Bitcoin and cryptocurrencies for beginners — first steps
In this post, I will outline how cryptocurrencies work and I will show how to buy bitcoins and other cryptocurrencies. This will be a high-density knowledge (the post turned out to be quite long) that will allow you to understand the operation of cryptocurrencies and enable you to make your first secure purchase of these blockchain-based currencies. You will also learn how to store currencies safely and how to sell them over time.
What will you learn in this post
- What is Bitcoin and how do cryptocurrencies work?
- Key cryptocurrency concepts and tools.
- What are some examples of bitcoin investment strategies?
- What is the purpose of buying cryptocurrencies?
- The process of buying Bitcoin step by step.
- Buying cryptocurrencies — which exchange should I choose?
- What do I do with cryptocurrencies after the purchase?
- Recommended wallet types for cryptocurrency storage.
- How to sell cryptocurrencies stored in a wallet?
- How to tax and settle revenues from cryptocurrencies?
All the links in this article:
- KuCoin — one of largest cryptocurrency exchanges. A good choice for anyone who starts a cryptocurrency journey.
- Binance — the largest crypto exchange in the world.
- Coinbase — one of the world’s largest services where you can easily buy cryptocurrencies.
- Coinomi— a mobile wallet.
- Bitaddress— creating paper wallets.
- Free Bitcoin and cryptocurrency course — here you will find free Bitcoin lessons to guide you how to make a purchase.
- Blockchain.com — here you can check your Blockchain system wallet status.
- Trezor — recommended hardware wallet.
The theme of cryptocurrencies has been around for a long time, but I have to say that I have been slow enough to enter this world. While still working in the restaurant, I had friends who literally worshipped BTC (and other cryptos) and could have talk all day about them. This topic was very appealing. My friends were constantly talking about investing, having no real capital at the same time. Then, I focused on creating my own business (Amazon and blog), and a few years later, the subject of investment became a necessity for me, because I simply saved a large amount of money. With solid financial backup, I decided to start investing some of my savings in cryptocurrencies.
IMPORTANT: Before delving into details, I would like to point out that I am not an investment adviser. All the pieces of advice presented here are my thoughts, and each one of you should always make your own financial decisions at your sole discretion. Furthermore, investment in cryptocurrencies should be considered high-risk and should only be made with money that you are theoretically prepared to lose. I have invested a lot of money in cryptocurrencies, but it is only a small part of my cash reserve. The rate of cryptocurrencies is, of course, based on the demand and supply of the particular cryptocurrency, but the price of Bitcoin, for example, can also be influenced by the policies of various governments (e.g., economic lockdown or inflation), investments and activities of large companies, and even large-scale sales of cryptocurrencies by entities with a large amount of them. In addition, the mechanisms for the development of a cryptocurrency also influence the price. Keep this in mind.
Also, if you want to see a more detailed cryptocurrency purchasing guide, I invite you to take part in my free Bitcoin course. I recorded as many as 8 video lessons as a guide, showing step-by-step how to buy and store cryptos using a variety of websites. I decided to create such a free cryptocurrency purchase course because the subject was too large to be included in one post.
- What is Bitcoin and how do cryptocurrencies work?
Bitcoin is a digital currency based on a blockchain (a distributed register of network operations that all users have access to) and an electronic payment system. It is also referred to as digital gold, and I think this expression very clearly explain what Bitcoin is. It is digital gold. It is a payment scheme without intermediaries (without banks or governments). Bitcoin was created in 2009 by an anonymous developer (or developers) who hides under the nickname Satoshi Nakamoto. To put it simply, Bitcoin makes it possible to make payments to anyone in the world over the Internet in a decentralized manner. You don’t have to understand all the details of blockchain operation to use Bitcoin, but some basics are worth exploring. In the same way, I believe that you don’t need to know the engine design to drive a car well and safely, but you should know the traffic rules — so in this post, I will try to give you the necessary knowledge without going into details, but this will still be a considerable insight.
Bitcoin and other cryptocurrencies are based on the decentralization of the payment system, i.e. there is no bank that would control users. For example, Bitcoin works like the Torrent network (in its core), which was very popular at times when we didn’t have Netflix and other streaming services. Torrents relied on their users who downloaded and shared files (usually illegally distributed or pirated films, games and, of course, a lot of pornography) — there were no servers or fees. For Bitcoin, the transaction is concluded between two users and the entire process is operated by so-called miners (their computers) who process their Bitcoin transactions and receive a predetermined commission in Bitcoins. The system is designed so that the transaction you are executing is distributed among users (miners) to confirm the transaction. All transfers must be confirmed simultaneously according to appropriate rules that prevent cheating. This process creates an appropriate chain system (blockchain), which in the case of decentralization is inviolable and it constitutes the base of the entire ecosystem. Blockchain is a virtual ledger book that contains all transactions and is responsible for their credibility.
2. Key concepts and tools:
Public Key — this is your account number where you hold your funds. You can give this key to a third party to transfer funds there. You can have many such keys (wallets) and they can have different forms (stock exchange wallet, mobile wallet, paper wallet or hardware wallet). You can create a key by installing a wallet in the appropriate application or by creating an account using dedicated online websites, which are also called cryptocurrency exchanges. You can transfer funds between your accounts (public keys) using wallets.
Private Key — this is your “PIN code”. When you generate a public key, you also receive a private key. Without a private key, you will not be able to withdraw funds from your account (public key).
Wallet — wallets are used to store your private and public keys. An online cryptocurrency exchange account, an application on your phone, or a paper card with saved keys can be such a wallet. A wallet is simply designed to protect access to these keys. Even a compressed file with keys in a password-protected notebook can be your wallet.
Cryptocurrency exchange — is it a website (e.g. Binance, Kucoin) that enables you to find other buyers and sellers of cryptocurrencies. There, with the currency you choose (EUR, USD, JPY, etc.) you can buy your first cryptocurrencies. These sites also provide online cryptocurrency wallets, but once you have bought a cryptocurrency on an exchange, you can transfer your funds to another public key (wallet) of your choice, even to the one printed on a piece of paper (known as a Paper Wallet).
