Learning anything new, especially something as technically challenging as cryptocurrencies, can be overwhelming. Where do you start? The task has gotten easier over the years thanks to the internet.
A Google or YouTube search will bring up loads of information. Although understanding the technical aspects of cryptocurrencies may be challenging, investing in cryptocurrencies isn’t much different than investing in stocks.
One of the most challenging aspects of crypto trading lies in the transfer of crypto from an exchange into a wallet. When you buy shares of a stock, the security is held by your broker, who records you as the owner in its books.
Crypto shouldn’t stay on an exchange. It’s too risky to store large quantities of coins on crypto exchanges, so you need to use crypto wallets to hold your assets. Crypto wallets are necessary to store your crypto assets securely, so learning how to transfer your cryptocurrencies off exchanges safely is essential.
To win in crypto trading, educate yourself before risking your hard-earned money. Crypto education is continual, and the better educated you are in the beginning, the better your overall experience will be.
The Best Crypto Education Sites
Educational Crypto Websites
YouTube Educational Videos
- Andreas Antonopoulos, one of the most knowledgeable blockchain experts
- Into the Cryptoverse with Benjamin Cowen
- Eric Krown’s top-level crypto chart analysis
The temptation to jump blindly into crypto can be strong, but this move usually leads to failure and disappointment. Additionally, the crypto space is patrolled by scammers looking for unsuspecting traders. Many times, victims are new to the crypto space and have not educated themselves about how to spot and avoid scams, although even the most savvy traders can fall prey to scams.
The Genesis of Bitcoin
Many people probably think the idea of cryptographic electronic money began with Bitcoin. In reality, the idea had been around for about 26 years before Bitcoin came into existence. The failures and evolution of these early projects laid the foundation for Bitcoin to succeed.
On Aug. 18, 2008, the domain name Bitcoin.org was registered. On October 31, a link to a paper by Satoshi Nakamoto appeared on a cryptography mailing list. The paper was titled Bitcoin: A Peer to Peer Electronic Cash System.
Approximately two months later, on Jan. 3, 2009, the Bitcoin network came into existence with Satoshi Nakamoto mining the very first block — the genesis block. As a result, the first 50 Bitcoin were issued as a reward.
Bitcoin ushered in a new era that changed the global financial landscape.
Why Do People Use Crypto?
The reasons for crypto use vary. To some, cryptocurrencies are speculative assets bought in an attempt to make life-changing gains. To others, they are a way to diversify their investment portfolio. Some like having an option to government-issued fiat currencies. But to others, cryptocurrencies could be life changing.
If you are born in a developed country with a mature and sophisticated economy, you should consider yourself lucky. Regardless if you are well off financially or less so, you are living at a standard that is far better than billions of other people on the planet.
Residents of developed countries even have advantages when it comes to identities. Everyone is assumed to have a birth certificate, social security number, driver’s license or picture ID to prove who they are. The ability to verify your identity has enormous advantages; it allows you to open bank and investment accounts, travel abroad, qualify for credit, get a job and receive unemployment benefits.
If you live in an undeveloped or underdeveloped country, many of these things are not available to you. It is possible that you have no way to prove your identity, which means no access to credit markets, investment opportunities or bank accounts.
You would be relegated to using only cash and be forced to live and work in an informal local economy, isolated from the world economy. A 2017 World Bank report stated that 1.7 billion adults in the world are unbanked.
This is where Bitcoin and other cryptocurrencies can be life changing. A $20 cell phone, a cheap tablet or a laptop to download one of many cryptocurrency applications is all that is needed to become your own bank.
Access to a global, decentralized, borderless peer-to-peer payment network will open incredible opportunities. Business owners and entrepreneurs with this access can operate on a worldwide scale.
Where to Buy Crypto
You can access hundreds of crypto exchanges worldwide, so finding one that fits your needs should be easy. If you are a U.S. citizen, the list of available exchanges is a bit shorter because of the regulatory landscape. The following list is just a few of the more popular major exchanges with excellent trading platforms.
Global Crypto Exchanges U.S. Crypto Exchanges Stocks and Crypto Brokers
- Binance Binance.US eToro
- Bitfinex Coinbase Robinhood
- Crypto.com Webull Tradestation
- Gemini SoFi Interactive Brokers
- KuCoin FTX.US
How to Transfer Crypto
Events like the Cryptopia exchange failure show the importance of learning how to transfer your crypto assets into a secure wallet. Transferring crypto can be nerve-racking the first few times you do it. However, it can become second nature if you take your time and pay attention to the details.
Double and triple-check everything. Things to check include.
- Transfer to the proper wallet as in ETH to an ETH wallet.
- Transact on the correct network. Is it an ERC20 token? For ERC20 tokens, you would use the Ethereum network. Some exchanges allow you to change the network while others do not. If you can choose the network, make sure that you have selected the correct one.
- Using the correct send-to address, make sure there are no errors in the address. At a minimum, check the first and last four characters.
- Most cryptocurrencies cost little to transfer but pay close attention to the fees. This is especially important when transferring ETH. At times the transfer fees for the Ethereum network can be high.
The most important thing to remember is that there is no hurry. Slow down and verify everything before clicking on the transfer button. Once you click transfer, if there is a mistake, there is no stopping the transfer and most likely, you will lose it all.
How to Store Crypto and NFTs Safely
With the large selection of wallets available, there is no excuse not to use one.
If you venture into the non-fungible token (NFT) world, you need a wallet to store your NFTs. If you want to use a decentralized finance (DeFi) exchange, you need a software wallet to connect to the exchange. At a minimum, a software (hot storage) wallet is a step in the right direction.
However, if you want the ultimate security for your crypto assets, you will want to use a hardware (cold storage) wallet. Ledger makes two different models and is one of the best on the market. A couple of features make Ledger wallets very secure.
The first is using a Secure Elements chip designed to withstand advanced cyber attacks. This is the same chip used in credit cards and passports. The other is that the wallet is only connected to the internet when you manage your crypto. Isolation from the internet makes hardware wallets hard, if not impossible, to hack.
Wrapping it up
Educate yourself as much as possible before investing in cryptocurrencies. Take advantage of free content available online. Learn to read and analyze price charts. Can you invest without analyzing price charts? Sure, but this ability can be a potent tool you can use to your advantage.
Realize that cryptocurrencies are volatile and, as an investment, are risky. Get it right and an enormous amount of money can be made, but go in blindly and you most likely will get rekt. Only invest an amount you are willing to lose.
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About Donald Hancock
Donald’s expertise lies in the technical analysis of both stocks and crypto.