Finance Best Posts: Cryptocurrency Basics: Part 2 - General Concepts & How To Invest

  1. Slyk
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    Slyk God made a prophet.

    Jan 2, 2018
    I've been breathing cryptos for the past few weeks now (been spending 3-4 hours a day educating myself and trading) and figured since there appears to be a following + interest here that it'd be worth compiling some thoughts to get some of you started on this stuff. I've got a handful of topics jotted down on a notepad, so if this goes well, i'll put out a series of these threads..

    What is Bitcoin/Ethereum/cryptocurrencies/blockchain?
    I previously touched on a bunch of this here:
    Cryptocurrencies: Basics - Part 1
    let me know if you have any follow-up questions and i'll try to answer


    "Cryptocurrencies"
    While Bitcoin may be the only coin with a household name at this point, there are 1000+ currencies with more being released almost every day now. Hence, the plural tense.


    Why/How do cryptocurrencies have worth/value?
    I hear this a lot. "That's fake money". "You can't buy anything with Bitcoin". "Bitcoin is a ponzi scheme"... no no no. This is very much an emerging area, and you can't walk into Meijer's and pay for your groceries with Bitcoin or Bitcoin Cash...but in the not-so-distant future you will. Today, Bitcoin (BTC) can be used to purchase goods at this running list. I have personally made a couple purchases with Bitcoin, but it's very much in its infancy stages and nobody knows where it's going to land (or if BTC will even remain king in the future) so for most people right now it should be treated as an investment opportunity today.

    Bitcoin has value because people believe it has value. It's a similar concept to why we believe that paper money has value. As long as people continue to invest money in it, it will continue to have real world "worth".

    On top of this, there are a finite number of Bitcoins that will ever be released into the market. That finite number is 21,000,000. The last Bitcoin will be injected into the market in the year 2140. Bitcoins are released as transactions are verified (through a process called "mining"). Miners are rewarded a portion of a BTC for verifying a transaction.

    I might touch on mining more in a later thread.


    What is an "altcoin"?
    Any of the 1000+ cryptocurrencies outside of Bitcoin (some may argue that Ethereum, Litecoin, & Bitcoin Cash are considered in this list) are termed "altcoins" (short for "alternative coins"). These 1000+ coins range from functioning as bitcoin competitors to facilitating international payments to digital wallets to ensuring truly anonymous transactions (privacy coins) to many various applications. Not all of these have aspirations to be the new Bitcoin. All of these can be invested/purchased/traded at many of the large cryptocurrency exchanges.


    Am I too late?

    Not only is it not too late, but right now is a prime time to jump in. There is a TON of money to be made and it moves FAST. Don't be the dumbest guy in the room when your friends are talking about how they got rich off this stuff in 5 years because you didn't invest. And don't be surprised when it happens.

    I knew nothing about any of this 6 months ago and knew only little about how a stock market worked. Put in some time to research and you'll make money.

    For example, I just found a notepad I put together when initially looking into this stuff back in July... my notes say that Ripple (XRP) was $0.27, Monero (XMR) was $51.69, Dash (DASH) was $181.41, and Litecoin (LTC) was $44.75. Today, those figures are $2.27, $382.19, $1106.93, and $248.85... which equates to 6-8 times their previous value. I missed out on many of these purchases then, but even today I think that all of these are great buys and I anticipate these + many others to continue to grow at a similar rate.


    I only have ___ monies to invest. Is that too little?
    Even if you can only afford to throw $20 into it, it's still a great opportunity to make money. That said, only invest as much as you're able to lose.
    Edit: keep in mind that due to congestion on the bitcoin blockchain network, fees are pretty d--- high right now ($10-$15) . That fee comes into play when wanted to transfer your money from gemini/coinbase/gdax to a full exchange (binance/bittrex).


    How to invest
    I touched on some of this in Part 1, but I've learned a few things since then so will reiterate some here.

