First Amateur Steps Into Cryptocurrency Trading With Bittrex

Well, that consumed an entire day!

It was finally time to figure out what all this cryptocurrency is for. I've been on Steemit long enough now (2+ months). I mean, half the content posted here is about cryptocurrency and trading, and I still hadn't even set up an account with an exchange yet. Shame on me!

My wife, who is as courageous as I am timid, did some bitcoin trading several years ago when it was first in the news. Not enough to get rich and retire, unfortunately. Or rather, maybe she did too much to get rich and retire. If she'd just invested in Bitcoin and then forgotten about it, we'd have a good nest egg right now.

After today, let me tell you, I understand why there's so many articles about this stuff. It's exciting, and it's bewildering.

I'm in no position to offer advice or a tutorial here, but I did feel like sharing my first steps. I suspect other beginners will hit the same speed-bumps that I did. Maybe more experienced readers can point out what I could have done better.

After reading some top-rated cryptocurrency articles and nosing around the wallets of a few whales, I decided to open an account with Bittrex. Getting the account open was extremely easy. So was transferring the nominal amount of SBD and STEEM I wanted to play with.

I could see right away that I'd want to upgrade my account from "New" to "Basic." This took a bit longer. First, they were apparently unable to verify my identity against public records. (I feel kind-of good about that, actually.) Second, because lousy cell-phone reception means I'm never able to get text messages in enough time to respond to them. So it involved a lot of chucking my phone out into the yard (where there's a stronger cell signal), clicking a link, and then running out to grab it. Eventually I was able to get my code and establish the account.

Next I decided to set up two-factor authentication, which involved downloading an app from Google and scanning a QR code. Now my phone generates a time-limited six digit code I need every time I want to log in. This made me nervous, because what if I lose my phone? A bit more research and a printed-out QR code later, and I think I've got that risk covered. Probably.

Most of my day was spent scratching around the Bittrex site like a chicken looking for worms. So many charts and so much data! Should be right up my alley. There was a major detour to read up on those "candle" charts and just what they represent. Once I knew the difference between the candle and the wick, and what the different colors represented, I felt empowered. And - holy cow! - did you know you can follow the trading by the minute? It's no wonder this stuff gets so volatile.

But I'm playing with $30 here, so what's the worst that could happen? I'm extremely grateful that I've been able to practice these tiny trades with money I've earned on Steemit. I'm so risk-averse that I'd have a hard time withdrawing cash from my bank account to risk on volatile markets. Facebook never handed me any digital tokens to take to the arcade. Neither did my own blog or web-site, for that matter.

Getting the trades to execute was a bit awkward. I realized, after a long wait, that if you ask to sell your Steem at the most recent price, but then the price drops, you could be left hanging for a long time. (I've bought and sold stocks before, but it usually involved a phone call to a broker - none of this candle/price spread/bid vs. ask business.) I learned that lowering my ask a few pennies to the amount of the nearest bid was the only way to ensure the trade happened right away. (Pretty simple, once you think about it.)

Then I had to wrap my head around the idea that all these currencies were trading against the value of Bitcoin, not dollars. First off, it's a mental challenge to handle all those zeroes after the decimal point. One STEEM = 0.00035646 Bitcoin? So that's like...36 hundred-thousandths? It's easier to compare prices if you squint and let your eyes go a little fuzzy. Or you can hold a ruler against the screen to line up the decimal places.

Then there's the challenge of looking at the trends and considering: Hmm. STEEM is falling against Bitcoin, but if Bitcoin is climbing against the dollar, maybe Steem is really climbing too. Which one is climbing faster??? It's like a complex physics problem where you have to consider multiple vectors. But it's really got me thinking about currencies and relative values.

Then it turns out that all the "big-boy coins" on Bittrex actually do trade against the dollar. Kind of. Bitcoin, Bitcoin Cash, Ethereum, Monero, Litecoin... Those are on a Dollar Market instead of a Bitcoin Market. But selling Bitcoin gives you something called a USDT - T for "token", I think. As far as I can tell this is a stand-in for the dollar, but not actually worth anything, since trading into tokens reduces the value of your wallet by that amount. It definitely discourages me from leaving any assets in this imaginary "token."

This is where I discovered that you can't actually withdraw funds as dollars from Bittrex at all. I thought that there'd be a way to link PayPal or a credit card or bank account to the account to buy and sell, but apparently not! What happens in crypto, stays in crypto, it would seem.

This is when my wife walked by and said, "Well duh! You'll need a Coinbase account to link to your bank."

So...apparently some exchanges allow you to withdraw your funds as USD and some don't. Then why not just do all this trading on Coinbase? Well, they don't handle Steem for one thing. And apparently they also charge a good deal in fees. Anyway, I'm putting off an exploration of Coinbase for another day.

I've got mixed feelings about how I've spent the day. On the one hand, I've learned a bit about trading and taken my first steps into an exchange. On the other, this feels more like gambling than work. There are a lot of people playing this game, and what does it actually do to add value to the world?

All these coins are on the march now, with so many people dumping assets into them over the past couple of months that it would have been hard to lose money. Of course it could could turn around at any point. When it does, I suspect that which coins we've bet on will be about as relevant as which color tulips you bought in 1637 Holland. I hope I'm wrong.

Placing bets with my $30 was a thrill, for sure - mostly because it's nothing I can't afford to lose. Will it tempt me to open a Coinbase account and actually pump real cash in? Hmm...

"There's something peculiar about this Steem." My odds for getting rich on currency exchanges are about the same as my making a living as an artist!