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Intro

Cryptocurrencies are increasingly used to finalizing online transactions. In the US we can already pay Bitcoins not only on the Internet, but also in the selected stores. Just a simple application on smartphone and we can make instant and secure transactions. The popularity and number of digital currencies are increasing day by day. So, what are some advantages of Bitcoins and how can we get them?

Until recently no one really knew what cryptocurrencies where. A cryptocurrency is an innovative, distributed accounting system that holds possession information in contractual units. It does not have a pyshical form, so it cannot be deposited into a traditional bank account. Cryptocoins are typically stored on computers or smartphone applications, called de facto wallets, which are owned solely by the owner. It may happen that you need to have a mobile phone registered with your local operator (for authentication) to operate the cryptowallets.

Is Bitcoin the future of money?

We can’t be certain for sure... Bitcoin's origins date back to 2008, when the global financial crisis was over, and individual states, banks and institutions were increasingly in serious financial trouble. This all led to a situation where the level of confidence in traditional payment methods began to fall heavily. It is no wonder that at that time, Satoshi Nakamoto came up with the idea of creating a currency independent of banks, governments and institutions. The currency is available wherever the internet or mobile phone is available. In some countries like the United States is still not subject to any legal regulations. This means every profit from Bitcoin is not taxed. So, if someone sold his unit and earned it, then by law he would have to pay tax on it, however, in this situation such a law doesn’t exist. What are the advantages of this currency? Surely the speed of transaction and convenience. Paying is done in real time, you do not have to wait to post the funds (verification process takes only few to tens of minutes). For many, the key advantage of Bitcoins is that they provide anonymity for transactions. The disadvantage, however, is its highly used by criminals. Anonymity, speed and lack of control by state and international institutions make Bitcoins the preferred choice for illegal businesses.

Where to get cryptocurrency?

Most people choose to simply buy crypto on different exchanges like Coinbase (sign up through this link to get $10 of free bitcoin with your first purchase of over $100 on Coinbase). Of course, buying Bitcoin is not limited to Coinbase, there are other special exchanges like Gemini or LocalBitcoins, where Bitcoins can be purchased straight from their owners. It is also possible to launch a process known as mining, which is the process of verifying transaction and adding it to the blockchain ledger (you can learn more about blockchain technology here, I can assure you it is very secure). However, for mining, it is necessary to have strong computer hardware, because coin mining machines (like special GPUs) are devices that perform complex and difficult network operations.

Will crypto replace traditional money in the future?

The issue of virtual currency is still controversial as it is a real competition for money issued by central banks. Rather it is impossible for crypto to replace traditional currencies in democratic countries, as they are not subject to any state control. Nevertheless, it is important to admit that Bitcoin is a convenient and easy way to make online transactions in the present day.

How to trade Bitcoin with Altcoins?

I believe Bitcoin and all the other alternative coins are nice way to learn trading, technical analysis, the way the speculations affect the market etc. A lot of bitcoin exchanges like Binance, Kraken, Bittrex (which is my favorite) or Poloniex are very cheap, as opposed to equity trading where you must pay $5 or $7 per trade. Which mean that the fees are very low and you can play with as little money as you wish. My initial investment was just $200 dollars.

What are important factors for trading or investing?

If you want to invest long term you have to do your own research. Which mean that it would be nice if you read the whitepaper of your favorite cryptocurrency and find the purpose of it. 

It is just like the fundamental analysis, where you look at the dev team, maybe existing competition, upcoming events, and most importantly how many people support it. Trust me, crypto currency that has a great purpose but no community support, will most likely fail. This means, you have to look at the marketing and promotion of particular coin (aka Twitter, Reddit, volume traded). 

Also, there is numerous shit-coins on the exchanges that are having a great volume traded. This is very fascinating and kinda odd, however, many speculators use that for the advantage of their own. They wait till the coin is undervalued (using Technical Analysis, Patterns and some Indicators), they buy huge volumes of it pumping the coin price very high and dumping it right after. Traders that are “greedy” will jump in on the investment late and lose money (remember! never buy fresh highs). It is important to understand trends and science behind indicators to carefully analyze each trading investment. 

Also, trading is 24/7 so it will never stop. Sometimes you can go to sleep and wake up next morning with 20% gain or 10% loss, keep that in mind (if you are day trading remember to activate stop loss or close your position before you go to sleep). I you would like to be a trader on Forex, I believe crypto is a good way to start and gain some experience.

Here I am giving you the opportunity to learn Technical Analysis. 

So, how to get started investing or trading?

Note: This is not the only way to do it, however, I found it the most convenient and the cheapest.

First you need to create an account on Coinbase, where you can buy Bitcoin, Ethereum and Litecoin for the market price paying only little 3% convenience fee if you choose credit card option. You could also choose Bank Transfer which may take up to few days (coinbase will lock the current price of your purchase but your new coins won’t appear on your account just yet).

Coinbase is using some verification process for the investors with large capital, so have your drivers licence ready if you are planing to invest more than 200 bucks.

If you decide to use coinbase, click on this link and you will get $10 extra credit for your first crypto purchase of $100 or more.

Now you have to create an account on one of the exchanges.

Here is a link to the comparison of some like Bittrex and Binance.

Personally, I like Bittrex and Binance, because they allow you to use some chart tools right on the current price chart (Fibonacci retracement, RSI, MACD and more are available). The only con I can find is that you cannot use margin trading.

If you would like to set it up, please use my referral link!

Now, since you have created the account on some exchange you have to transfer money (aka Bitcoins) to the wallet on the exchange. Remember always use the right address (aka public key). Otherwise, your money will not go to your account but to some different one or will be vanished forever.

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Some other interesting topics:

If you would like to know all the science behind the security and technology (aka blockchain) of bitcoin watch these videos.

If you decide to go long (hold your coins), remember to store your coins properly into a paper or hardware wallet. Always use 2FA.

Here you can do your own tech analysis, basic version of TradingView is free and allows you to work with three indicators. Which is great for the beginners. Also there are many people that post their own ideas about the future trends. Some of them are more/less experienced.

What is an ICO. Learn Here!