Tips for Starting with Bitcoin and Cryptocurrencies
One of the most rewarding experiences of my life, both financially and logically, has been buying and managing cryptocurrencies like Bitcoin, Litecoin, Ethereum. Like learning any other new tech, I made rookie mistakes along the way, but learned some best practices along the way. Check out these tips for starting with cryptocurrencies!
You Don't Need to Buy a Whole Coin!
At present bitcoin's price hovers around $10,000 USD -- and that's a lot of money! Many of my friends that I preach cryptocurrencies to will say "I can't afford that!" What most people doesn't realize is that you can buy fractional amounts of each coin!
You can buy $1 of bitcoin, $0.01 of bitcoin, 0.0000001 bitcoin, and so on. The same goes for other cryptocurrencies -- you don't need to buy, sell, or send in whole numbers!
When Sending Crypto, Send a Small Amount First, then the Larger Amount
Sending cryptocurrency can be a nervous process -- even an experienced crypto HODLer like myself sweats a bit before hitting the button. Since wallet addresses are super long strings of random characters, unlike an easily readable email address, that nervousness is warranted.
To calm my nerves I always send a very small amount of cryptocurrency first, wait for confirmations, and then send the larger amount:
Sending the smaller amount is like dipping your toes in the water before jumping in. I highly recommend this practice to avoid making mistakes like sending to a wrong/invalid wallet address or sending to the wrong type of waller.
Use an Exchange in Your Region
A good practice with regard to any financial partnership is connecting with an entity in your region. The same holds true with cryptocurrency. The reason for this recommendation boils down not just to language but law -- if you trust the laws in your country, you will be able to take action if the exchange does something shady.
In the United States, where I live, I use Coinbase and Gemini, both of whom have a good reputation. While I also have and hold cryptocurrency accounts at Binance, which is based in Europe, I do my most critical cryptocurrency transactions domestically.
Use a Live Exchange to Buy
While I like Coinbase as a wallet provider, buying on the main Coinbase website isn't ideal -- I'm held to buying at whatever price they provide me. It's the same with a brokerage account on the stock market: always use a limit buy, not a market buy. I once paid $50 over price on Coinbase than the Coinbase Pro real-time price.
Instead of using the main Coinbase site, I should have used Coinbase Pro, which is a live exchange to buy cryptocurrency. With Coinbase Pro I could have set my price and bought at that price, instead of paying what Coinbase wanted me to. Always buy your crypto at the price you set!
Consider Nexo, BlockFi, or Celsius Network to Earn Interest
While I've invested in cryptocurrencies for many years, and continued to hold them, I never gained any interest or benefit from holding them apart from price changes. Having bought into bitcoin at $300, I'm quite happy, but it would have been nice to have earned interest along the way!
Learning the world of cryptocurrencies can be scary but, as more of the investment and monetary world grows into tech, becomes essential. The sooner you get acquainted with crypto the better! Use these tips to guide you safely in the digital currency world!