The Beginners Guide to Investing in Bitcoin & Cryptocurrency: Getting Started
Getting started with Bitcoin investing doesn’t have to be complicated, especially now in 2019
I am sure that you, like a lot of people, heard about Bitcoin through a friend or came across it on the internet somewhere, maybe though blog or YouTube video.
Like most people your first questions were probably “how do I get into Bitcoin” or “what is Bitcoin”.
It seems very intimidating at first, when I bought my first Bitcoin I stayed up all night due to anxiety around this new, weird, blockchain based, digital currency.
Part of this anxiety was due to so many different and scattered sources of information which just made me nervous.
All I wanted to do was buy some Bitcoin, but now I was signing up to multiple exchanges and printing out paper wallets (using an offline printer) whilst shaking with a mixture of anxiety and excitement.
I may not have been the only one that had a hard time, since “How to get started with Bitcoin” and “How do I buy Bitcoin” are two questions I see a lot online.
Unfortunately there is so much information spread out across many different platforms, when the truth is, getting started is actually simple.
More simple than you think, especially now in 2019 after so many years.
Getting started with Bitcoin investing
To start investing in Bitcoin and other cryptocurrencies you first need to sign up to an exchange which will allow you to buy cryptocurrency with cash. An exchange is basically an online platform that enables anyone to buy and sell Bitcoin as well as any other cryptocurrency that they have listed.
You may have to verify your account to buy or withdraw larger amounts of Bitcoin (or any other cryptocurrency) with most reputable exchanges.
You can start off with CEX which gives you access to Bitcoin and other high value, “blue chip” cryptocurrencies like Ripple (XRP), Ethereum (ETH) and Stellar Lumens (XLM).
Verification is fast and the buy/withdraw limits are quite generous with a $20k daily deposit limit and a $50k daily withdrawal limit for verified users.
Once you have bought your Bitcoin (or any other chosen cryptocurrency) you can either keep it on the exchange or have it transferred to your own personal wallet if you have one. You can always keep your coins on an exchange for the mean time whilst looking for a wallet.
Bitcoin and other cryptocurrencies are “stored” using wallets, a wallet signifies that you own the cryptocurrency that was sent to the wallet. Every wallet has a public address and a private key.
You use the public address to recieve funds and the private key to spend the funds.
Good cryptocurrency wallets include:
Blockchain.com for Bitcoin (BTC), Ethereum (ETH), Bitcoin Cash (BCH) and Stellar Lumens (XLM)
MyEtherWallet for Ethereum and ERC-20 Tokens
Rippex for XRP/Ripple
That is all to need to get started really, you can also spend some time researching other cryptocurrencies using online forums.
How to research Bitcoin and other cryptocurrencies
Once you have bought your first Bitcoin and snagged yourself some “blue chip” cryptocurrencies (cryptocurrencies with a market capitalisation of over $2 Billion), you can start researching your chosen cryptocurrencies or research new ones.
One good place to start is Bitcointalk, this is a forum where cryptocurrency developers and investors can get together and discuss a particular cryptocurrency.
If you want to find a specific thread about a cryptocurrency, just type the cryptocurrencies name and the abbreviation “ANN” (short for announcement) into the search bar.
For example you could type “[ANN] Ethereum”.
This will lead you a thread called “[ANN] Ethereum: Welcome to the Beginning”.
In this thread, Vitalik Buterin, the founder of Ethereum announces the creation of Ethereum as well as providing additional information including:
- Information about the Ethereum ICO (Initial Coin Offering) to crowdfund Ethereums development
- Links to white papers and yellow papers which provide detailed information including the philosophy behind Ethereum and technical information.
Note: A white paper is a report or guide that educates the reader about the philosophy behind a product or service and how it intends to solve a complex problem.
A yellow paper is a document containing research that has not yet been formally accepted or published in an academic journal.
I recommend reading the information at the start of every “Announcement” post, this usually gives you good quality information such as:
- The total number of coins
- Current number of coins in circulation
- Mining information
- Whether there is a pre-mine or not
- Information about the founders and developers
- Information about bounties (tasks that reward you with cryptocurrency once completed, for example offering translation services for web pages, threads and blog posts).
- Wallet information
- Development roadmap (a timeline that shows you the intended development milestones and how long it would take to achieve each objective)
- ICO or Crowdsale information
- AirDrop information (an AirDrop is when a cryptocurrency is distributed for free to people who own another cryptocurrency or particular wallet)
- Code information (if the cryptocurrency is open source which it should be in most situations)
- Contact information
Bitcointalk is also great for staying updated with the latest news and developments as well as being able to speak with other investors and developers themselves.
It is a good place to get your feet wet in the cryptocurrency space.
Getting started with Bitcoin does not have to be complicated, especially in this day and age.
I recommend starting off with Bitcoin (BTC) as an investment choice, make it about 50% of your portfolio and then add some “blue chip” cryptocurrencies like Ethereum (ETH), Ripple (XRP) and Stellar (XLM).
Having a portfolio with a majority of blue chip cryptocurrencies is a profitable and relatively safe strategy.
As your wealth grows you can add riskier, low cap cryptocurrencies, but I believe having a blue chip portfolio will always outperform a riskier portfolio in the long run.
Dollar cost averaging — investing a certain amount every week or month, investing more when the price drops and investing a bit less when the price increases — is another great strategy for investing in Bitcoin and other cryptocurrencies.
Note: You don’t have to buy a whole Bitcoin to invest into it, you can buy any amount depending on how much you want to spend, for example you can buy 1 BTC, 0.75 BTC, 0.5 BTC, 0.25 BTC, 0.1 BTC, etc. The same goes for most cryptocurrencies as well.
- Sign up to cryptocurrency exchange: CEX offers multiple cryptocurrencies and is well established.
- Download a wallet: Blockchain is a good choice for beginners, Rippex is good for XRP/Ripple since it stores XRP offline. Site is in Portuguese but Google should offer to translate that for you, the wallet itself is in English.
- Research new cryptocurrencies, Bitcointalk.org is a good start
- Hold your investment or dollar cost average on a weekly/monthly basis
The Beginners Guide to Investing in Bitcoin & Cryptocurrency: Getting Started was originally published in Hacker Noon on Medium, where people are continuing the conversation by highlighting and responding to this story.