Crypto Investment 101
WELCOME crypto punk…
so you want to open a wallet, invest in some Ethereum, and get on the crypto train?
I have written this guide because I wish there was something around like this for me when I was first getting my head into the blockchain.
I learned the steps to open a wallet and invest in various coins through following tip offs from of a series of experienced people, often via message, and who all seemed to have different opinions.
Often because of the complexity and energy required to teach someone and answer questions as they become accustomed to the crypto world - I followed small nuggets of information, frequently finding myself unknown world with money on the line, and no idea of what to do next.
DISCLAIMER: In no way am I a crypto professional - this is not financial advice. There are many, much more experienced crypto-investors out there.
The main thing with crypto is that you must be prepared to lose everything you invest.
This guide is simply what worked for me, and to serve as an entry level for those who wish to learn more about how this peculiar and interesting world of cryptocurrency and blockchain works.
1. CHOOSE A WALLET
I have used various wallets in the past, and for total beginners, I would recommend Exodus Wallet as a great place to begin. It has a great user experience, really good for visualizing your assets, and it makes it easy to trade for other coins with exchange capability within the app. This means you don't need to use third party platforms to trade for other currencies.
Exodus can be downloaded as an app on phone and synced across other devices like a tablet or computer.
The computer version of the app shows more data for analysis, and works well synced with a phone counterpart.
More steps here: https://support.exodus.com/article/37-how-do-i-get-started-with-exodus
2. BACKUP/SECURE YOUR WALLET
Once you have downloaded your wallet, you will need to secure it with your secret 12 word recovery phase. This is a master key which is basically the keys to your crypto bank account if you log out or need to access your wallet from a different device.
This phrase can be hacked, so it is best to keep a copy hand-written down somewhere safe - avoid the easy option of taking a screenshot or emailing it to yourself - this can fall into the wrong hands too easily.
You can also set a passcode for each time you open your exodus wallet for an added level of security.
More about Seed phrases here: https://support.exodus.com/article/925-everything-you-need-to-know-about-the-secret-recovery-phrase#
3. CHOOSE A CRYPTO PURCHASING SERVICE/RETAILER
In order to purchase crypto currency, you will need to create an account on a third party crypto retailer service. I use https://easycrypto.com/nz
You will need a driver's license and your IRD number.
Bare in mind that all transactions you put through here will be searchable by the tax man.
Your account can take up to 48 hours to approve before you can purchase anything.
Once it is approved, move to the next step.
4. FIND YOUR WALLET ADDRESS
Just like a bank account transfer - sending/receiving blockchain assets works like sending to different account numbers.
It is easy to receive a coin or a token in your Exodus wallet. You will need to toggle on / enable that particular currency on in the settings part of your wallet first.
Once you have all of the currencies you wish to watch/receive, you will see when clicking on them, that there is a separate wallet address for each type of crypto currency. For example, click the BTC (Bitcoin) tab, and click receive. You should see something like below.
Copy this address to your clipboard (Ctrl+C), for entry in step 5 below.
More steps here: https://support.exodus.com/article/33-how-do-i-receive-a-crypto
5. PURCHASE CRYPTO COINS
NOTE: Nobody knows what is going to happen to the crypto markets, things can change/drop/crash and go to the moon over night - so be conscious of how much you invest at the beginning, and be prepared to lose it all.
There are many different types of coins, all with their own values and vision for the future of the blockchain. It can pay to research and make sure what you are investing into aligns with your personal values.
Navigate to your www.easycrypto.com/nz account and input the $$ amount you would like to purchase of the corresponding coin/token - e.g. $500.00 NZD of BTC.
Click buy now.
Enter your wallet address (from above) and click purchase. Make sure to supply to correct wallet address for the corresponding coin/currency.
NOTE: It is always best to purchase when prices are low, and sell when prices are high - so often it will pay to watch the market for a period of time leading up to your purchase.
NOTE: There are provider fees when purchasing crypto through online platforms such as Easy Crypto, so you will not receive the entire amount you have purchased.
Your purchase order will be added to your account, and your currency should transfer within minutes/hours depending on the status of the service.
If you make multiple purchases on Easy Crypto over time, you can come back and check your account to see how much you have invested and how much that total has increased (or decreased) over time.
6. RECEIVE YOUR STASH
The next time you open your Exodus wallet, you will hear a coin jingle, and your total purchase (minus fees) will appear in your wallet.
You can stop here and take a breather, with your crypto secured in your account.
HOLD !!!
ADDITIONAL POINTS TO CONSIDER
EXCHANGING WITHIN EXODUS
As time passes, you may wish to diversify your holdings or invest profits from your initial investments into other coins.
You can do this through the exchange tab within the exodus app.
FEES: there are charges called "GAS Fees" each time you exchange currencies or move an amount into a separate wallet, be weary of these each time you trade/transfer.
STAKING
You can also look to "Stake" certain coins and earn crypto rewards - similar to placing your money in traditional bonds for a period of time. I am not an expert on staking. See here for more info: https://blockdaemon.com/blog/staking-101-an-introduction/
HAVE AN INVESTMENT PLAN
When investing hard earned money, it is always good to have a plan for what the purpose of your investment is. There are many ways to do this, and many more experienced people to learn from than I.
For example:
Long term - You could plan to simply forget about your investment, and hold it in your wallet for a long period of time (hopefully increasing it's value) and cashing out years down the track.
You could invest now with a plan to pull out your initial principal investment in 6-12 months, and keep the remaining profit in your wallet (hence losing no $$ on your initial investment).
Once you make gains on your investment, lock the profit into a stable coin (which holds it's value against USD) and is a way of locking in profits whilst keeping them on the blockchain to use/reinvest further down the line. Stable coins are not theoretically affected by the constantly fluctuating market prices.
Keep in mind that when/if you cash out your stash into your bank account, you may want to talk to an accountant to make sure you have things handled from a tax perspective before you do so.
THE BLOCKCHAIN WORLD
Once you have a handle on the way cryptocurrencies work, you can use your crypto (in particular your ETH) to start trading for NFTs (Non-fungible tokens) on the blockchain metaverse.
www.opensea.io is like a trademe version of digital tokens and assets for sale and display.
To take part here, you will need to download an additional crypto wallet, called Metamask. This wallet functions as a browser plugin and also as an app on your device.
You will need to send funds directly from Easy Crypto to your Metamask wallet, or simply transfer from your Exodus wallet - just be wary of GAS Fees each time you transfer wallets. Metamask enables you to trade your crypto on websites through your internet browser.
Hope this helps make things easy whānau.
G