite a few options.

Coinbase

This is probably the most popular exchange, but they also seem to charge the largest fee. You'll see a 4% charge if you pay with a credit card, but less if you purchase with an alternative payment method like your bank account. Also, if you have a new account, you are dealing with tighter purchase limits. You can purchase BTC, LTC, and ETH on this exchange.

Gemini

A great alternative to Coinbase. Allows trading of BTC, ETH and USD. My issue with this exchange is that it isn't available for use everywhere. At the current moment, I am not able to use this exchange as they don't support residents from Wisconsin. It's worth a shot if you live elsewhere because it's a great looking platform with low fees.

Binance

This is a popular platform that emerged only a few months ago. An advantage to this one over the others is the support for low-market cap coins (larger profits if you invest in the right coin) and their affiliate program. I have an account here so that I can buy into a small coin that appears to have a great dev team as well as good support. Some coins can do 50x - 200x and that's something that interests a lot of people. It's worth a look!

Bittrex

If you are interested in trading a vast number of different altcoins in addition to BTC and ETH, Bittrex is a great option. I use Bittrex, but I tie it to a charting tool because the default Bittrex UI is unfriendly. If you go this route, you are surely going to want to check out Coinigy. You connect Bittrex with Coinigy through an API key and that will allow you to use Coinigy as your main trading platform and Bittrex will be used as your base. You can see this video below for details on how to do so:

 
 

Honorable mentions include Kraken and GDAX. In the end, you have to sign up for a few and use what you like. All of the listed options are secure, safe and fairly easy to use. Your final choice should consider both cost of fees and usability.

Wallets

Just as you have a wallet for your own USD, you need a wallet for your Bitcoin. However, one of the beautiful things about BTC is that you can store it almost anywhere. A computer, your phone, a key chain, basically anything that can communicate with the blockchain network. Now, I don't recommend placing your wallet on your personal computer, or using a web wallet hosted by some company. You want to be in full control of your BTC, and the only way to do this is by storing it securely on your phone, or a hardware wallet.

If you don't have a ton of BTC, a hardware wallet is unnecessary. They cost quite a bit and they are mostly for enthusiasts holding a large investment in crypto. But, if you are interested in keeping everything safe, they are a great option.

Feel free to check out TrezorLedger, or KeepKey if you are interested in a hardware wallet.

For most, I recommend a wallet for your iPhone or Android. I recommend BreadWallet. It's worked well for me and many others. It's a safe and secure option.

Another great iOS only option is airBitz. Great reviews and the application is fairly easy to use. I wouldn't mind using either aitBitz or BreadWallet. Both function fairly similarly, and work as intended.

If you're looking for another Android alternative, take a look at Electrum. The app looks great, fees are minimal and it works just as you would want it to. Most of all though, it's secure.

Final Words

Crypto is fun. Not only does it help you learn various skills that may be useful to you down the line, it also introduces you to a great community. The majority of the community is very understanding and willing to help you get on your feet. We're obviously still in infancy when it comes to electronic based currency, but those who believe in it try to pull everyone in. It is the future, and many invested do believe that. Sure, there are professional traders that have moved over to trading altcoins because it's so volatile and easy to make money. However, a majority of people believe in Bitcoin in the long-run. A few years down the line you're going to regret not investing now. As adoption grows, so does the value of Bitcoin. Get in while you can, and enjoy it. You're part of a niche group that is going to grow into something larger than itself. 

If you want to learn even more I recommend checking out BTCKyle and his YouTube Channel. There are plenty of people who make videos based on crypto, but I have enjoyed his work more than others. Check it out here: BTCKyle.


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