If you’re reading this, you probably know what Bitcoin is. You probably know that there’s many other cryptos that you could buy but now the question is, “How do I buy Bitcoin?”
When getting started in the crypto markets I think there’s more you need to know than just how to buy it, or how to get started. You also have to think about where to store your crypto. Not only that but scams are all over the internet. Common sense isn’t always common practice so staying cautious is critical. No one will message you promising you 0.02 BTC if you send them 0.01 BTC essentially doubling your money. Bitcoin’s white paper was introduced in 2008 and the plan was followed through in 2009. Crypto is 11-12 years old, it’s unregulated because its foreign. It’s misunderstood by many. Just like the early internet was when it started.
Everyone wants your Bitcoin, there are fake wallets, scamy projects, and code is subject to unintentional human error that’s vulnerable from attacks. That’s still no reason not to take control of your finances and protect your hard earned dollars.
This is a guide illustrating some ideas and things to always keep in mind when getting started in crypto.
Where to buy cryptocurrency?
When it comes to buying crypto, you’ll have to buy through what are called an exchange. Exchanges are usually centralized, but with the rise of decentralized finance, protocols like Uniswap were created to trade in a decentralized way with no third party involved.
No matter what, you will need to choose a centralized exchange to get started because you need to get some Bitcoin or Ethereum. After that you can transfer out to different exchanges for different coins or services and products. These initial exchanges are referred to fiat on and off ramps. This simply means that they’re like the “road” to transfer dollars, euros, pesos into crypto currency.
Coinbase/Gemini
These were the ones I used when I got started. Both requiring KYC (Know Your Customer). After verifying yourself you can then link your debit card or bank account to start buying any of the tradable assets. Note that exchanges don’t offer every crypto and there’s a reason for that but that’s no problem because there are solutions to this, you just need to get your hands on some Bitcoin or Ethereum, you can even use a stable coin like USDC. It all depends on what you want to do with the crypto you intend to buy.
Crypto.com
This is another exchange I use to buy Bitcoin and Ethereum among other cryptos. One thing I liked about Coinbase when I started what that when you buy Tezos, you start to generate interest just by keeping it on the exchange. It’s called staking, and it’s just one of many methods to generate interest. I’ll dive deeper into staking later on. There’s many different coins you can stake and for different periods of time. They also offer a cool crypto debit card where you can top up the card with dollars and use it to get cash back rewards in crypto.
Binance
When you spend some time in crypto you eventually want to buy different coins for whatever reason. But like I said before, you can’t buy them on Coinbase or other main exchange. I then found out about Binance, it’s a Chinese company that operates globally. I’ve used this exchange for a while to be able to get a hold of coins I found value in. Before you get involved with ANY exchange, do your research.
Uniswap
Everyone loves Uniswap. They airdropped 400 UNI tokens for those who participated in the protocol as an early user. It’s one of the most trusted decentralized exchanges, but that doesn’t mean that the coins on there are trustworthy as there are a lot of scams and worthless projects hoping someone will buy so they can dump their position. Before you do get started with Uniswap there’s a bit more you’ll have to know as you don’t deposit your crypto to swap coins, instead the protocol interacts directly with your wallet so you’re in full control of your funds at all times.
Square/CashApp/Paypal
You might be more familiar with these apps and what they do. Just recently they started to offer the ability to buy crypto directly with the app. And you can then withdraw it into your wallet. I’ve only used CashApp, and it was just some spare change I had that someone sent to me. It was like $10 or less and I didn’t know what to do with this low amount so I bought Bitcoin. It worked. PayPal just recently started offering crypto and not everyone in the U.S. can buy yet, just a few people. And you can’t withdraw just yet but I’m sure it’s coming because the demand it so high for it. I haven’t used PayPal but you see online that everyone is starting to buy.
Now that you have your hands on some crypto, the next step will be actually taking ownership of your crypto and storing it in a wallet. Also from now on the word “exchange” will be used interchangeably for centralized and decentralized exchanges.
Where do I store my crypto?