3. The investment strategy and the purpose of the cryptocurrency purchase
In addition to the possibility of anonymous payments, cryptocurrencies also (or especially) offer the way to easily invest our money. Bitcoin’s exchange rate over the years has shown us that its value can rise or fall very quickly. We had very different periods in which Bitcoin’s price significantly increased or decreased. This undeniably stimulates imagination of many people and encourages to purchase Bitcoins and other cryptocurrencies. I do not intend to comment on the excellent investment opportunities in this case. Cryptocurrencies provide an interesting option, and I think it is worth to take an interest in the topic, because in the future, the importance of the blockchain technology will be ever increasing. We could make a bold statement that cryptocurrencies will play an important role in the coming decades.
There are two main investment tactics. The first one involves simply trading with cryptocurrencies, buying at a low price and selling at a high price. But easier said than done, as there is no single person who could with absolute certainty anticipate future prices of Bitcoin and other cryptocurrencies. This is more of an option for the advanced or the naive ones — unless you are treating it as entertainment and do not invest large amounts of money. My assumption is that it is worth to hold cryptocurrencies long-term and this is the option number two. In this case, we occasionally buy a selected amount of cryptocurrencies (even for a few hundred dollars), while trying to avoid peak price periods. With this strategy, we should have a good chance of winning after years. It is a similar tactic to investing in gold, i.e. we buy regularly, protect the value of our money and, in the process, have a good chance of increasing the value of our savings.
I also plan to write an extensive post about my investment strategy for cryptocurrencies, where I will include some tips how everyone of you can easily define your own strategy that would be simple and safe at the same time.
- Bitcoin — the process of buying Bitcoin step by step
The easiest way to explain the whole process will be to use the example of a transaction to purchase Bitcoin on an exchange of our choice and transfer it to an external wallet that ensures security. For this, I will use KuCoin, Coinbase and Binance. These websites work in a similar way. Personally, I use Binance and KuCoin in particular, but for the most people who would like to make their first transaction Coinbase will a good choice as well. In fact, each of these services will be a good choice and I do not want to force you to use any specific one in any way. I am also introducing the whole process step by step on video in my free course, which includes as many as 8 lessons on this topic.
First of all, you must register and verify your account with each of these services. Cryptocurrency exchanges are legally obliged to verify your identity and it is normal for them to require your personal information along with a scan of your personal ID. Often, you will also need to verify your own bank account by making a small transfer — this account will be needed over time if you want to convert Bitcoins into a FIAT currency (government money, like USD, EUR etc.) or deposit money on the exchange. It is a large and mature exchange. Here, we use dollars or euros.
This service will be a good choice for many of you, with its simple and user-friendly interface and support of many FIATS. It is very easy to use. To buy a cryptocurrency, you can use other users’ offers (P2P) or the “Fast Trade” option, which allows you to purchase/sell assets very easily without going into individual bids. Before you can buy, you must transfer money from your account to the website, of course, you must complete the verification process as you do on other websites.
Advantages: offers a huge selection of cryptocurrencies and features low fees compared to other exchanges.
Disadvantages: KuCoin is not licensed in the United States (unlike Coinbase) and has less cryptocurrency choice.
Binance is the largest global cryptocurrency exchange with its interface available in many languages, which is probably a big advantage for many people. Binance is highly sophisticated and also has the ability to purchase many less popular coins. In this respect, Binance outperforms, for example, KuCoin, but on the other hand, it is a somewhat more complex site in terms of the user experience. That’s why I recommend it to more advanced people who want to buy less common cryptocurrencies (altcoins) as well. If you are only interested in buying the most popular cryptocurrencies (like Bitcoin, Ethereum, etc.) and prefer an easier purchasing process, I would encourage you to use Coinbase.
Advantages: large-scale global service, international interface, multiple options and a variety of cryptocurrency features available.
Disadvantages: the abundance of options can be overwhelming in the beginning.
With Coinbase, you can connect your own bank account (Revolut also works), but you can also attach your card for easy purchase. Coinbase is a very simple portal for buying cryptocurrencies, because it has a very clear interface and no need to browse sales offers. Simply specify the number of cryptocurrencies that you want to get.
Advantages: Coinbase offers a secure way to invest and trade with cryptocurrencies and the purchase process is very simple.
Defects: the service is fairly simple and has little function and capability.
- Buying cryptocurrencies — which exchange should I choose?
As you can see, a lot may depend on which currency you want to use to purchase a cryptocurrency and whether you want to deposit funds on the crypto exchange. If I were you, I would use Coinbase to start-up or the world largest crypto trading service Binance. I also recommend to sign up with at least two services so that to have some freedom of manoeuvre for selling a cryptocurrency at a good exchange rate, as the services also have their daily payout limits, and the rate you are interested in will stay the same forever. In addition, it is worth to get to know two different websites (at least to satisfy your curiosity). For example, you can purchase Bitcoins with one currency Coinbase, and sell them at Binance and get paid in another. The possibilities are endless. If you would like to see a step-by-step process of how to buy Bitcoin, I encourage you to take part in a video lesson as part of the free course.
How many cryptocurrencies should I buy?
This may be your first question here. I have two tips for you. Firstly, the purchase of cryptocurrencies should only be a small investment in your total accumulated funds. This means that if you have e.g. $5,000 of free funds available, invest no more than $500. Under no circumstances should you spend a lot of your savings on this, as cryptocurrencies are still a high-risk investment — especially if you are just starting to enter the market. Invest as much as you can afford to lose. Secondly, start with small amounts and treat it as a lesson. Sign up for two exchanges and buy cryptocurrencies for £100 for a trial. Then transfer the purchased currencies to your external wallet (more about wallets later in this post). Think about investing a little larger amounts only after you have understood and gone through the whole process of buying on small amounts. I have invested quite a lot, but it is still a small percentage of my savings.
- What do I do with cryptos after the purchase?
After registering with a particular service and making your first purchase, the cryptocurrencies you purchased will appear on your account at the given website. Each service is your online wallet at the same time. If you have an account on such a website, you are given a public key for you to receive purchased cryptocurrencies. However, keeping large sums of money/cryptocurrencies online is not the best idea in the long term, as these services are vulnerable to hacker attacks. Don’t get overly paranoid about this, but simply consider transferring some purchased cryptocurrencies to an external wallet — it is a good practice.
