How to get started
with Bitcoin and Cryptocurrencies?
7 Steps for the right start!
Cryptocurrencies are booming. Everyone talks about it, kids in school, people in bars, family members when having reunions, business partners and of course your grandparents.
On top comes YouTube and other mainstream media channels reporting about it every single day. There is no way not knowing about it.
However, the big question is how to get started with Bitcoins and Cryptocurrencies?
Let’s get it started!
1. Get an Overview
There are thousands of cryptocurrencies out there. Most well known are Bitcoin (BTC), Ethereum (ETH), Ripple (XRP) and Litecoin (LTC). Get a first impression: https://coinmarketcap.com/
2. How much you want to invest?
Only invest what you can afford to lose. Bear in mind that the price of cryptos swings heavily, also intra-day. -30% or +30% daily swings are common. The volatility is high and your investment may go to 0 - sad! However, it could also multiply x10 or x100 - weee (like you heard from your friends and that was the reason why you got into crypto).
3. How do I buy Bitcoins?
You should get started by buying Bitcoins. It is the most liquid and most well-known crypto. With Bitcoins you can almost buy any other cryptocurrency.
To get Bitcoins, I recommend you to transfer money from your Bank Account to a reliable exchange. Make a screenshot of your transaction, you might need it for tax purposes one day.
• Bitfinex (biggest liquidity, EUR and USD deposits/withdrawals)
• Coinbase (biggest exchange, great for US citizens as well, EUR and USD deposits/withdrawals)
• Bitstamp (EU license, EUR deposits/withdrawals)
• Binance (trade your BTC vs. many other coins)
4. What else should I buy except for Bitcoins?
Well, the key word is diversification. Invest into different cryptos to minimize your daily swings and to bet on several technologies (each crypto has a function, Bitcoin is mostly just a currency, however coins such as Ethereum really can do something beside being a store of value). Investing into 3-10 cryptos is totally fine for the beginning. I will not give you a specific recommendation on what crypto to buy or not, however if you look at the the top 15-20 in market capitalization, see step 1, then you can invest in almost any crypto. They are established, working and can be traded on exchanges easily.
5. I heard storing Bitcoins & Co. on exchanges is not safe?
You are right. Exchanges hold your coins for you but you are not owning them. For cryptocurrencies you are the owner if you hold the “private key” yourself. This can be done by downloading desktop wallets and store your coins there. However, using desktop wallets is not that much fun as they need lots of computer storage and some are not very user-friendly.
I recommend you to use a hardware wallet. It looks like an USB-stick where you can send your Bitcoins (or other cryptos) from the exchange to your stick. You can carry your coins anywhere and you do not rely on a desktop wallet on your computer at home. The best part is that you own the private key of every coins using the hardware wallet. There exist 3 main players in the crypto hardware wallet market:
We also have a blog article comparing the Ledger vs. Trezor, take a quick look:
6. What's next?
Relax! Hodl! (crypto enthusiasts say “hodl” instead of to hold cryptos, this is not a spelling error.)
Try to understand the technology behind each crypto more in depth. Try to get into social communities discussing about cryptos seriously. Try to educate yourself in order to make better investment decisions for the future. Reading is a big part of it. It may be books, news pages or the specific coin pages.
7. How to keep track of my portfolio net value?
Well, I recommend you to create your own excel, to use an app or to use a professional cointracking service.
In the App Store/Google Play Store download the App: Delta.
We also wrote a review about a professional cointracking service which tracks your portfolio at anytime and it helps your for potential taxes too, check: Cointracking
If you were happy with my quick how to get started with Bitcoin & Cryptocurrencies guide, feel free to check our honest reviews at our website. I wish you a successful hodling!