Storage is the single most important thing you can do. Crypto is stored in a wallet, a wallet is just a tool used to interact with the blockchain. These wallets generate the information needed to send and receive crypto through blockchain transactions. You can divide them into three types of wallets: software, hardware, and paper wallets though paper ones are used less now. They’re usually referred to as hot or cold wallets, or hot or cold storage. Every wallet generates a public and private key as well as including an address, which is an alphanumeric identifier that’s generated based on your keys.
Cold Storage
There are two well known cold storage brands and those are Ledger and Trezor. Ledger was my first cold storage and I’m happy with it. It’s like a USB looking device that connects to your computer with a USB-Type C cord. They offer Ledger Live which is a desktop and mobile application you just download. They have instructions on how to set up your wallet, so you can find that on their website. I do want to say that when it comes to buying cold storage, ALWAYS buy directly from their official website and never from Amazon, eBay, etc. You never know if someone tampered with the Ledger/Trezor you buy from them, and if they did your crypto is their crypto. Also when you do buy a Ledger, when the mail person drops it off, your signature is required of else they won’t drop it off. I haven’t used Trezor yet but I’m sure they work the same way. Also, you can store your crypto on one of these wallets and still interact with different networks like Ethereum through a web wallet like Metamask.
Hot Storage
Hot storage can be a web wallet like Metamask, a Desktop wallet like Exodus, or an app like Trust Wallet or Enjin Wallet. My first wallet was Exodus, just so I can remove my funds from Coinbase. Though it did the job, the fees to transfer out of Exodus were ridiculous. To send bitcoin from Coinbase to Exodus it was about 0.00002 BTC and to withdraw from this wallet and transfer else where it was about 0.00058 BTC almost 30x as much. I thought that was ridiculous so I stopped using it. There is also Metamask usually for ERC-20 tokens on Ethereum. You can also connect to other Networks like the Binance Smart Chain or xDai. Metamask allows you to interact with most of the blockchain world allowing you to buy NFTs, earn interest as a liquidity provider, swap coins, etc. all in one place. You can store your funds directly on Metamask but I recommend storing on Ledger, and then connect it through Metamask to interact with the blockchain. There are similar wallets like Trust and Enjin among many others.
Private and Public Keys
When you open your wallet for the first time, you’ll get a set of 24 words. This is critical.. WRITE THESE DOWN AND LET NO ONE LAY EYES ON THEM. And NEVER, EVER store them on your phone, or give them to someone online, even if they claim to work for the wallet you use. No one will ever ask you for these words. They’re referred to the private key or seed phrase. These 24 words are necessary to access your funds. No matter where you are in the world, as long as you know your words you can access your funds. Public and private keys are a part of cryptocurrencies built on blockchain networks that are based on cryptography, known as Public Key Cryptography and is asymmetric encryption.
What about leaving my crypto on an exchange?
You can also leave your crypto on an exchange but I don’t recommend it. Exchanges are centralized so that means in order for you to buy or sell crypto, you have to send it to your wallet on the exchange giving the exchange your crypto to hold for you. You never know if the team on the exchange will freeze the accounts, take your crypto, or maybe there’s a vulnerability and someone gets into their system and steals the crypto. The government can also stop the exchanges daily operations making it impossible to withdraw your funds. Or in the case of OKeX where one of the team members got arrested and he was the only one with the private keys (ongoing). No one can withdraw from the exchange. It could just be that the users lost their funds. Either way, make it a habit to withdraw your crypto and store it on a wallet of your choice. The saying you’ll hear in the crypto community is, “Not your keys, not your crypto.” and it’s true.
If you made it this far, good for you. You’re serious about what you are doing and are willing to do a bit of actual research. This guide, and any other I may post aren’t the only ways to do things. This isn’t everything there is to know but instead meant to be a starting point of what to research when starting.
Now to the serious things, well I take this extremely seriously and that’s your security and privacy when using not only crypto protocols but the internet in general.
- Never open a link from a text message, or an email, that includes direct messages on social media. Some links may direct you to a shady website that asks for personal identifiable information. In the case of android users, be more cautious. Some links will go to a website where it will automatically download a file, a file you didn’t ask for. And if the file is corrupted, well then, that sucks. What I do when I get a link through text, I email it to myself. When you hover your mouse over the link, on the bottom right you’ll see where the link will take you to so you’re sure it’s safe.
