Over the past couple of weeks, I have gotten tons of personal messages asking questions about Bitcoin and Cryptocurrency in general. Those questions have ranged from how to get into it, what my strategy is, what types of wallets I use, and so on. I thought that it could be helpful for me to just answer some of these questions, put it into a blog post, and just use it as a resource to send to people when I’m asked about it so I don’t have to have the same conversations over and over.
[DISCLAIMER: THIS IS NOT FINANCIAL ADVISE. IF YOU’RE LOOKING FOR FINANCIAL ADVISE, PLEASE SEEK THE HELP OF A PROFESSIONAL]
What Is Bitcoin & Cryptocurrency?
According to Wikipedia:
Bitcoin is a cryptocurrency and worldwide payment system. It is the first decentralized digital currency – the system works without a central repository or single administrator. The network is peer-to-peer and transactions take place between users directly through the use of cryptography, without an intermediary. These transactions are verified by network nodes and recorded in a public distributed ledger called a blockchain. Bitcoin was invented by an unknown person or group of people under the name Satoshi Nakamoto and released as open-source software in 2009.
A cryptocurrency (or crypto currency) is a digital asset designed to work as a medium of exchange using cryptography to secure the transactions, to control the creation of additional units, and to verify the transfer of assets. Cryptocurrencies are classified as a subset of digital currencies and are also classified as a subset of alternative currencies and virtual currencies.
How Can I Get Started?
If you’re intrigued and want to make your first purchase, I recommend using Coinbase for someone new. Coinbase is an app that you can download from the Apple App Store or the Google Play Store. You can also access it on your computer, and use it there. Just whatever you prefer. It’s super simple to use, and all you have to do is sign up and you’ll be ready to buy your first cryptocurrency!
If you want to sign up, follow the link below. https://www.coinbase.com/join/59e78956bf2dea01185537f6
What Are Alt-Coins & Where Do You Buy Them?
Alt-coins are the alternative cryptocurrencies launched after the success of Bitcoin. Generally, they project themselves as better substitutes to Bitcoin. The success of Bitcoin as the first peer-to-peer digital currency paved the way for many to follow. Many alt-coins are trying to target any perceived limitations that Bitcoin has and come up with newer versions with competitive advantages. There is a great variety of altcoins.
There are tons of exchanges out there that you can buy altcoins from. Personally, I use Binance. It’s a great exchange and has the most exchange volume of any exchange around. All you have to do is sign up, and you’re ready to buy your first alt-coin!
What Alt-Coins Do You Like?
Personally, I’m interested in these alt-coins:
Why Do You Like Those Alt-Coins & Not Others?
Just because I named these six doesn’t mean I don’t like the others. There are literally hundreds, if not thousands of Alt-Coins out there. These six to me personally stand out from the rest and offer real solutions that I think are valuable. I’m interested in cryptocurrencies that solve real-world problems and provide real value, and I think these specific ones I mentioned do that. I’m sure that I’ll add more to this list at some point in the future.
I really like Ethereum because it’s more than a cryptocurrency. It’s a decentralized application platform that allows users to build applications that run exactly as programmed without any possibility of censorship, downtime, or fraud.
I really like Litecoin because it was created to be complementary to Bitcoin. Litecoin, like Ethereum, is also decentralized. Charlie Lee, the CEO of Litecoin explains the vision of Litecoin this way: Think of Bitcoin as the currency of the future that you buy large purchases such as homes, boats, cars, etc. with. Think of Litecoin as the currency of the future that you buy small purchases such as coffee, food, gas, etc. Also is a very fast processing cryptocurrency with minimal fees.
I really like Iota because it was created to allow micro and nano transactions with no fees. That means if I want to send you $2 worth of Iota, I will not have to pay a $1.49 fee for sending it to you. It is also decentralized, but it does not operate on blockchain technology like the other two previously mentioned.
I really like Monero because, of its privacy. Monero is a secure, private, and untraceable cryptocurrency. It is open-source and accessible to all. With Monero, you are your own bank. Only you control and are responsible for your funds. Your accounts and transactions are kept private from prying eyes.
I really like NEO because I think it has the potential to revolutionize our traditional economy. NEO is a blockchain project that utilizes blockchain technology and digital identity to digitize assets, to automate the management of digital assets using smart contracts, and to realize a “smart economy” with a distributed network. NEO has been created to shift our traditional economy into the new era of the “Smart Economy”.
I really like OmiseGo because, through the OmiseGO network connected to the Ethereum main net, anyone will be able to conduct financial transactions such as payments, remittances, payroll deposit, B2B commerce, supply-chain finance, loyalty programs, asset management and trading, and other on-demand services, in a completely decentralized and inexpensive way.
What Wallets Do You Use?
I really like Exodus Wallet. It supports all kinds of different cryptocurrencies, and I find it convenient to be able to have them all in one place rather than spread across 100 different wallets.
I also recommend getting an actual hardware wallet. Getting a hardware wallet is the only actual way to make sure that your cryptocurrency is never stolen. Desktop wallets and applications, even though as seen as generally safe, are always at risk. A hardware wallet will ensure that no one will ever touch your crypto except you. The Ledger Nano is super nice.
What Is Your Strategy?
There are a few strategies you could use. You could just buy and hold long term. You could learn to day-trade. My strategy is kind of a combination of both, and I think it’s pretty simple.
I use dollar cost averaging every month to invest in crypto. I invest $100 every payday. You can invest whatever you can afford. Maybe it’s less. Maybe it’s more. Whatever you can do. Basically, I split $100 three ways between Bitcoin, Ethereum, and Litecoin, or Bitcoin, Ethereum, and OmiseGo, or whatever. You can also choose to split your money however you want on whatever currencies you want.
After I buy, I keep watch on my investments. I usually stay plugged into GDAX if I’m around my computer. Typically, my rule of thumb is once my investments make profits of anywhere between 20%-30%, I will take the profits while still holding my original investment. Sometimes they get higher than that, but I try not to get greedy. Usually when I get greedy, I end up losing money. After I take that profit off the top, I reinvest during a price dip and basically start the process all over again.
So, it looks like this:
Buy $100 Bitcoin ——-> Goes up to $130 ——-> Cash out the $30 profit and leave my original $100 ——-> Bitcoin price decreases due to correction ——-> Reinvest the $30 profit during a price dip, thus increasing my overall holdings.
And from there, I just wait for the price to recover and I repeat the process.
Dollar-cost averaging allows me to keep a regular stream of income going into cryptocurrency, balances out some of the highs and lows, and allows me to increase my overall holdings. Cashing out profits and reinvesting also allows me to increase my overall holdings without having to continue to throw more money at it.
Now, you have to be careful here. The point of this is to re-invest and increase your holdings. Make sure you’re re-investing at a lower price than what you sold so that you’re getting more coins. If not, you’ll come away with less holdings and less money.
What Do I Think About Bitconnect?
Stay away from Bitconnect. It’s a Ponzi scheme.
What Resources Do I Recommend?
I keep watch on these on a daily basis:
I usually just watch Cryptobobby and Coinmastery both on YouTube daily. I recommend subscribing and checking out their content. Really good stuff!
I’ll eventually add more to this in the future. I plan on updating this, and adding more content on crypto. Maybe updated strategies, investments, my portfolio, and so on. Hopefully this is helpful!