I first heard about Bitcoin, Ethereum few months ago in May. The world of cryptocurrency was completely alien to me. I was desperate to invest after reading so many success stories on YouTube and google. When I first started I was lost in the sea of unknowns. I had no idea how to start, where to start and what to look for on internet for help. Having no prior knowledge of trading made things even more difficult for me. This cryptocurrency guide covers very basic things you need to learn to start your journey in the world of cryptocurrency. So, let’s start.
What is cryptocurrency?
Cryptocurrency is form of digital money which is designed to be secure and safe, so that we can have more secure and safe digital transactions online. We all have heard about Bitcoin, Ethereum and of course about Steem 😊, all these are called cryptocurrencies. Bitcoin is the king of market having majority of the market share, all other coins are known as ‘Altcoins’. The currencies of real world such as Dollars, Euros and Pounds are referred to as “FIAT” by the cryptocurrency community.
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How/From where to Buy? What are Exchanges and Brokers
You can buy cryptocurrency from Brokers available in your country of location or through Exchanges. Now some of you might be wondering what are Brokers and Exchanges.
The key difference is, on exchanges you execute trade (buy/sell) yourself whereas if you use broker they will execute trade for you and will charge you for that service. In simple words, you will pay a premium for buying cryptocurrency from brokers which makes trade expensive. Some of the Brokers available in UK are bittylicious.com, Coindesk.com, bitbargain.co.uk and many others you can search online for brokers available in your country. Majority of the brokers only sell few popular coins like Bitcoin, Ethereum, Litecoin etc. So, if you want to invest in any other Altcoin, you will have to create an account on Exchange.
Buying from brokers is smooth and effortless process as we can buy using debit and credit card. Whereas to trade on Exchanges one must create account first which is a complex process as one has to go through rigorous vetting process. After successful account creation, next problem is funding your account or simply adding money in that account for buying cryptocurrency. This can be very difficult step for some users depending upon your location. For me as I am in UK, I had to use SEPA transfers to add funds on my Bittrex exchange account. Whereas for people living in Europe it will be just normal bank transfer. This is because Bittrex is located outside UK and will only SEAP transfers for international transfer. You can also transfer bitcoin or Ethereum to bittrex to buy other Altcoins
Few examples of very popular exchanges are Bittrex , Poloniex, Kraken. Now after Funding your account, the next step will be to learn trading on that exchange. There are thousands of videos and articles available online to learn them.
What is Wallet ?
Like in real world wallet in the digital world serves the same purpose. It acts a storage place for keeping cryptocurrency. This is simply an address on the blockchain, which has a public key and private key. Private key is your password and public is address where Funds are sent. It looks like below:
1ECGUKEosEhaZnywCVxw6e1VUcPRqGkhvd
Most of the exchanges and brokerage websites provides you these wallets. Each currency has its own Wallet. you can transfer coins only between two same currency wallets by paying some fee. (known as mining fee)
Finally, do you own research about the coin you want to invest in. Try to understand the future use and technology behind.
Happy Trading!!!!!
You can ask questions in the comment section below.