Friday, January 19, 2018

Buying Your First Bits of Cryptocurrency

Pardon our dust, we're expanding!

Since I haven't really used this for iPhone/iPad/iPod stuff lately I figured I'd expand a bit further.  Why? Why not!

So, what first?

I've been playing with Cryptocurrency since 2013, back when the mention of it brought blank stares, rolled eyes, expressions of my suckerdom or statements about how it's only useful for buying drugs, and worse, on the dark web.  Fast forward to now and Bitcoin, Litecoin, Ether, Ripple, etc are all over the news and those who laughed and scoffed now come loaded with questions.  Rather than sending that same email yet again I'll do a nicer job (I hope) and send some traffic here.  Ready? Ok.

There are enough good explanations of what cryptocurrency is (and isn't) online so rather than writing another I'll find one and link it here later if there's any interest.  Instead, let's talk about how you can get involved.

WARNING

Nothing I say here should be construed as financial suggestions, recommendations or solicitations to spend your money.  Cryptocurrency is wildly speculative and while it's been going up a lot lately it has a history of collapsing and losing up to 75% of its peak value.  Look at late 2013/early 2014 when $1200 Bitcoins dropped to $350 in a few weeks.  IF you choose to put money in, make sure it's money you can afford to lose.  DO NOT spend the rent,  your retirement, your kid's college fund, your other kid's piggy bank, etc.  You could make money.  You could also lose it all.  I'm absolutely serious.

Getting started

Watching it all

I highly recommend the iOS app Crypto Pro for watching the space and the 1400+ (as of Jan 19, 2018) cryptocurrencies out there.  It's only $5, easy to use and packed with information including a great news feed.  Oh, and the developer is one of the nicest people I've met by logging a suggestion for an app.  It also has an Apple Watch app if you're of the wearable persuasion.  You can also create a portfolio of your holdings so you can see, at a glance, how much you've made or lost.   Free apps?  I've looked at, but haven't extensively tried, a few so if you use any of these leave a feedback with your thoughts.  On iOS: HODL, Blockfolio, Coin Ticker, and if you want a real-time view of how prices change there's CoinCap (bonus points for the Minecraftiness).  I've used the Android apps even less so please let me know what you like. These seem to be good starting points: Cryptonator, BlockfolioCryptoCurrency Bitcoin Altcoin Price, CoinMarketApp.  

Turning dollars into bits

The first thing you'll need is a way to exchange dollars for cryptocurrency.  The easiest way to do that is to register an account Coinbase.com and download their mobile app for iOS or Android.  Complete the application process, link a checking account and/or credit card then you'll be ready to buy Bitcoin(BTC), Litecoin(LTC), Ether(ETH), and Bitcoin Cash(BCH) with dollars(USD).  That Coinbase link, by the way, is my referral link and if you sign up we both get $10.  You're free to skip it if that makes you uncomfortable.

A few notes:

  • It takes about a week to move dollars to Coinbase.
  • If you buy Bitcoin or other currency with money pulled from a credit card or checking account you'll pay the price at the moment you confirm the purchase but those coins won't arrive in your Coinbase account for a week.  
  • You can transfer money from credit/checking to Coinbase and leave it there for a future purchase.  If you use that money you also pay the price the moment you confirm but you get the coins in a few minutes.  
  • If you're buying for the long-term that delay shouldn't matter but if you want to be able to buy other cryptocurrencies (see below) on short-notice you'll want to have some cash waiting for you.

Picking your first purchase

Coinbase allows you buy four different coins with USD so which should you buy? It depends on your goals.  If you think one will appreciate faster than the others you should clearly buy that one.  There's a ton of information online about each coin's history, purpose, features, usability, etc so I won't go into too much detail here.  If your goal is to buy another cryptocurrency the best choices are Bitcoin and Ether since they're the most commonly-accepted coins on other exchanges.  Ether's network is less crowded so transactions are generally faster and the transaction fees are lower so that's what I would do, though the choice is yours, of course. 

Timing your first purchase

So, how do you know the best time to buy?  I'll make this easy: you don't.  You won't.  Don't try to time the market, especially if you're new.  I've known people (me? no, not me. of course not. *cough cough*) who will watch the second-by-second ups and downs, trying to hit the perfect low point.  First of all, unless you're buying a LOT of this stuff, it's likely to only save you a few dollars, at best. Second, don't be concerned with pennies or even a few dollars especially if this is for the long haul.  If you're comfortable buying 1 Ether at $1026 it shouldn't bother you if you actually get it at $1029.  That's less than 3/1000 of the total cost - it's like spending an extra 1.5 cents on a cup of coffee.  

Enjoying your first purchase

Watch your mailbox for the notice from Coinbase that your coins are available in your account (also called your wallet).  Bask in the glory of having joined the digital currency economy.  I've been saying for a while that cryptocurrency is now where email was in around 1992: Those who use it love it, everyone else rolls their eyes and 10 years later it changes the world.  You're now a part of that.

What next?

In my next post I'll tell you how to use that newly-bought BTC or ETH to buy other cryptocurrencies.  Stay tuned!


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