- Recommended wallet types for cryptocurrency storage
Your public key and your private key are numbers that need to be stored somehow. There are many services our there (including crypto exchanges) that will be happy to do it for you, but I recommend that you transfer your funds to an external wallet, which is much more secure when you keep cryptos in the long term.
Mobile wallet/app — this is software that you install on your phone or computer. It is secured with a password and a special phrase (so called recovery phrase). After you purchase Bitcoins or other cryptocurrencies on the exchange, we can then transfer them to our in-app wallet. Simply enter your public key generated by your wallet and send money from the exchange. I use the Coinomi wallet, which is available as an app on my phone and a desktop app for Windows (I use both because they sync with each other). This is a relatively safe way to store cryptocurrencies and this should be enough to start with.
Paper wallet — this is the safest form of cryptocurrency storage, yet not quite handy. To create a paper wallet, just go to Bitaddress.org and generate a public key and a private key for yourself. Then, you can print such a key or simply rewrite it on a sheet of paper. We can transfer funds from exchanges/services or mobile wallets to such a public key. The whole idea of a paper wallet is that our keys (especially the private one) stored on a sheet of paper and stored in the place we choose are impossible to compromise by hackers or with malware, because they are stashed, for example, in a briefcase in a dresser.
The disadvantage in this case is the inconvenience of use (keys should be printed and stored), and if you want to sell your funds you need to reach for the file with papers.
How to create a paper wallet with Bitaddress.org
To check the amount of the funds collected in the account (in the created public key), simply go to blockchain.com and enter the number of your public key. Then, we can then see all the funds and transactions saved in the account. These funds can only be withdrawn if we know the private key generated at the beginning together with the public key. Write down and store securely your paper wallet private key. If you lose it, the whole amount of cryptocurrencies accumulated on the selected wallet won’t be retrievable.
Hardware wallet — this is an option rather for a little bit more advanced people, because it requires to purchase a device (a hardware wallet is something like a secured USB stick) and its costs starts from a dozen of dollars. The advantage of such a wallet is the convenience and the fact you can store your cryptocurrencies away from the web. One of the most popular manufacturer of hardware wallets is Trezor and its products can be purchased on their official website.
For rookies, I recommend using the free Coinomi app to get some experience and store first purchased cryptocurrencies away from the exchanges. Once you have learned the process and you want to invest more for a long term, then it is worth transferring your funds to the hardware wallet. I also encourage you to try out the free course where I show everything in the video lesson.
- How to sell cryptocurrencies stored in a wallet?
To trade cryptocurrencies or just cash out your investment after some time (by converting cryptos to a government currency — like USD, EUR, etc.), you should sell cryptocurrency on the exchange. This process is similar to buying cryptocurrency, but reversed. First of all, you need to have funds available in the form of cryptocurrencies on the exchange to cash out. Therefore, if you keep them in an external wallet, first transfer them to a website such as Binance, Coinbase, KuCoin, etc. If you have cryptocurrencies in your mobile wallet, it is enough to send the selected amount e.g. Bitcoin to the address of the wallet in our account on a given website. Remember your exchange account is also a wallet. You will find your wallet address both in Coinomi and in the settings of your account on the exchange. However, if you have cryptocurrencies in a paper wallet (manually saved/printed public and private keys), you must first import the cryptocurrency into a mobile wallet (e.g.. Coinomi) by providing your public and private key. After entering the private key in your mobile wallet, your cryptocurrency will be downloaded from the “paper card”. Then, you’re free to send cryptocurrencies to the exchange from your mobile wallet. It is not possible to send cryptocurrencies directly from the paper wallet to the exchanges described in this post.
To sell any amount of cryptocurrencies, choose the appropriate option on the site or publish a bid including your sale price. After the sale, the money will be in our online wallet on the website. It is worthwhile to make a full transaction as part of learning. To do this, you should register on a chosen website, authorize your account, buy a small amount of cryptocurrency, transfer it to an external wallet, transfer it from the wallet to an exchange (it may be a different exchange than the one where you made the purchase), and then sell it back on the market for this small amount of cryptocurrency. This is the best way to learn the whole process and even a pre-requisite for buying larger amounts of Bitcoin or other cryptocurrencies.
- How to tax and settle revenues from cryptocurrencies?
The last issue is to pay tax for the amount earned by the sale of cryptocurrencies. The process may look differently depending on the country. In Poland for example, you have to send a tax declaration once a year (for 2022 it will be until the end of April 2023) and you have to pay 19% income tax.
Example (applicable to Poland): If you buy cryptocurrencies for $2,000 in may 2020 and sell them for $3,000 in November, your income will be $1,000 and you have to pay 19% tax ($190). The numbers are to be entered in the form PIT 38, field C. For more complicated matters, I always recommend you to meet your accountant who will calculate your annual tax declaration for you. In a free course, you will find a video conversation with my accountant Marcin, who explains in detail how to pay tax for cryptocurrency revenues.
All the links in this article:
- Kucoin — one of 3 largest cryptocurrency exchanges. The best choice for anyone who starts a cryptocurrency journey.
- Binance — the largest crypto exchange in the world.
- Coinbase — one of the world’s largest services where you can easily buy cryptocurrencies.
- Coinomi— a mobile wallet.
- Bitaddress— creating paper wallets.
- Free Bitcoin and cryptocurrency course — here you will find a free Bitcoin lessons to guide you how to make a purchase.
- Blockchain.com — here you can check your Blockchain system wallet status.
- Trezor — recommended hardware wallet.
Bitcoin and cryptocurrencies for beginners: first steps
— listen to the podcast
Bitcoin and cryptocurrencies for beginners: first steps
— see the video
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Hi! Tom here.
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From Waiter to Millionaire.
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Warm greetings. In today’s video, I will
tell you about cryptocurrencies and Bitcoin.
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You’ll learn how exactly Bitcoin works,
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00:00:12,262 –> 00:00:15,298
the blockchain mechanism,
and other cryptocurrencies.
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I’ll show step by step how to buy
your first cryptocurrencies,
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where to do it, how to do it safely,
how to store cryptocurrencies safely,
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how to transfer them to various wallets,
how these wallets work,
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and finally how to sell these
cryptocurrencies.
