This post is designed to the novice that wants to get involved with cryptocurrencies.
*disclaimer- This is by no means financial advice, you are responsible to do your own research to determine if investing in ANYTHING is right for you.
Now that I have that out of the way I want to go over a few basics. First off Bitcoin can be purchased through a variety of means. the most widely used way (and quite frankly the easiest in my opinion) is buying through a trusted Bitcoin exchange. There are many different exchanges out there, which I will review in a separate post, but one of the most commonly used for people purchasing inside of the USA is Coinbase.com. Coinbase is a US based company that has widely become a well known name within the world of crypto. They don't offer a ton of options if you want to purchase other Alt-coins but they are a good starting point for someone to buy bitcoin.
Before you go running off to Coinbase, you will need to know some basic terminology.
Wallet:
This is where your coins/transactions will be stored. Basically think about a wallet like a bank account specifically for your Bitcoin. there are a lot of different types of wallets. Some of these include exchange wallets, cloud based wallets, native desk top wallets, cold storage wallets ( basically storing on a flash drive) , and paper wallets. Depending on how "liquid" you need the coins and how much coin you actually have will determine which wallet you will use, since there are different levels of security associated with each. I personally utilize multiple exchanges, and keep different coins in each exchange wallet, so I am able to readily buy/sell when needed without waiting, or paying transaction fees for sending from one wallet to another. I also use a native desktop wallet to store my other coins. This wallet is a multi-coin wallet with a built in exchange. I will do a review on this wallet in a coming post.
Block chain:
This is the 3rd party decentralized ledger that records all of the transactions between wallet addresses. You can always view the block chain and any transactions that are happening on it in real time.
Mining:
This is how many (not all) Cryptocurrencies are verified through the block chain. Basically individuals who are interested in being rewarded with bitcoin will "mine" it by using computing or hash power to solve complex algorithms. This allows the transactions on the block to be verified.
Exchange:
Usually a 3rd party company that allows buyers and sellers to come together to purchase different types of cryptocurrencies.
Got it? Good. Ok, so now your ready to make your first transaction right? Wrong. First you need to decide a few things. What method will you use to buy bitcoin? will you use a credit card, or will you transfer money from your bank account? I personally recommend initially using a credit card to buy on an exchange to get the motions down and understand how everything works (its just easier to set up and get going this way). Be aware though, a lot of credit cards are now treating the purchase of cryptocurrencies like a "cash advance". Banks are in the business to make money and they want their piece of the pie, so they are changing the coding for cryptocurrency purchases so they can charge higher fees and interest rates. After you get the hang of the process, I generally tell people to switch to using a bank account. ( I do use an account to transfer, but NOT my primary) You will also have to decide how much you want to buy. Personally, I started with $100 for my first transaction then moved up from there once I understood the mechanics.
After you have all that decided, you will need to pick an exchange and become "verified". Generally this means that you will have to provide your details, along with a picture of yourself and upload your identification information. Most times there are different levels of verification depending on the exchange, and that will determine how much you can purchase, sell, or transfer per day/week.
Congratulations! You have just been verified and accepted to purchase your first Bitcoin! But wait, Bitcoins are sitting at a few thousand dollars ( right around $8,200 as I write this), you may be thinking I cant afford that, that's too rich for my blood, or, you may be thinking, I'm gonna buy 50! if you are thinking the latter.. good for you, we all envy you..., but if you are in the first category, you should know that you can buy portions of a bitcoin, referred to as "satoshis" (one hundred millionth of a single Bitcoin. Once you decide on an amount, just login to your exchange account and select buy bitcoin for whatever that amount is. Generally the order is fulfilled immediately, as bitcoin maintains high volume which makes it very tradable and liquid.
Thank you for reading and I hope this provides a bit of clarity on what to expect when you are starting your "Cryptocurrency Journey"!
