Who here set an alarm for 3am to pre-order the new iPhone X that they can’t afford because they are still paying off their old one?
Well I’m probably just going to sell my iPhone X on eBay, I mean c’mon who in their right mind pays $1300 for a cell phone? Let’s teach the kiddies some reserve shall we? #NewBornMinimalist
If you invested an iPhone X amount of $1300 into BTC January of 2017. Today your returns would be $5000.
If you don’t fully understand Cryptocurrency, you can learn more about it on my previous blog post “Crypto-What?”.
Before even looking into Crypto-investing I highly advise Index Fund investing as a big part of your portfolio. Start here
Crypto-investing is highly speculative and I believe 95% of them will fail (which is the failure rate of most new businesses) but if you still decide to dip your toe in the water here are some tips to getting started.
*keep in mind none of this is investment advice, just a guy simply talking about cryptos, please do your own research
Step 1: Deposit USD into an Exchange
CoinBase is a crypto exchange based in the US, your profits will be documented and taxable.
-Transfer your USD into CoinBase but don’t trade on CoinBase (they have high trade fees). It will take up to 5 business days for your funds to clear. If you don’t mind paying wire transfer fees you can get your funds cleared almost immediately. (I waited for my funds to clear instead of paying the $15 wire fee, during those 5 business days BTC went from $3300 to $4300………yea i know)
-Set up 2 Factor authentication to protect your account. This provides an extra layer of login protection. Requiring your cellphone to provide an access code along with your traditional password to login (remember to backup your cell phone frequently). Go to settings to receive a QR code which you can set up with whichever 2 factor authenticator you would like (i recommend google, simply search for “Google Authenticator” on your app store).
Step 2: Transfer your funds to GDAX
GDAX is an exchange owned by Coinbase but with way lower transactional fees about 0.25% per market trade vs Coinbase which is 1.5%.
-Since GDAX is owned by Coinbase your logins will be the same. Go to your Coinbase account and click withdraw and you will see a transfer funds option into GDAX.
-There are only 3 Crypto’s available on GDAX for trade and that’s BTC/ETH/LTC. If you would like to trade ALT coins you will need to transfer your BTC or ETH into an exchange that allows ALT coin trading. I recommend signing up for Bittrex. If you would like to check out a decentralized exchange check out EtherDelta.
(here’s a quick look at how many ALT coins Bittrex supports, it’s quite a bit)
Step 3: Understanding Private and Public Keys
-When you purchase BTC you don’t get an actual coin. BTC is a blockchain code floating around online. You simply get access to the ledger which holds an account of how much BTC you actually own. You get access to this with a PRIVATE KEY.
-When you purchase your coins through an exchange, that exchange owns your private key which you have NO access to. That is why it is important to take control of your own Private Keys. You do this by signing up for a Hard Wallet. There are many hard wallets to use. I’d recommend “JAXX” for your BTC and “My Ether Wallet” for your ETH. Once you sign up for a hard wallet with these companies you will be provided a PRIVATE KEY and PUBLIC ADDRESS. Make sure you write/copy these down in multiple locations and never keep them anywhere online. NEVER GIVE OUT YOUR PRIVATE KEY. If anyone has your private keys they essentially have access to your ENTIRE balance and once they transfer out your balance, you can kiss those coins goodbye forever.
“E9873D79C6D87DC0FB6A5778633389F4453213303DA61F20BD67FC233AA33262” (looks something like that)
-The public address is where you receive coin/token transfers from other parties. This can be given out publicly (it’s public regardless of what you do), your balances will be safe.
(here’s my ETH public key, I have many, feel free to donate ;p)
*You don’t want to leave your coins on an exchange as exchanges are targets of hackers. The most notable exchange hack was on Mt. Gox exchange, losing about 420,000 of investor’s Bitcoins, now valued at: $2.5 billion dollars. Don’t get “Mt. Gox’d” is now a common expression.
Step 4: Transfer your funds to a hard wallet
To transfer your funds to a hard wallet it’s quite simple. Just click on WITHDRAW on GDAX and you’ll be given a blank space to put the PUBLIC key of your hard wallet. Input your hard wallet public key and you’re good to go. May I suggest sending $0.50-$1.00 before you transfer your full amount.
Step 5: Cold Storage
A hard wallet simply means your coins are no longer on an exchange. But it doesn’t necessarily mean it’s safe. Some hard wallets is accessible only when you’re online, others through your computer. Which means hackers can still get to it. To make sure your coins are 99.9999% safe from hackers you will have to take them completely off line and off your computer. There are a few ways to do this.
This is a printable version of your private/public keys from your hard wallet. Simply print out and then delete all existence of your hard wallet software. Just don’t lose that piece of paper!
External Drives/Thumb Drives:
You can store your private/public keys on TXT files on dedicated encrypted external hard drives or thumb drives. Pretty self explanatory.
External Hard Wallets:
These are cryptocurrency dedicated offline hard wallets developed specifically for storing private/public keys from different types of coins/tokens. The hard wallet IS the private key! No one ever knows your private keys, NOT EVEN YOU! To utilize your coins, you need to physically have this hard wallet on you and plug it into your computer then provide a PIN and Passphrase for access.
What happens if you lose this valuable hard wallet? There is a 20 word SEED recovery code that is made available to you upon registration of the device. Don’t lose those 20 words, if you do, bye bye coins.
These offline hard wallets should be utilized for long term crypto holders. Like GOLD, many people just buy BTC, throw it into the safety deposit box and wait for appreciation.
Hope this helps you newbies. Happy investing and HODL that Bitcoin!
Stay tuned for more crypto news!