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This will be a video for beginners who
are not familiar with this topic,
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and who want to start their adventure
with cryptocurrencies, Bitcoin and maybe
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want to invest their first money.
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A few organizational issues.
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I am not an investment advisor.
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Remember all financial decisions,
related to cryptocurrencies, or other,
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or your own business investments
are made at your own risk.
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Also, the law does not
allow me to advise you.
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So, only get into
what you understand.
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I hope this video will
help you understand the topic,
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00:01:11,455 –> 00:01:13,990
and it’ll be
a cool intro for beginners.
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Those who want to go deeper,
I cordially invite to
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my latest cryptocurrency course,
which is completely free.
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There are no hidden costs.
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The link to the course is below,
and you can order it for free,
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use it and
it is there for you.
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It is a kind of video tutorial
that shows exactly how to buy,
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store, send, and sell cryptocurrencies
using several services as examples.
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Feel free to participate in this
cryptocurrency course after watching this video.
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Let’s get started.
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Cryptocurrencies.
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I’ll start with some
facts about them.
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This is an interesting topic.
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I will often mention Bitcoin,
as it is the most popular cryptocurrency.
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A very interesting one,
and the first one
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which has taken over the world.
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It was created some 10 years ago
by a person, or a group called Satoshi Nakamoto,
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and today, we still don’t know who it was,
although there are some suspicions.
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I’ll give you a comparison to start with,
so that you can more easily understand how
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cryptocurrencies and
the blockchain system work.
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The blockchain and cryptocurrency
system is open-source software
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which is freely
available on the web.
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Everyone can access it.
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There is no supervision of a bank
or other institutions over this cryptocurrency.
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And the entire cryptocurrency, connections,
systems, the so-called blockchains
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are publicly available.
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It is a system constructed in such a way
that it cannot be cheated,
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it cannot be controlled in a sense,
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and it cannot be
simply liquidated either.
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And that is the advantage of
cryptocurrencies,
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that they are decentralized
and thus are alive thanks to the users.
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If any of you remember torrents,
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which were especially popular in the past
when there were no streaming networks
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like Netflix, etc.,
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it was from torrents that
pirated games, movies were downloaded.
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Everyone probably still
remembers the old days.
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A lot of pornography
was also available there.
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But what is important is that torrents
were and still are based on P2P networks,
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i.e., users who receive and send files.
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This network could not
be shut down because
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it consisted of millions of users
transferring files among themselves.
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The same way the Internet
can’t be turned off,
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nor can the users in
the torrent network be turned off,
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or the network be dismantled,
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as it is based on the users,
and the network is free to use.
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The only cost is the users’ hardware.
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This is the big picture.
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The Bitcoin network
and other cryptocurrencies
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are also based
on the users.
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Now, I’m going to use my new board,
which has just arrived, to show you
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how a cryptocurrency like Bitcoin works.
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Let’s say, there’s me, Tom, and I want to
send to someone, to Anna, one bitcoin.
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I don’t know if it is
clearly visible, but it should be.
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I’m sending one bitcoin.
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Each of us has its own public key,
I’ll explain it later.
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A public key is an account number
assigned in the Bitcoin system.
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You can have many of them.
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So, having one bitcoin in my account, I only need to know Anna’s public key,
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which can be publicly available,
if she decides to share it and still it is safe.
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And now by sending one bitcoin to this
public key, I’m sending a signal to the bitcoin network
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that I want to perform such an operation.
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In the network, there are miners,
whose computers validate the transaction.
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They are simply users
of the bitcoin network.
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They validate it, and only after reaching a sufficient number of confirmations,
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from users to prove
the transaction is valid,
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I have sufficient funds in my account,
only then is this bitcoin transferred to Anna.
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Then one bitcoin disappears
from my account.
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The miners receive a small payment,
a fraction of this transaction,
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And Anna receives
the payment in bitcoin.
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Thanks to the user-based system
and no external institution here,
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there is no bank,
it’s impossible to cheat.
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Because the number of miners who confirm
the transaction is greater than 1.
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The system is designed in such a way that
you can’t cheat it.
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And you can’t really reach every user.
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They cannot be ruled out.
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It is a decentralized system, they
compete with each other,
96
00:06:07,684 –> 00:06:09,652
and you can’t just turn it off.
97
00:06:09,753 –> 00:06:14,023
And it is a fully anonymous
and non-supervised transaction.
98
00:06:17,290 –> 00:06:19,420
This is how bitcoin works.
99
00:06:19,420 –> 00:06:23,099
This is a digital currency designed
for such purposes,
100
00:06:23,099 –> 00:06:26,569
which operates outside
of any government currencies,
101
00:06:26,569 –> 00:06:28,538
the so-called Fiat currencies,
102
00:06:28,605 –> 00:06:34,244
and this currency has slightly different characteristics
than a monetary currency,
103
00:06:34,310 –> 00:06:36,312
since its quantity is limited.
104
00:06:36,379 –> 00:06:39,682
There will be no more than 21
million bitcoins on the market.
105
00:06:39,783 –> 00:06:41,484
Now, we have about 18.
106
00:06:41,551 –> 00:06:44,854
The system is set up so that
the currency is duplicated,
107
00:06:44,921 –> 00:06:46,623
up to a certain point,
108
00:06:46,689 –> 00:06:51,027
and also the maximum
amount is 21 million.
109
00:06:51,160 –> 00:06:55,698
It is impossible for any government
to add $100 million suddenly
110
00:06:55,765 –> 00:06:58,334
due to some kind of virus.
111
00:06:58,401 –> 00:07:05,080
This currency can’t be destroyed
so easily by inflation or other such things.
112
00:07:05,080 –> 00:07:07,977
Of course, the bitcoin exchange rate in general.
113
00:07:08,044 –> 00:07:11,881
Let’s write down the bitcoin exchange
rate at this moment.
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00:07:11,981 –> 00:07:16,352
It was a little over 7000 euros when
I bought bitcoins recently.
115
00:07:22,792 –> 00:07:26,729
Bitcoin started with a value
of literally nearly zero.
116
00:07:26,796 –> 00:07:32,068
10 years ago, bitcoin cost virtually
nothing, then it grew to several hundred dollars.