    To convert fiat money ($, €, etc.) into one of the main crypto coins, use one of the following:
    1. Gemini - pros: smaller fees. cons: not as intuitive of an interface, only offers BTC & ETH
    2. Coinbase - pros: easier GUI, money instantly available, offers BTC, ETH, LTC, & most recently BCC, will add more coins soon. cons: higher fees
    3. GDAX (subsidiary of Coinbase...if you sign up for Coinbase, then you also have a GDAX account) - pros: no fees. cons: you have to wait for your bank account to confirm your fiat transfer before investing.
    Create an account (it's free). Verify your credentials. Link a bank account. Transfer money. Wait the 4-5 days to process.

    If all you want to do is invest in the main coins, then you're done.

    To convert your BTC into one of the many altcoins, use one of the following:
    1. Binance - pros: smaller fees due to their use of BNB to facilitate trades, have a large variety of coins listed
    2. Bittrex - pros: have a large variety of coins listed. cons: slightly higher fees, currently (1/1/18) not accepting any new signups until they further update their infrastructures to support larger traffic volumes.
    If your desired coin isn't on one, then it's likely on the other.

    Create an account (it's free). Transfer BTC from Gemini/Coinbase. Buy.

    FYI: I've included my referral link on the Coinbase & Binance links above. If you're considering starting/joining then I'd appreciate ya using em.
    https://www.coinbase.com/join/593f11a619ddf609158a2b3d
    https://www.binance.com/?ref=18096131


    Security
    Cryptocurrencies generally aren't ensured. You are responsible for keeping your coins safe.

    DO:
    Use 2FA (Two Factor Authentication) via Google Authenticator or Authy
    Consider using a new email address for this stuff
    Use 2FA on your linked email account(s)
    Backup your 2FA programs on a piece of paper (not on a notepad on your computer)
    Make sure you're using the correct URL when accessing exchanges. Bookmark them.
    Consider storing your coins offline

    DO NOT:
    Use 2FA via SMS text messages (all it would take is someone to clone your SIM card and then they'll get your texts)
    Use unsecure wifi networks
    Use third party apps to trade on your phone with (FYI: I don't trade on my phone at all)
    Use the same password across exchanges
    Expose your private key (I'll talk about public & private keys on a later thread)

    All of that said, exchanges themselves have gotten hacked in the past. People have lost millions. If an exchange itself gets hacked then it won't matter if you've taken all of the above precautions -- if your coins were stored on the exchange and they were to get hacked then they would be gone forever. Because of this, there is something called "cold storage" where you can take extra precaution and store your funds off of the exchanges. I'll talk about these cold storage options in a later thread.

    Hopefully this scares you into being safe and not into avoiding cryptocurrency altogether.

    Again: only invest what you're willing to lose.

    25182373_10156031956303408_3240038631960396132_o.jpg


    Where to get your news/info
    coindesk
    reddit
    cointelegraph
    bitcointalk
    read the whitepapers


    Tools
    tradingview
    coinmarketcap
    coingecko
    coinscanner
    changelly


    Portfolio Trackers
    blockfolio
    coincap
    delta


    Mention Group
    Join the mention group: HODLGANG to get alerts on crypto


    Future thread topics
    public vs private keys
    transferring coins
    mining
    satoshi
    cold storage
    know your memes
    strategies
    dual currency trading
    the future of bitcoin
    forks
    chart reading
    arbitrage
    setting stop losses & conditional buy orders
    taxes & the IRS
    volume/depth
    eliminating greed & fomo


    if you end up making money off of these, then i wouldn't turn down donations
    BTC: 1ByE3HDdqCQZKj45zfnCMkqTf3qCB9anb8
    ETH: 0x3B2287769566C2bBB1d6a98bc363160C177a6098
    LTC: LRmCyDLA6qKN3z5xFj1qxfUKWQ8fPJTsSN
     
    Last edited: Jan 13, 2018
    Apr 27, 2024
  2. Slyk
    Posts: 8,538
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    Slyk God made a prophet.

