How to Start Investing in Cryptocurrency

Updated on July 20, 2018
Nate Robbins profile image

Nate is a higher education student in the financial field and investor in OTC, Crypto, and NASDAQ related investments.

Different Cryptocurrencies
Different Cryptocurrencies

What is Crypto?

A basic answer to this question is that cryptocurrency is a medium of exchange between two individuals through the digital universe that is protected by cryptography. Put more simply, its online currency. I am no computer genius so I cannot give you the great details of crypto however, I can teach you how to take the basic steps and get started in investing in this innovative space.


Crypto Research

So you've heard all the Bitcoin rave and you're not really sure what it is, but you know a lot of people are making money off of it and you want to give it a try. If this is your first step in starting your crypto investment journey your starting on the right foot. Too many people dive into investments without understanding what it is they are investing in, and because cryptocurrency is a new area of investing this is a huge beginner problem. I won't be going to in-depth on what cryptocurrency is because it is a vastly complicated technology, however I do recommend you research and gain a basic knowledge of the technology prior to investing. A great place to start is by listening to the different crypto podcasts and hearing what each has to say. Many of them are experts or will bring in experts to speak on the technology. Because the technology is so new, new developments are made at an extremely fast rate, so it is important to keep updated.


TokenPay Roadmap
TokenPay Roadmap

Reading A Crypto Whitepaper

Trying to find a coin to invest in can be overwhelming at times because there are SO many coins, and each will claim to be "groundbreaking". A few big things to pay attention to when trying to find a coin to invest in is the development team, use of funds, and whitepaper (of course their are many factors outside of these to consider as well). The whitepaper is a basic "roadmap" that the developers create explaining what they plan to accomplish in a timeline, how their crypto works, and what makes it special. Each crypto you consider should have a website with a whitepaper, if it does not have one it is the first tell of a scam. By reading the whitepaper there are a few things you should take away 1. Does the goal sound possible, if the coin is claiming to cure cancer, solve global warming, and create world peace, it is another tell of a scam. 2. Does the coin have its own blockchain, if the coin does not have its own blockchain than it is just a figment of imagination at the moment and by investing you technically do not own anything. 3. Is the coin's roadmap detailed, a good whitepaper will list the developer's goals and a step-by-step guide on how they plan to achieve those goals. If you have read the whitepaper and are satisfied with the coin's vision and with the team, its time to start investing.

Finding The Right Crypto Exchange

When you have found a coin to invest in, you have to find an exchange that has the coin listed. You will most likely have to start by creating a Coinbase account because it is one of the only exchanges that allows you to exchange fiat currency for crypto. Once you have set up an account with Coinbase and an account with the exchange that lists your coin, you must transfer the coin needed to purchase the coin you want to the second exchange. Once you have purchased the coin it is time to set up a wallet.

Blockfolio
Blockfolio

Cryptocurrency Wallets

When you have purchased crypto, you almost never want to leave it stored on the exchange because this is where it is most vulnerable. Because exchanges are constantly connected to the internet, they are stored in a public server that can be accessed at any time which is why they are referred to as "hot wallets". This leaves your crypto vulnerable to hackers who could possibly hack the exchange. A better way to store your crypto is in a paper wallet, which is simiply a printed copy of your wallet address, a cold wallet (a wallet stored offline), or the most convenient option is to store the crypto in a wallet created by the developer. If developer wallets are an option, it will provide you with convenient access to your coin without compromising the safety of your coin. The only way a hacker could access your coins would be if they hacked your computer first. If your coin offers a developer wallet you should be able to find it on the coin's website and it should include a download link.

Telegram
Telegram

Crypto Investing Essentials

A couple things you will want to utilize are Blockfolio which is an app that will help you keep track of your different crypto investments and give you details on how your portfolio is performing. Make sure to check into CoinMarketCap which is a website that will give you the market-cap of the whole crypto market as well as individual coins and display where they rank overall. Many crypto communities have a Telegram group chat so by downloading the Telegram app and joining these chats it will help you to stay updated on the coin.

How Bitcoin Works In a Nutshell

© 2018 Nate Robbins

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    • profile image

      diana1hoo 

      7 days ago

      I don’t agree that Coinbase is one of few exchanges accepting fiat. However, CEX accepting it too. I use this platform, because the exchange has global coverage unlike Coinbase’s support of only 36 countries. Plus the platform has lower fees. CEX allows depositing in fiat as well (https://cex.io/btc-eur). I think that beginner should start with top popular cryptocurrencies as they are the most reliable. After having tested the waters, you can look for other good coins. The author didn’t mention the risks of investment. So never invest the money you can’t afford to lose.

    • Nate Robbins profile imageAUTHOR

      Nate Robbins 

      4 months ago

      Thank you, you as well.

    • Miebakagh57 profile image

      Miebakagh Fiberesima 

      4 months ago from Port Harcourt, Rivers State, NIGERIA.

      Hi Nate, yes, yours has just done it. Thank you, and have a nice day.

    • Nate Robbins profile imageAUTHOR

      Nate Robbins 

      5 months ago

      Miebakagh, thank you very much. That’s what I’m trying to achieve. Too many articles out there that tech how to get right into investing without giving preliminary advice.

    • Miebakagh57 profile image

      Miebakagh Fiberesima 

      5 months ago from Port Harcourt, Rivers State, NIGERIA.

      Hello Nate Robbins,

      Your article is worth re-reading. It sounds very clear, and the content is so serious to me.

      I have read many articles on bitcoin. Yours has a searchlight to consider before I invest.

      Thank you.

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