117
00:07:32,135 –> 00:07:34,204
Back then it already seemed a lot.
118
00:07:34,404 –> 00:07:40,180
While in 2018, bitcoin reached about $18,000
and there was a big frenzy about it.
119
00:07:40,180 –> 00:07:44,360
The bitcoin rate depends
on the demand and supply.
120
00:07:44,360 –> 00:07:48,952
The supply is somehow fixed,
because there is a limited amount of bitcoins.
121
00:07:49,052 –> 00:07:55,525
But the demand can vary a lot,
because it depends on events, like economic crisis.
122
00:07:56,259 –> 00:08:01,231
A crisis may increase demand for bitcoin,
other cryptocurrencies, or gold, etc.
123
00:08:01,331 –> 00:08:05,902
It also depends on actions,
on people who may have a lot of bitcoins.
124
00:08:05,935 –> 00:08:11,808
The bitcoin founder may have a lot of bitcoins
and may want to enter the market at some point.
125
00:08:11,875 –> 00:08:14,644
Then the supply goes up,
the demand goes down.
126
00:08:14,777 –> 00:08:18,348
But in general bitcoin
is independent of governments.
127
00:08:18,381 –> 00:08:21,451
Though, it is very dependent
on the mood of the market.
128
00:08:21,518 –> 00:08:25,270
On whether the government bans
or doesn’t ban the cryptocurrency,
129
00:08:25,270 –> 00:08:28,070
What are the legal restrictions.
130
00:08:28,070 –> 00:08:33,670
And this results in the fact that
bitcoin’s rate simply changes.
131
00:08:33,670 –> 00:08:36,733
As of now, we have a stage
of relative stabilization.
132
00:08:36,799 –> 00:08:42,530
But it is still a currency that is capable
of skyrocketing or plummeting by tens of percent
133
00:08:42,530 –> 00:08:44,080
in just a few months.
134
00:08:44,080 –> 00:08:48,444
This means pros and cons,
because you can lose, but on the other hand,
135
00:08:48,511 –> 00:08:53,716
by investing, for example 50,000
in bitcoin in a few months, you can earn tens of thousands.
136
00:08:53,783 –> 00:08:55,950
And it is an incredible opportunity.
137
00:08:55,960 –> 00:09:01,257
And I’ll tell you, maybe even before
I get to buying cryptocurrencies,
138
00:09:01,324 –> 00:09:06,670
I’ll get to the investment strategy.
How to buy bitcoins or cryptocurrencies at all.
139
00:09:08,097 –> 00:09:09,832
Well, there are two options.
140
00:09:09,899 –> 00:09:11,467
The first one is trading.
141
00:09:11,467 –> 00:09:15,138
It is for the people who
either have extensive knowledge,
142
00:09:15,204 –> 00:09:19,442
who know what they are doing,
or for the people who are naive.
143
00:09:19,542 –> 00:09:23,246
It is nice to buy
one bitcoin for $5,000
144
00:09:23,313 –> 00:09:28,952
and sell it tomorrow for $5,300.
145
00:09:28,952 –> 00:09:31,287
We earn $300.
146
00:09:31,554 –> 00:09:34,190
But is the same way
we could lose $1,000.
147
00:09:34,257 –> 00:09:37,994
Trading requires constant attention,
following the news,
148
00:09:38,061 –> 00:09:42,098
and even then, you wouldn’t be
able to predict the future of bitcoin.
149
00:09:42,432 –> 00:09:45,969
But historically, its
exchange rate rises all the time.
150
00:09:46,436 –> 00:09:50,870
The second strategy is to buy bitcoin
at relatively reasonable prices.
151
00:09:50,870 –> 00:09:53,170
We try to avoid the peaks.
152
00:09:53,170 –> 00:09:57,046
We buy cheap from time to time, a little
more, a little less,
153
00:09:57,046 –> 00:10:00,820
but we regularly fill our wallet
at relatively low prices.
154
00:10:00,820 –> 00:10:06,923
That way our money multiplies,
and after a few years we can have a cool gain.
155
00:10:07,360 –> 00:10:09,859
And I am also a follower of this strategy.
156
00:10:09,926 –> 00:10:13,763
It doesn’t just come down to bitcoin,
but to many other things.
157
00:10:13,830 –> 00:10:17,000
We regularly buy bitcoin or other
cryptocurrencies.
158
00:10:17,066 –> 00:10:23,339
And importantly, bitcoin,
cryptocurrencies – it is a very high-risk investment.
159
00:10:23,439 –> 00:10:27,877
If you want to buy bitcoin,
and I’m about to show you how to do it.
160
00:10:27,977 –> 00:10:32,515
You have to use for that purpose only
money that you are prepared to lose.
161
00:10:32,582 –> 00:10:38,121
If you have $5,000 in your account,
then absolutely don’t buy a crypto for $5,000.
162
00:10:38,230 –> 00:10:41,557
If you have $100,000,
then don’t buy for $100,000.
163
00:10:41,658 –> 00:10:47,397
I think you should allocate 5 to 10%
of your savings for cryptocurrencies,
164
00:10:47,497 –> 00:10:51,768
so that if something happens, you won’t be put in a
corner to withdraw them
165
00:10:51,868 –> 00:10:54,637
at a lower rate and
lose on the investment,
166
00:10:54,704 –> 00:10:57,907
or simply you won’t
lose your livelihood.
167
00:10:57,940 –> 00:11:01,711
Not to mention people who
took out loans for cryptocurrencies.
168
00:11:01,778 –> 00:11:04,914
We just don’t want
to feel stressed about it,
169
00:11:04,914 –> 00:11:10,586
and if we want to be in the process
of cryptocurrencies forming in the world,
170
00:11:10,586 –> 00:11:12,822
I think it’s worth getting into it,
171
00:11:13,156 –> 00:11:16,325
but with the money we can lose,
we can freeze,
172
00:11:16,392 –> 00:11:22,500
because maybe in a few years we will be able
to make a pretty good profit on it.
173
00:11:22,540 –> 00:11:27,380
If you have $100,000 in your account, buy
bitcoins for a few thousand dollars,
174
00:11:27,380 –> 00:11:31,450
if you haven’t done it before, learn to
operate on small amounts.
