Crypto basics

Before investing in crypto assets, you really need a basic understanding of the technology. There are many books that you can buy and the 1st book I read on the subject was ‘Bitcoin for Dummies.’ Here is a brief summary of what you will learn:

  • Exactly how it is used
  • How to securely store your bitcoin
  • What you need to know about encrypting
  • Information on trading and crowdfunding
  • How its regulated
  • Where its banned
  • Services that help you with taxes
  • Bitcoin pros and cons
  • Ten ways to use it

Now we have a basic understanding, we can move on and buy, exchange and store crypto. To start with, look to invest a small amount of money into Bitcoin (BTC) or any crypto you fancy. As you get more confident with the technology, you can increase your investments.

Disclaimer: this is not advice, this is information only.

My preferred exchange

As I am writing this week’s blog, I have used a few exchanges over the last few years. I went from using Bittrex and Huobi a few years ago to Krakken, Coinbase and Binance now. By far, my favourite is Binance.

There are many things I like about Binance. The main positive for me is the low fees compared to other exchanges. It is very easy to use like the simple buy/sell option suitable for beginners.

You register your card details and deposit your Fiat currency (e.g. GBP). By the way Fiat currency is basically government backed currency. Once you have GBP in your account, you are good to go.

Click on trade tab and you will get a few options. The top option from the drop-down menu is convert. Click convert and you can swap your GBP for BTC or an alt coin. You can get BTC, ETH and a few other alt coins with your GBP but the options are limited. What you can do is swap GBP for USDT (US dollar token) and then you have more alt coins to choose from.

For an absolute beginner who just wants to buy a legit token like ETH you simply deposit GBP and swap it for ETH tokens. If you want another legit token like SOL, deposit GBP and swap it for USDT. When you have USDT, swap it for SOL and then you can just leave it in your binance account.

The wallets

There are 2 types of wallets. A hot wallet and a cold wallet:

  • Hot wallet – connected to the internet – your private key is stored in the cloud
  • Cold storage – trezor wallet – storing your private key offline – this is the most secure

You can store your crypto assets in an exchange (like Binance), in a hot wallet (like Metamask) or a cold offline wallet (like trezor). For more in-depth info read a crypto book or listen to a crypto podcast. This week’s blog is just letting you in on how I buy, store and exchange my crypto assets.

Personally, I have had some BTC stored in my cold trezor wallet in the past. But I have transferred it out and into my exchanges to buy more alt coins. Basically, I have been having a play with my crypto assets in 2021 and am getting more familiar with this new technology.

My assets are now held in a mix of exchanges and hot wallets. One of my preferred hot wallets is Metamask. I used it to get a very speculative coin earlier in the year. And have got a few other tokens that I hold in there also.

One of the alt coins I’ve done well on this year is SOL (Solana). I got into this with luck rather than judgement. Basically, I was told about x10 alt coins in January, and I was able to put $2k into each coin. SOL has done really well – I have sold 400 tokens at various stages and am left with 200. At this point, I am very bullish on SOL. This is because it is very fast (like 65,000 Transactions per second), cheap to use and there are a lot of legit developers building on the Solana network (have a little look into SOL!).

To buy tokens on the solana network you will need a wallet built for the solana network. I have the Phantom wallet and have some tokens in there that have been built on the solana network – like star atlas. Star Atlas is a blockchain-based, space-themed, grand strategy video game built on the Solana blockchain

The transfer

Basically, you can get into crypto very easily. You can buy an alt coin in an exchange like Binance and just sit on it and hope it goes up in value. Or you can have a play with it and try to understand this technology that is moving at a rapid pace. I’m in the latter camp and believe it is important that we understand digital assets and blockchain technology.

You can also get into trading crypto assets but at this stage in my crypto journey, this is not for me. I’m an emotional investor and know that long-term buy and hold is what suits me.

I’m assuming you know the basics and have an understanding of what blockchain is …. If you want more info get in touch in the comments and I am happy to send you some fundamental info I have learned over the last 4 years..

Anyway…

Let us look at transferring your assets from one place to another. Like from one exchange to another exchange. Or from one exchange to a wallet.

Once you start investing, you will find yourself sending your crypto assets from one place to another. Like when I purchased some star atlas on the SOL network a few weeks ago. See below:

  • Send X amount of SOL tokens from Binance to Raydium (so you can buy tokens on SOL network)
  • Go to SOL on binance and select send – this will give you your unique address
  • Go to SOL on Raydium and select receive
  • Copy SOL address on Binance and paste into Raydium
  • Your SOL will now be in Raydium after a short delay
  • Link Raydium to phantom wallet
  • Swap SOL to ATLAS (Star Atlas)

The important thing here is to pay attention to where you send your tokens. You need to ensure the address is the same form the send end as it is at the receive end. To do this, I make a mental note of the first 4 digits and last 4 digits. You also need to ensure you select the correct network. I would stick to small amounts of money initially as you get used to crypto assets.

For example, if I managed to send my SOL to an address on the ETH network, my crypto will be lost – and this could mean a significant loss through a lack of concentration.

Again, this is just a little blog to give you some insight from what I’ve learned this year relating to crypto.

Just to be transparent, I lost $300 only last week. This was because I was trying to stake AXS. I looked into it and tried to send AXS tokens from Metamask to Ronin (for AXS staking). I lost the tokens. I looked into it further and realised I needed to bridge my Metamask to my Ronin – then send the tokens. I tried again and was able to stake AXS on the Ronin network. As I say, 2021 is about learning for me and I am learning all the time. This $300 loss was harsh but it will add to my knowledge and understanding.

What to do

What I can tell you after 4 years of investing in crypto assets is that I’m convinced that digital assets are here to stay. Get your head into it and try and understand this new and exciting technology. Don’t just expect to get in and make a fortune with a 10X or even a 100X. Have a play and move with the times.

Personal finance basics … only invest with money you are willing to lose … don’t obsess about it … research … put a small portion of your investing money into crypto until you get more of an understanding.

At this point I’m going to introduce the experts. There are many experts but these 3 have provided the most useful content for me personally: Raoul Pal, Siam Kidd and Michael Saylor.

If you have gained some value from this week’s blog, let me know in the comments. And again, if you want further fundamental info, let me know and I’ll send you what I’ve learned to date…

If you want to get into crypto you can buy at an exchange like coinbase – free crypto … if you join via this link you get £7.45 free in crypto and so will I … then you get to do the same so everyone you introduce to coinbase you get free crypto they get free crypto – a win win!!

Book of the week: Bitcoin for dummies, by Prypto. Not the best crypto book but it was my 1st book on this exciting new technology, and it will help you get started. It will give you all the info you need to get you up and running.

For a hard copy visit the excellent Imagined Things Bookshop: Imagined Things.

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