If you’ve been hearing about Bitcoin and want to get involved, but don’t know how to start, use this easy guide to take your first steps into the cryptoverse.
Step 1: Understand what you’re getting into
First, know that I’m not a financial advisor and that the cryptocurrency market is very volatile. Do not invest more than you can afford to lose – especially while you’re learning the basics. I believe blockchain technology is poised to revolutionize our modern society, but it’s still in its infancy. Proceed with confident caution.
Step 2: Get a wallet
Before you can own Bitcoins, or any other digital asset, you’ll need a “wallet” to store them in. The wallet consists of two keys: a public key, also known as the wallet address; and a private key, which gives you access to make transactions with the wallet. Here are a few options for this step:
This is the easiest way to start, though one of the least secure methods. Browser-based wallet apps are called "hot" wallets because being connected to the internet makes them vulnerable to hacking. Never store large sums in a hot wallet. Start small so you can learn how things work, then consider alternatives if and when you decide to go deeper. Get a free wallet at blockchain.info
This more secure option is considered "cold" storage because the keys are not stored anywhere online. Instead, you use a key generator to create then print or write them down by hand. You can do this online, but that reduces security by being vulnerable to spyware. It's safer to download a wallet generator that can be run offline. If you print your wallet, be sure to use a printer that is not networked. Learn about this method at bitcoinpaperwallet.com, then download the generator on GitHub.
From a usability perspective, this is the happy medium between online and paper wallets. And as a cold storage option, it's quite secure. It does require a bit of an investment, though, with costs starting around $75. This is a good way to go when you're ready to starting holding larger sums of digital currencies. I'm still in a fairly small fry position in cryptoland, but I invested in a Ledger Nano S to get familiar with using a hardware wallet.
Step 3: Buy Bitcoin
This is the fun part. While Bitcoin is not the only crypto currency out there, it is the pioneer and best known in the digital currency world. Accordingly, it acts as something of a gateway in the space. Options for buying are growing daily, but for the most part you need to start with Bitcoin in order to acquire other currencies.
There are many options for the step, but because this is a quickstart, I recommend Bitquick.co – which is one of the fastest and most affordable ways to buy.
What you'll need:
- Cash. Cold, hard, physical fiat.
- To be near a bank.
- Printer or legible handwriting.
- A camera.
How it works
- Go to bitquick.co and click "Quick buy"
- You'll choose how much you want to buy and the site will preselect a few options, with banks and exchange rates listed.
- If you want to select an order manually, find the "click here to view all open orders" link. This is found on the "Matching Orders" windows, after you select your amount and payment method.
- You'll finalize the order by entering your city and state, a valid email address, and your wallet address.
- The first time you use the service, you'll be asked to verify your identification by uploading an ID.
- Once the order is placed, you'll get details delivered to your email address, which include the name and account number of the seller.
- Print or carefully write down the order details. You'll have 3 hours to complete the transaction or the order will be cancelled.
- Go to the bank (must be a branch of the bank specified!) and make a deposit to the name and account on the order. Yes, you'll need to walk into a bank IRL and interact with a live teller.
- GET A PAPER RECEIPT!!!
- Write "For Bitquick.co No Refunds" on the receipt, take a picture of it, then upload the image using the link provided by email.
- Wait for confirmation. Currently, processing times are usually under an hour.
A few tips
- Choosing how much you want to buy: You can enter the dollar amount you want to spend, then see how much you'll get in Bitcoin, or enter the amount of Bitcoin you want to get and see the cost in dollars. Keep in mind the final cost will be slightly higher, after fees are included.
- Choosing a payment method: The next step will ask you if you want to pay with a cash deposit, or through money transfer. Choose cash. If you choose money transfer you'll generally find that there are "no available orders." And if there were the fees and processing time would be higher.
- Review your deposit options: You'll get a list of well known banks to choose from, with the current exchange rates listed below. This is representative of rates set by individual sellers, so expect to see some variance in each rate. If you have the luxury of choice, skip the popular options and select "click here to view all open orders." This will give you a detailed list of bitcoin for sale, with the required bank and the amount available for sale. This is a little more work, but is the best way to shop rates.
Congratulations. You have stepped boldly into the future of finance. If you’ve taken my advice, you started with a small amount so you could get familiar with the process. Try out the above once or twice more – perhaps varying your selections so you know what works best for you. When you’re ready, proceed with step 4 to go deeper into the crypt.
Step 4: Buy altcoins
As I mentioned earlier, Bitcoin (BTC) is just the beginning. The are many other currencies that can be purchased. In fact, this is where the real opportunity lies for most people. At a price of around $5600 per Bitcoin (as of October 19, 2017), BTC requires big investments to see big returns. On the other hand, you can buy Ethereum (ETH) for just over $300. If its trajectory is anything like BTC, that’s an incredible value. And there are plenty of other viable coins and tokens available for much less. I invested in TenX (PAY) tokens which are currently trading just under two bucks a piece. Use this list of top cryptocurrencies to discover more options.
Get a wallet
Just like with Bitcoin, you'll first want to make sure you have a wallet that is compatible with your the currency you want to buy. The wallets recommended in step 2 of this guide are only compatible with Bitcoin and Ethereum. There is not any one universal wallet. This can be one of the more frustrating parts of the process, since the more wallets you have, the more you have to secure and keep track of.
The are several wallets that works with the 5 to 10 most traded coins, but the wallet that works with an incredible 64 currencies is Coinomi. The downside is that it's currently only available for Android devices. Desktop and iOS versions are reportedly on the way.
Go to an exchange
With your new wallet address and your Bitcoin address at the ready, head over to a coin exchange.
IMPORTANT: Some exchanges have wallet apps or act as an intermediary holder of your coins while you make trades. Do not ever use these platforms to store your coins. They have a history of getting hacked.
I prefer to use sites that simply facilitate direct trades. These tend to require less sign up friction and account maintenance. My favorite is Coinswitch, which acts as an exchange aggregator. It lets you compare rates across a number of exchanges and requires no account at all. Learn more on the site's very useful FAQ.
If you’re intrigued by all this, you’ll probably want to dive even deeper and learn how this can truly change your life. Whether you just want to secure your future access to capital, or you want to invest in the next wave of revolutionary technology, there’s plenty more to learn. Use the following list to take it to the next level.
- Bitcoin security for beginners
- Enhanced security tips (intermediate)
- Security for advanced tech users
- Security for hackers (ultra advanced & funny!)
You can search YouTube and find an ever-growing list of crypto experts. The one who’s resonated most for me is Brand Kelly – otherwise known as the Boss of Bitcoin. BK posts (almost) daily videos in which he demonstrates his “boss method” via live chart analysis. His engaging personality and finance background help people feel empowered to get into the game.