175
00:11:31,450 –> 00:11:34,150
I also teach and encourage this.
176
00:11:34,150 –> 00:11:36,746
I invite you to
a free cryptocurrency course.
177
00:11:36,813 –> 00:11:37,947
The link is below.
178
00:11:38,014 –> 00:11:42,585
I show how to buy cryptocurrencies
for small amounts at the beginning,
179
00:11:42,652 –> 00:11:46,923
teach how to use the exchanges
and how the whole blockchain works.
180
00:11:46,989 –> 00:11:52,462
This way, once you learned the process,
you can buy cryptocurrencies for more.
181
00:11:52,528 –> 00:11:56,666
In the course, I also show how
I do it, how I buy cryptocurrencies.
182
00:11:56,733 –> 00:11:58,768
I show how I store them.
183
00:11:58,835 –> 00:12:01,037
I even show how
many I have of them.
184
00:12:01,104 –> 00:12:02,972
I really recommend this course.
185
00:12:03,005 –> 00:12:03,906
Let’s move on.
186
00:12:04,006 –> 00:12:08,578
I will tell you where such
currencies can be bought.
187
00:12:09,345 –> 00:12:13,950
Where we are able
to purchase such cryptocurrencies.
188
00:12:19,689 –> 00:12:21,457
Sorry it’s taking so long.
189
00:12:23,826 –> 00:12:27,263
There are many websites
for buying cryptocurrencies.
190
00:12:27,697 –> 00:12:29,632
There is some in every country.
191
00:12:29,732 –> 00:12:31,801
I will show you three that I use.
192
00:12:31,901 –> 00:12:34,403
There is one
main website I use.
193
00:12:34,537 –> 00:12:37,840
I’ll tell you
its advantages and disadvantages.
194
00:12:37,907 –> 00:12:41,477
Let me write them down for you.
195
00:12:41,577 –> 00:12:46,550
The first one is BitCoin DE.
196
00:12:46,550 –> 00:12:49,800
The second one will be Coinbase.
197
00:12:49,800 –> 00:12:53,240
And Zonda (formerly BitBay).
198
00:12:53,240 –> 00:12:57,160
The Polish one.
199
00:12:57,160 –> 00:13:00,400
All links are under the
video and in the course.
200
00:13:01,464 –> 00:13:03,699
I really recommend it.
201
00:13:03,833 –> 00:13:07,837
I mainly use bitcoin DE,
because it is a German exchange.
202
00:13:08,004 –> 00:13:10,439
Of course, it is available in English.
203
00:13:10,439 –> 00:13:12,975
I like it
because it operates in euro.
204
00:13:13,109 –> 00:13:16,946
I have a lot of savings in Euros
from my sales on Amazon,
205
00:13:17,079 –> 00:13:21,384
and that’s where I invested
some money and bought cryptocurrencies.
206
00:13:21,484 –> 00:13:25,920
Most of the other websites also
allow purchases in euros,
207
00:13:25,920 –> 00:13:28,090
but Bitcoin DE is a German site.
208
00:13:28,120 –> 00:13:31,394
It’s very cool because it’s been on
the market for a long time.
209
00:13:31,494 –> 00:13:37,600
It’s trust-worthy for me and
this is where I bought most of my bitcoins.
210
00:13:37,767 –> 00:13:39,635
The second website is Coinbase.
211
00:13:39,802 –> 00:13:45,174
It is one of the largest English-language
exchanges in the world,
212
00:13:45,241 –> 00:13:50,890
and Zonda, which is a Polish website,
and there you can trade in PLN and also EUR.
213
00:13:50,890 –> 00:13:52,220
And other currencies.
214
00:13:52,220 –> 00:13:57,153
There, you can buy all cryptocurrencies,
while on Bitcoin DE only a few basic ones.
215
00:13:57,420 –> 00:13:59,760
Bitcoin is available on every of them.
216
00:13:59,760 –> 00:14:02,300
Bitcoin DE is a very interesting option.
217
00:14:02,300 –> 00:14:03,459
I recommend.
218
00:14:03,459 –> 00:14:07,063
Coinbase is one of the
largest crypto exchanges in the world.
219
00:14:07,230 –> 00:14:09,131
Shopping there is even easier.
220
00:14:09,265 –> 00:14:13,870
Unlike on Bitcoin DE, where you have to
choose and buy specific offers,
221
00:14:13,970 –> 00:14:15,738
same on Zonda, which is easy,
222
00:14:15,838 –> 00:14:21,577
while on Coinbase, you just need to specify
the amount of cryptocurrency you want to buy.
223
00:14:21,711 –> 00:14:24,413
Registering on these websites
is very important,
224
00:14:24,547 –> 00:14:28,417
and I talk about it
in more detail in the free course.
225
00:14:28,551 –> 00:14:29,919
The links are below.
226
00:14:30,086 –> 00:14:37,159
I tell in this video course how to do it
exactly, but as for now I’ll give you a little hint.
227
00:14:37,226 –> 00:14:43,900
In Coinbase, we select the exact amount of the currency we want to buy,
228
00:14:44,000 –> 00:14:48,304
and the website converts it,
and automatically and gives this currency.
229
00:14:48,404 –> 00:14:51,707
In order to sign up,
you have to provide your data.
230
00:14:51,807 –> 00:14:55,278
The verification is quite stringent
on these websites.
231
00:14:55,878 –> 00:15:01,050
It may slightly arouse your distrust,
because you must provide scans of our IDs,
232
00:15:01,150 –> 00:15:08,110
and in the case of Bitcoin DE you have to
have a conversation in English or German
233
00:15:08,110 –> 00:15:14,090
through a special app with a consultant to
verify your identity.
234
00:15:14,090 –> 00:15:20,680
But every exchange works this way, because
they are legally required to have our data,
235
00:15:20,680 –> 00:15:22,680
including our home address.
236
00:15:22,680 –> 00:15:26,220
So don’t be surprised if you have to
provide this data.
237
00:15:26,220 –> 00:15:32,440
But once you register, you are verified,
then you can trade currencies.
238
00:15:32,440 –> 00:15:36,018
You can buy, sell and send them to
external wallets.