    Jan 2, 2018
    mentioning people who showed an interest in this stuff in the past that i didn't mention earlier today:
    @ThatDudeD12 @Sqrt Sqrt @Sav Stanfield @Modest @TheTrueGeneral @King V @SliK @KWO @Jay

    and those from the finance thread:
    @Jet✞ @Autistic Meme @MilesMorales @Chad Warden @blair @El Plus Member @Skippy @Fazers @Dank Sinatra @Lucifert 2R @Tenski @Mike Tyson @Koolo @Poohdini @Black Jesus @Joey @Rowney

    join the HODLGANG mention group if you're interested in this stuff moving forward. else, ignore.
     
    Apr 27, 2024
  3. Slyk
    Posts: 8,538
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    Slyk God made a prophet.

    Jan 2, 2018
     
    Apr 27, 2024
  4. icecube
    Posts: 9,521
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    Location: London

    icecube West Coast is the Best Coast

    Jan 9, 2018
    Thanks for getting back to me man. I figured it out in the end (its not simple without reading/watching instructions).

    I'm now the proud owner of both Ripple and Tron as we as the standard BTC, ETH and LTC.

    Your threads have been an absolute godsend! Fingers crossed we all get rich off this. If i stay flat or a tiny bit of profit i will no doubt put an extra £200-£500 in per month on this.
     
    Apr 27, 2024
  5. Mike Tyson
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    Mike Tyson big cuntry's alias

    Jan 4, 2018
    Great thread @Slyk.

    I been mining bitcoin for a week now, figured that was the best way to get in for me: if I can eventually accumulate one bitcoin, then it is as an option to buy in at bitcoin at 5k (cost of the hardware). In addition, I continue to get rewarded with BTC in perpetuity (well, I guess just until the hardware no longer functions/is serviceable).

    I'm then trading using my BTC earnings. I don't intend to convert back to CAD until at least 6 months (at which point I'll recover my investment cost, and leave the rest to grow for 2-3 years).

    Hope to have 100k in holdings (via trading and mining) in 3 years.
     
    Apr 27, 2024
  6. K18 El Duderino
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    K18 El Duderino Welcome to the Dopamine Dome

    Jan 3, 2018
    Thanks @Slyk for looking out for the homies. We owe one brotha[​IMG]
     
    Apr 27, 2024
  7. Sav Stanfield
    Posts: 7,478
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    Jan 2, 2018
    also Binance sounds like YG made his own bryptoburrency
     
    Apr 27, 2024
  8. JMG
    Posts: 15,884
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    JMG Teflon

    Jan 3, 2018
    im right there with you. i am comfortable with binance but would like them offline. doing research myself. anyway great thread.. i made a lot of notes about 6 months ago, dont even wanna look at them. looking forward to your IRS thread. thats really the only thing im confused about.
     
    #23
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  9. Slyk
    Posts: 8,538
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    Slyk God made a prophet.

    Jan 3, 2018
    :emoji_thumbsup: i received my nano s a week or so ago and have been reading more into it these past few days before setting it up. not gonna lie -- i'm a little terrified of transferring my coins off of the exchange and onto this magical device... there's a lot of blind trust there that i'm trying to un-blind by learning more about how it functions.
     
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    Apr 27, 2024
  10. DKC
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    DKC hank trill

    Jan 2, 2018
    Thanks for this @Slyk. Once I get my taxes sorted out and know how much I can invest I'm gonna dive in.
     
    #14
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  11. Nick
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    Nick (;

    Jan 2, 2018
    the usd is backed by the "full faith of the us government" . It used to be a gold
    Backed economy but they changed it some time ago. Basically it's backed by good will lol . Confusing
     
    #12
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  12. Slyk
    Posts: 8,538
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    Location: Detroit -> Cali

    Slyk God made a prophet.

    Jan 2, 2018
    yep just sending my BTC to Binance/Bittrex and buying XRP there.
     
    Apr 27, 2024
  13. Base Reality
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    Base Reality AKA Chewie

    Jan 2, 2018
    This is awesome @Slyk :daps:

    Another good tool is CryptoCompare
     
    Apr 27, 2024
  14. Nick
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    Nick (;

    Jan 2, 2018
    Paper money ain't backed by gold .
     
    Apr 27, 2024