A Beginners Guide to Cryptocurrency
Almost everyone has heard of Bitcoin by now. A digital Cryptocurrency that was started in 2009 by a person or group of people called Satoshi Nakamoto. In 2011 the value of Bitcoin was just .30 USD. As of the 10th of Jan 2017 the value per Bitcoin is 18,710.63 CAD! The whole world wishes they knew that Bitcoin was going to be the next big thing. Can it still grow? Is the bubble over? Or maybe the bubble has just begun!
A Cryptocurrency is defined by Wikipedia as,
“A cryptocurrency (or crypto currency) is a digital asset designed to work as a medium of exchange that uses cryptography to secure its transactions, to control the creation of additional units, and to verify the transfer of assets. Cryptocurrencies are classified as a subset of digital currencies and are also classified as a subset of alternative currencies and virtual currencies. Bitcoin, created in 2009, was the first decentralized cryptocurrency. Since then, numerous other cryptocurrencies have been created. These are frequently called Altcoins, as a blend of alternative coin. Bitcoin and its derivatives use decentralized control as opposed to centralized electronic money and central banking systems. The decentralized control is related to the use of bit coin’s blockchain transaction database in the role of a distributed ledger.”
Throughout this article you will learn the basics of the following,
- Purchasing Cryptocurrency
- Setting up a Coinbase account
- Setting up a Binance account
- Adding Funds to your Coinbase account
- Transferring Funds to your Binance Account
- Converting Cryptocurrency into Bit Coin
Investing in Altcoins
There are many sites that you can use to purchase Cryptocurrency, however two of the better ones are,
Coinbase allows you to purchase Cryptocurrency with a Credit Card or Wire Transfer. The maximum deposit you can make with a CC is normally capped to around 50 USD per week with Coinbase. Your Coinbase account will need to be verified however you can verify the account in less than one hour. With Coinbase You can only purchase, send and transfer your Cryptocurrency to another digital wallet. Coinbase will not allow you to withdraw your Cryptocurrency into your bank account with their platform; and
QuadrigaCx allows you to purchase larger amounts of Cryptocurrency and is similar to Coinbase however has one main difference. QuadrigaCx allows you to convert your digital funds into real dollars and cents and allows you to transfer them back into your bank account!
Setting up a Coinbase account
The first thing you will need to do is set up a Coinbase account, you can do that by clicking here. You will require access to a primary & secondary email to verify your account as well a means of secondary authentication to verify your device each time you log in. This may seem tedious however these steps are in place to secure your account and to protect your identity.
After you have signed up you will need to enter a method of payment. This payment is not to Coinbase it is used to purchase Cryptocurrency. You may choose to deposit funds with various options such as Wire Transfer for the USA or Bank account & Credit card transfers for Canadians.
A Coinbase account will allow you to purchase the following forms of Cryptocurrency:
To link one of your financial accounts to your Coinbase profile as mentioned above you will need to enter your CC information. Coinbase will make two micro transactions within the account you specify. You will have to enter the number of cents after the dollar amount on both micro transactions to verify your account.
After this is done you will be ready to make your first deposit into your account. Personally I recommend Litecoin to start with as it will be faster to transfer this type of currency into your Binance Account.
Setting up a QuadrigaCX Account
Setting up a QuadrigaCX account is a bit more complicated than a Coinbase account. It can take up to two weeks to verify your account fully. After you are fully verified you can Buy, Sell & Send various forms of Cryptocurrency.
QuadrigaCX will allow you to fund your account with the following,
Setting up a Binance account
A Binance account will allow you to trade various forms of Cryptocurrency and exchange Bitcoin for various other forms of Cryptocurrency or Altcoins. You will also be able to send & receive various forms of Cryptocurrency from your Binance account. To set up a Binance account click here.
You will need to verify your email address and add a secondary email address as a form of authentication for your account.
Transferring Funds into your Binance account.
After your account is set up you will need to deposit funds into it from Coinbase or another Cryptocurrency wallet. A Wallet is simply a secure and encrypted means of holding and securing your digital currency. To do this go to the funds Section and select the type of currency you want to send to your account.. Copy the link to your clipboard as you will need the link for a later time. CAUTION make sure the type of currency you select is the type of currency you have purchased and wish to deposit into your account. If you have purchased Litecoin, select that you wish to deposit Litecoin.
On the Coinbase platform select transfer funds and input the code you were previously given from Binance. After this is done you may proceed to transfer your funds. At this point you will see that the transfer will be pending. After a small wait period of 10 to 20 min is complete you will have access to the funds in your Binance Account.
Converting Cryptocurrency into Bitcoin
At this time you should have successfully transferred your Litecoin currency into your Binance Account.
Now you can Trade Litecoin for Bitcoin. The reason for this is because the Binance platform will only allow you to purchase various forms of Cryptocurrency with Bitcoin. Don’t worry you don’t need to purchase an entire Bitcoin! Binance will allow you to trade your Litecoin for a fraction of a Bitcoin. You can use this fraction of Bitcoin to purchase whatever Cryptocurrency (Altcoin) you deem worthy to invest in. Now all you will need to do is go to the Markets tab and select the currency you would like to invest in, select the percentage of your funds you would like to invest and click buy!
Investing in Altcoins
An Altcoin is any form of Cryptocurrency that is NOT a Bitcoin, essentially making it an alternative to Bitcoin. TRX, LTC, ETH & XRP are all good examples of Altcoins. The principle reason to invest in an Altcoin is because of its low cost per coin. Investing in Cryptocurrency is high Risk but you have to ask, is the risk worth the reward? Can you find and invest in the next Bitcoin before it becomes mainstream.
For example, If you purchase 2000 CAD of TRX at .03 cents per unit and within the next year TRX increases to 1.0 per unit. Your initial investment of 2000 CAD has the potential to increase to 66,666.66 CAD! Is the 2000 CAD risk worth the potential reward? Make sure that you extensively research any potential currency you would like to invest in!