239
00:15:36,118 –> 00:15:39,790
If you want to see on video how I buy
these cryptocurrencies,
240
00:15:39,790 –> 00:15:43,520
sign up for my completely free
cryptocurrency course.
241
00:15:43,520 –> 00:15:47,900
Now, the other thing worth talking
about is wallets.
242
00:15:47,900 –> 00:15:51,540
Wallets and keys.
243
00:15:51,540 –> 00:15:57,673
Once you have purchased cryptocurrencies
on the exchange,
244
00:15:57,807 –> 00:16:02,945
when you set up an account,
each account is a public key.
245
00:16:03,212 –> 00:16:05,748
That’s how the blockchain is structured.
246
00:16:05,848 –> 00:16:07,149
Especially bitcoin.
247
00:16:07,249 –> 00:16:14,690
So based on the example of bitcoin,
there is a public key and a private key.
248
00:16:21,063 –> 00:16:27,036
The public key is your account number,
which is visible, for example on the website,
249
00:16:27,103 –> 00:16:29,505
for transfer from outside.
250
00:16:30,406 –> 00:16:31,273
It is visible.
251
00:16:31,374 –> 00:16:34,977
You can generate it
on special website, like bitaddress.
252
00:16:35,077 –> 00:16:36,445
All links below.
253
00:16:36,512 –> 00:16:39,982
This public key is your account number
you can share,
254
00:16:40,049 –> 00:16:42,551
and there
you can transfer your bitcoins.
255
00:16:42,660 –> 00:16:46,922
Of course, you can have a lot
of such public keys.
256
00:16:46,956 –> 00:16:50,026
There is also a private key,
a security measure.
257
00:16:50,026 –> 00:16:52,862
You use it simply to log in
to your account.
258
00:16:52,962 –> 00:16:56,860
You can also create it
manually for paper wallets.
259
00:16:56,860 –> 00:16:58,834
More details in a second.
260
00:16:58,901 –> 00:17:00,803
And this
key is only for you.
261
00:17:00,870 –> 00:17:05,107
In order to withdraw money from your
account you need to provide it.
262
00:17:05,174 –> 00:17:08,677
To withdraw cryptocurrencies
from such accounts,
263
00:17:08,744 –> 00:17:12,481
you don’t need to know this private key,
but your credentials.
264
00:17:12,548 –> 00:17:14,216
Then, we can withdraw funds.
265
00:17:14,283 –> 00:17:17,119
But if you want
to store your cryptocurrencies,
266
00:17:17,586 –> 00:17:20,122
let’s say, purchased
on Zonda or Binance,
267
00:17:20,122 –> 00:17:23,025
and at that moment
you have there one bitcoin,
268
00:17:23,092 –> 00:17:24,493
then, what’s next?
269
00:17:24,560 –> 00:17:29,131
Cryptocurrency exchanges
are not the safest place to store cryptocurrencies.
270
00:17:29,165 –> 00:17:32,068
Many of them have been
hacked in the past.
271
00:17:32,134 –> 00:17:35,304
Bitcoins or other cryptocurrencies
have been stolen.
272
00:17:35,371 –> 00:17:39,075
It is obvious you use the exchange,
but after the purchase,
273
00:17:39,141 –> 00:17:42,812
I recommend sending
your bitcoins to an external wallet.
274
00:17:42,810 –> 00:17:48,090
A wallet is our public key
secured with a private key.
275
00:17:48,090 –> 00:17:49,950
You have a few options.
276
00:17:49,950 –> 00:17:54,910
You can, of course, hold your currencies
in a wallet on a cryptocurrency exchange,
277
00:17:54,910 –> 00:17:56,350
and that is an option.
278
00:17:56,370 –> 00:17:58,394
I don’t advice it in the long run,
279
00:17:58,494 –> 00:18:01,030
especially if you want
to buy and hold.
280
00:18:01,097 –> 00:18:03,699
If you want to trade,
you need it there.
281
00:18:03,732 –> 00:18:05,434
This is the first option.
282
00:18:05,534 –> 00:18:09,438
In this case, it is a type
of an online wallet on the exchange.
283
00:18:09,505 –> 00:18:12,942
The second option is
a mobile wallet.
284
00:18:16,812 –> 00:18:20,249
A mobile wallet can be
in an app on your phone.
285
00:18:20,349 –> 00:18:24,360
I highly recommend Coinomi.
286
00:18:24,360 –> 00:18:28,324
It is an application
for a phone or computer.
287
00:18:28,440 –> 00:18:32,361
They are both in sync, and
there you can send cryptocurrencies.
288
00:18:32,428 –> 00:18:35,264
It is password-protected
and relatively secure.
289
00:18:35,364 –> 00:18:40,670
Another option is a paper wallet.
290
00:18:40,680 –> 00:18:44,690
Simply, a piece of paper.
291
00:18:44,690 –> 00:18:46,242
Here is how it works.
292
00:18:46,242 –> 00:18:49,245
Once you have
currencies on any exchange,
293
00:18:49,345 –> 00:18:53,816
you have bought one bitcoin,
then you visit a dedicated website, Bitaddress.
294
00:18:53,883 –> 00:18:57,419
For the links, see the description
or read the blog post.
295
00:18:57,453 –> 00:19:00,330
My free course also shows
exactly how to do it.
296
00:19:00,460 –> 00:19:05,540
Here, we simply create a public
and private key manually on the website.
297
00:19:05,540 –> 00:19:08,764
We write them down on
a piece of paper or print.
298
00:19:08,831 –> 00:19:15,980
And at this point, we transfer money in
the form of bitcoin to this public key.
299
00:19:15,980 –> 00:19:18,940
And our paper is in a drawer
in the dresser.
300
00:19:18,950 –> 00:19:20,850
Don’t tell anyone where.
301
00:19:20,850 –> 00:19:26,180
And at this point, to withdraw the money,
you have to provide this private key
302
00:19:26,180 –> 00:19:28,450
in an electronic wallet
like Coinomi.
303
00:19:28,517 –> 00:19:33,090
Without access to this private key,
you won’t be able to withdraw money.
304
00:19:33,110 –> 00:19:37,860
And if it is on a piece of paper,
then no one is able to steal it from you,
305
00:19:37,927 –> 00:19:40,229
no one is able to hack it, etc.