- Even when you do open a link you think is safe or you go on a website you frequent or just found, you want to verify that the website is secure. On the top where the url is, you’ll see “https://“ or “http://“ and on the side there is a lock. HTTP is not a secure link, no SSL certificates are required for HTTP-type websites. HTTPS is secure as the traffic between the the browser and the website is encrypted. Watch for that when browsing online, I would recommend at all times.
- This will apply to wallet/exchange/project/protocol research. There are many scams out there and you never know what you’re getting into. You might think that the wallet download is safe but it could be a fake copy made to steal your funds. When doing your research there are a few things you want to look into first before engaging in whatever activity.
- Go directly to their website and ensure it’s legit. Do what I explained in 2 and ensure the website is certified.
- Most websites you visit for the things you’re researching will have links to their Reddit, Discord, Telegram, Medium, Twitter, etc.
- Reddit/Discord: Do they have an active community? Are they responsive to peoples questions and concerns? How do they handle them?
- Telegram: Are they posting news? How many members are in the community? What do they talk about?
- Medium: Are they posting informative articles, news, etc.?
- Twitter: Are they actively engaging with their community? How does they community respond to the posts?
- Github: Are they updating their development progress? What’s the progress like compared to their road map?
- Keep in mind that not everything will have profiles on all these, some even have more sources or less. What matters is the level of engagement and activity so look for that when doing research and the quality of their interactions.
- Keep your personal digital life separate from your crypto life. I recommend creating an email for all crypto activities. You can set up forward messaging to direct the messages you get in this account to your main email if you want, the point is to give out the least amount of information about yourself as possible. You never know what the intentions of others are if they get a hold of your personal information.
- When storing your crypto in wallets, cold or hot, take into consideration the “flow of funds”. Everything is verifiably tracked on the blockchain. Anyone with your public address can look it up on the block explorer and see the activity you’re engaged in, who (or what addresses) you send and receive funds from, what you own/how much, etc. Depending on what you plan on doing with your crypto, consider having more than one address for your crypto and choose a path for them. For example, have one only for long term holding, have one for interacting with Uniswap, one for Maker DAO, and so on. The cool thing is that they’re free to make.
- You don’t have to do this but tracking your numbers is cool data to look at. What I mean by this is tracking: what you buy, it’s price at that time, date and time, how much you bought, fees paid, fees to transfer, how much it increases or decreases in value every X number of days, average price of every purchase, etc. You can get on Google Sheets and use that spreadsheet for your financial statements. It’s also free, so take advantage of the tools we have available.
- I was hesitant on posting this because not everyone wants to spend more money, I know I don’t. But if it’s something that’ll help you sleep better at night, then why not? Use a separate phone number, a prepaid one for like $30/month. Why? Well people want your crypto and you’ll hear about SIM swaps. What this is, is that someone calls in to your phone company saying they’re you. They’ll tell them that you need a new SIM card for whatever reason. Activating a new SIM card immediately disconnects your actual phone with the real SIM card. Then who ever got your number can access your crypto accounts, verify themselves with your number and withdraw your crypto. If you use a different number from your original one, there’s a possibility this can be avoided.
- Lastly, I wanted to talk about a VPN, virtual private network. Basically what this does, it “masks” your IP address. When you open Google Chrome or Safari, when you are connected with a VPN the traffic will go from your device, to the VPNs’ servers, then to the website want to get to and the traffic will return to your device using that masked IP. You’ll have a different IP address from your original which is what you want. VPNs are completely legal, you can pay for like a $12 subscription or pay like $70 for a year with Nord VPN or Pure VPN (I’ve used both). The cool thing is that you can also connect to servers in different countries. This is how I’m able to watch South Park and Rick and Morty on Netflix when it’s not available in the U.S. yet. Definetly something worth researching and using long term to stay protected online.
No matter what you do, there are always risks and it’s up to you to protect yourself. No one will do it for you so take responsibility and most importantly use some common sense. Don’t click on a YouTube ad that’s talking about crypto and how you can double it by sending some to them. Be cautious on the internet by verifying links, websites and by using a VPN. Use this as a starting point for your own research and be safe online. This is a once in a lifetime opportunity that we all have access to with just our phones. Don’t just be a bystander, take action and buy some Bitcoin and Ethereum. Protect the money you work so hard for.
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