When I am not working (Wianw) …..

Cryptocurrencies and how I got started – Part I

Background Noise – Tidal Playlist Legends Queen 

A few months ago I had the urge to better understand Cryptocurrencies, i.e. Bitcoin, Ethereum ,etc . Also since everyone at work, is talking about blockchain, it seemed to be a good idea to get my feet wet and understand how this new technology works.

But before I start, I want to put out a disclaimer: this post is not an investment guide and I am not a professional trader. If you follow my tracks, you do this on your own risk!!
Being now around a few weeks, it turns out the whole cryptocurrency space is quite exploding and with the herd, also some black sheeps are coming.  I can only stress, if you plan to invest/sign-up for a new website, do your homework:

  • Is the concept sound? i.e. an advertised return investment  of 100+% should not get your excited, but worried
  • is the technology/business model concept explained well? Solid Sites post usually presentations, technology whitepapers…and are not just relying on proprietary machine learning algorithms
  • Who is backing/funding this technology/business model? we all rely on our friends, but are there some serious investors involved….
  • Security! – Can’t stress this one enough, this starts with simple encrypted Websites, to 2-factor Authentication, Recovery Passphrases, etc. In a nutshell, in the world of cryptocurrencies, you are responsible for the security of your investment. Your choices matter!!!

How do I get a Bitcoin? 

So it was another of the weekend days … i thought to myself … wouldn’t it be great to get my hands on a Bitcoin, so I can understand the hype and what I can do with it…..

To get started:

  • you need somewhere to store your money – a wallet
  • a cryptocurrency exchange, this enables you to transfer money from physical currencies to cryptocurrencies.

Important: As with other exchanges, you cannot trade any cryptocurrency. So again it comes back to homework, which cryptoocurrency do you want to trade, how do you want to transfer your funds (Credit card, ACH Transfer, PayPal ) and is the exchange operating in your country/state.

I picked www.coinbase.com, which in hindsight seemed to be a lucky pick:

  • It offers both the ability to buy/sell cryptocurrency as well provides a cloud based wallet for Bitcoin, Ethereum and Litecoin. These are probably the most common cryptocurrencies at the moment.
  • It seems secure:
    • 98% of funds are stored offline
    • all traffic runs over encrypted HTTPS
    • 2-step verification on all accounts
    • Wallets are stored using AES-256 encryption
  • business model is straight forward – they charge a processing fee for all transactions:
    • USD to Cryptocurrency
    • Withdrawimng Cryptocurrency
  • It has an intuitve interface, a mobile app
  • It is solidly backed by several large financial instituions and investment companies.
  • Trading is possible 24/7 – yes Cryptocurrencies never sleep …. Exchange rates change real time !!!

The only two negatives I found so far are: if you transfer money from your checking account it takes usually 3-5 business days and at some spikes/drops it was hard to buy currencies (timeouts)

So go ahead sign up and start getting some cryptocoin…..next blog will cover, what we can do with these cryptocurrencies …..

A good external review of Coinbase can be found here

P.S. In the time of writing this little blog (less than 1 hour), the Bitcoin value decreased from $5,779.99  to  $5,552.48 USD. Welcome to the rollercoaster 😉

 

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