306
00:19:40,296 –> 00:19:42,932
Presuming you hid it
in a safe place.
307
00:19:43,065 –> 00:19:49,939
There are some risks, like fire,
well then, we will lose those bitcoins,
308
00:19:50,005 –> 00:19:53,809
if this private key
is not written down somewhere else.
309
00:19:53,876 –> 00:19:55,544
Well, but that’s the risk.
310
00:19:55,644 –> 00:19:59,530
That’s why we have apps,
mobile wallets like Coinomi.
311
00:19:59,540 –> 00:20:05,554
We can have paper wallets, or for example
hardware wallets such as Trezor,
312
00:20:11,126 –> 00:20:16,498
which you simply plug in to USB,
enter your PIN and use it for storage.
313
00:20:16,565 –> 00:20:20,836
Although they also carry some risk, and
you have to pay for them.
314
00:20:20,903 –> 00:20:27,110
To start, I recommend to use, for example
Coinomi and send your funds there,
315
00:20:27,110 –> 00:20:32,615
and if you want to hold long-term,
then make transfer to a paper wallet
316
00:20:32,681 –> 00:20:38,254
and then tuck two copies away
and hide them in two separate places,
317
00:20:38,287 –> 00:20:41,924
so that to be able
to pay it out a few years.
318
00:20:41,991 –> 00:20:47,463
This brings us to where we have our funds
in the form of Bitcoin
319
00:20:47,463 –> 00:20:50,833
in a paper wallet
or Coinomi mobile wallet.
320
00:20:50,899 –> 00:20:55,400
And if you want to cash them out,
better don’t it right away, just wait,
321
00:20:56,120 –> 00:21:00,440
if you want to withdraw your
cryptocurrencies from Coinomi
322
00:21:00,440 –> 00:21:03,245
and cash them out
into euros or dollars,
323
00:21:03,312 –> 00:21:09,551
then type your public key to make a transfer
from Coinomi to Binance or Coinbase
324
00:21:14,680 –> 00:21:20,162
and at that moment your cryptocurrencies
will appear there and you can sell them
325
00:21:20,229 –> 00:21:28,730
for example for euros or dollars
on many platforms like Binance, Coinbase, KuCoin.
326
00:21:28,730 –> 00:21:31,280
And that’s how
we got the money back.
327
00:21:31,280 –> 00:21:34,743
If you have funds
in your paper wallet,
328
00:21:34,743 –> 00:21:41,116
then you must first import them
from your paper wallet into the mobile one.
329
00:21:41,650 –> 00:21:44,150
In Coinomi for example
330
00:21:44,320 –> 00:21:48,230
you just type your private key.
331
00:21:48,230 –> 00:21:53,262
All bitcoins are downloaded
in this case to Coinomi
332
00:21:53,262 –> 00:21:56,332
and then we can send it
to an exchange and sell it.
333
00:21:56,398 –> 00:22:03,138
An advantage of a paper wallet is that
no one can steal bitcoins or other cryptocurrencies
334
00:22:03,138 –> 00:22:05,741
because it can’t be
accessed from the web.
335
00:22:05,808 –> 00:22:06,942
I think that’s it.
336
00:22:07,042 –> 00:22:09,978
If you have questions,
leave your comment below.
337
00:22:10,045 –> 00:22:12,648
If you want to learn more,
visit my blog.
338
00:22:12,748 –> 00:22:17,052
You can find everything there.
I might have forgot to tell something.
339
00:22:17,353 –> 00:22:19,922
I recommend my
free cryptocurrency course,
340
00:22:19,988 –> 00:22:21,790
made especially for you.
341
00:22:22,424 –> 00:22:26,028
Last thing, a tip from me
on how much of a cryptocurrency to buy.
342
00:22:26,095 –> 00:22:28,931
I think you should buy
a little to start with.
343
00:22:28,997 –> 00:22:33,802
Buy for a dozen dollars
or euros to learn the whole process,
344
00:22:33,869 –> 00:22:37,239
buy cryptocurrencies on
any of these websites,
345
00:22:37,306 –> 00:22:39,942
register preferably on
at least two of them.
346
00:22:40,008 –> 00:22:43,212
Buy small amounts on each,
learn how to use them,
347
00:22:43,278 –> 00:22:46,582
understand how the whole
blockchain and bitcoin work.
348
00:22:46,582 –> 00:22:50,119
Send some to a mobile wallet,
some to a paper wallet,
349
00:22:50,152 –> 00:22:52,721
import it, send it back
to the exchange,
350
00:22:53,255 –> 00:22:54,456
maybe even sell it.
351
00:22:54,523 –> 00:22:57,226
Do the whole process
on a small amount.
352
00:22:57,259 –> 00:22:58,627
Learn to understand.
353
00:22:58,694 –> 00:23:00,462
Even make some
minor mistakes.
354
00:23:00,529 –> 00:23:05,267
Later, only after you learn this,
and understand how cryptocurrencies work,
355
00:23:05,300 –> 00:23:07,936
you can buy some larger amounts,
356
00:23:07,936 –> 00:23:11,774
and from time to time,
when the exchange rates are off-peak,
357
00:23:12,641 –> 00:23:17,546
buy more and maybe someday
they will gain a lot of value.
358
00:23:17,613 –> 00:23:18,414
No one knows.
359
00:23:18,414 –> 00:23:22,918
That’s why you should invest only a small portion of your funds.
360
00:23:22,918 –> 00:23:23,886
Thanks a lot!
361
00:23:23,952 –> 00:23:29,925
I warmly invite you to my free Bitcoin
course and my free Amazon and online business course.
362
00:23:29,992 –> 00:23:30,893
See you!
363
00:23:30,959 –> 00:23:33,929
Subscribe, give your thumbs up
and take care!
Contents
- 1 Bitcoin and cryptocurrencies for beginners — first steps
- 1.1 What will you learn in this post
- 1.2 All the links in this article:
- 1.3 Bitcoin and cryptocurrencies for beginners: first steps
- 1.4 — listen to the podcast
- 1.5 Bitcoin and cryptocurrencies for beginners: first steps
- 1.6 — see the video
- 1.7 Related posts: