Totally New to Cryptocurrencies? Here Are The Top 5 Things You Should Do.

in #tutorial7 years ago (edited)

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Since the rate of newbies coming into the cryptosphere is at a historical high on my side, I've taken some time to write this so I won't have to repeat myself over and over again. That said, I've never once tried to charge my friends anything even after spending hours walking them through some tutorials and analysis of the technology. Some say that I should start doing so.. but for now I would like to keep it that way. The beauty of blockchain technology is that it reduces our need for a trusted third party to a minimum and represents the first time that we can truly begin to own records of our identity and asset. So in my opinion, it's best to understand the technology, and subsequently, do-it-yourself.

1. Learn to do-it-yourself

I know there are plenty of cryptocurrency-related service providers that take hold of your funds, mining rigs, and sometimes, passwords. As usual, try to avoid such things especially in an unregulated market. It's all too easy to get scammed. Plus, consider there's a single point-of-failure in these setups. Blockchain technology is here to minimise our dependency on any middleman, providing us with the best security if we take the steps to be responsible over our assets. Unless absolutely necessary and unless you're willing to bear some risks for the sake of convenience, try to AVOID the following:-

  • Mining services. Most of the times, I'm pretty sure folks providing such services are trustworthy. But again, you'll never know what can happen placing trust in somebody else for the long-term. Money has the ability to cause people to make bad short-term decisions more often that we can admit anyway. So avoid getting someone else to handle and house your mining rigs. I'd more likely to trust if a close friend doing it instead of someone on social media trying to sell me the service. Regardless, it's best to learn and do-it-yourself.

  • Centralised exchanges like Coinbase, Bittrex, Bitfinex, etc. I still use these exchanges every once in a while, but only for quick trades and in small amounts. Why avoid this? Access to your funds can easily be compromised by hackers and interventionists. I've not experienced any hack on exchanges before and I intend to stay away from being involved in such a possibility.

  • Third party wallets. If you don't hold the private key to your cryptocurrency wallets, you don't really own your coin. The good thing about third party wallets is that you're able to retrieve your password if you forgot or misplaced it. The bad thing about it is well, everything else. It's not very safe to hand someone else keys to your house is it?

2. Use these wallets

Here I'm going to present what I think are easy-to-use, secure, and important wallets for Bitcoin, Ethereum, and Steem. Everyone will have a different recommendation to this, but I prefer web-interfaces to wallets for beginners so here's my suggestion:-

  • Use https://blockchain.info for Bitcoin. It's easy to use and get into right away before finding your favourite Bitcoin wallet. I don't like installing executable files for wallets so I think the wallet on blockchain.info is a happy medium for usability and security. Just sign up, do a bit of reading, and follow the security steps. Be sure to backup your private key / phrase. Try completing level 1 and level 2 measures shown in the security center.

  • Use https://myetherwallet.com/ for Ethereum. Same reasoning as my Bitcoin wallet recommendation. As usual, follow the steps too and backup your private key. There are plenty of coins in the market that are Ethereum based so this wallet is pretty handy if you're into acquiring the many different kinds of tokens out there. Do your research if such coins are compatible though. For myetherwallet, click on the eye icon on your wallet once you've created it. Enter your password, and download the keystore file (private keys) and print paper wallet. Keep them safe.

  • Use https://steemit.com for the Steem cryptocurrency. There are many more ways to get a Steem account, but the reason why I recommend https://steemit.com is that it provides you with a Steem wallet and social platform to earn cryptocurrency as well. Steem's permissions key system is a little bit more sophisticated but worth it - read it here. Also, shifting part of your social feed to Steemit might be a good move as it has plenty of people talking about cryptos, unlike other places at the moment. Just check it out ;)

Be sure to double check if you can access your wallets before sending any funds to them. Feel free to explore other kinds of wallets once you're starting to feel comfortable and looking for better measures like hardware and paper wallets. There are plenty of other different wallets for other kinds of cryptocurrencies out there besides Bitcoin, Ethereum, and Steem, but I've kept it short here for the sake of brevity to providing you the best exposure to the market. As always, do your research on wallet compatibility and all. Most importantly, be the one that owns the private keys to your wallets!

3. Use 2-Factor Authentication in everything.

To secure your online accounts especially for email services and cryptocurrency exchanges, enable 2-Factor Authentication in the settings. Usually it'll prompt you to use the Google Authenticator app. Speaking from experience, you should use Authy instead. Yes, it can be used in place of Google Authenticator, and it works way better since it backs up your seed keys.

4. Use a password manager.

It's best to use different and complex passwords for all of your online accounts. It's the best way to secure yourself and isolate any account breaches. For that, use any one of these password managers here to store and fill-up your passwords easily. But of course, you'd have to be careful to secure your main password of passwords at all costs, although your account will most likely be safe anyway if you have 2-Factor Authentication activated for all of your online accounts. On a side note, it's best to avoid using your mobile phone for anything related to such sensitive passwords, and clear your clipboard as soon as possible if you happen to be doing the copy and paste thing for your passwords.

5. Learn to use Coinmarketcap

So you have some Bitcoin, Ether, and perhaps some Steem sometime soon from the exchanges in point #1, and want to explore the rest of the coins. Coinmarketcap, is in my opinion the best way to do that. Every coin can be clicked on and there will be links to relevant materials, including the markets the coin is traded on and its social feeds. Of course, do your own research properly when looking into these things. Don't take everything you read on the Internet to be true. Personally, I make it a point to study at least one coin per week.

The most important metric for comparison is probably market capitalisation, or network value. This is the thing people talk about when they're saying Facebook is worth $500 Billion. Same applies to the cryptocurrencies (or decentralised organisations or quite simply, communities). Other important information is circulating supply, and total supply. Cryptocurrencies are great because the supply is known and transparent, unlike traditional resources like gold, in which total supply is an unknown, and hence a difficult way to determine the level of scarcity and subsequently, value.

Resources

I've compiled a list of Youtube videos in a playlist for cryptocurrency newbies. Might be outdated and all, but this is a list that I'll try to update and expand from time to time. Check it out here: https://www.youtube.com/playlist?list=PLlYj20krCrV3QtDhfIrflxdu9we86ehNU

Closing words

For those of you that are scratching your heads over my emphasis on private keys and all, it's okay to rely on the likes of Coinbase for convenience until you've taken the time to understand the importance of securing your own passwords without a third party that might compromise your funds. In any case, it's a give and take with trusted third parties and it'll be up to your own taste in security and risk-appetite.

Anyway, I'm going to start funnelling my contacts that are interested in experiencing cryptocurrencies into this post, hence this little beginner's guide for total newbies. I might refine it over time, but so far this seems to be working well 90% of the time, at least in-person. I've also purposefully avoided pictures and lengthy explanations to encourage readers to check out the applications and websites I've mentioned. Go through their instructions and suggestions with care. For those that are not new in the space, what do you think are the best ways to get someone new into understanding the game and doing it for themselves?


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Thank you Kevin, this is amazing article! After Lisbon I was so inspired and started practice a bit or crypto currency trading ! It is going really well! Hope you all well! Merry Christmas!!!Can't wait to catch up next year!!

Hey thank you @ivargereiko hope the trading has been doing well? Always curious about people’s choice in coins - what’s your favourite so far other than steem?

Nice Idea @kevinwong of publishing this to stop having to explain the basic things all over again to different people, in my case, sometimes to the same people.. I felt inspired by this initiative and might start using some of my articles for this purpose.

I wrote one regarding the use of Crypto Currencies as a Store of Value, but it is not too well educated, if you feel like adding something to it or changing, please let me know.

Bitshares decentralized exchange is the future!
https://bitshares.org/

2FA that uses SMS or voice calls proved to be vulnerable in many occasions, recently one of the crypto currency youtubers announced his wallet got hacked and lost 110 BTC.
he claimed hackers simply called the phone company and asked for an additional SIM card, then proceeded to request a 2FA reset and the rest and the rest of story...

Yes avoid those. Most telecom providers now only accept thumbprints where I'm from so it's pretty safe in that sense. Or call the telco company to port lock.

Great Post, Kevin
So does AUTHY use SMS or voice calls? I have been trying to decide whether to use that one or google authenticator.

I use google authenticator, pretty safe from my end

Thank you for this introductory overview! Slowly but surely (I hope) I'm getting more comfortable with the crypto-currencies world.

upvoted & resteemed by @edward.maesen

Hey thanks for dropping by @edward.maesen, feel free to ask anything at all :) have fun!

Thanks for this article. I will do the 2 factorAuth. I Never looked at what it does so thanks for the heads up. When trading crypto which currency to you deposit your fiat into, bitcoin fees seem very high if you are depositing a small amount

yes it is high, which is why i prefer steem much more. hopefully the market becomes more rational over time :)

Not so nicehash got me ;( Claymore is taking over to heat my house now ;)

I had a terrible experience with nicehash which sucked up my funds with little to no returns. Some bug apparently. Never again!

After hearing all the bad news about nicehash I wanted to get my coins out of minergate. Surprise surprise I am having issues with withdraw. They have failed twice now and been trying to reach to support. Though for noob miners like myself who rely on a easy to use interface to mine.

Awsome info for people that are new to Crypto :)

I'm about 2 weeks in and I have been learning to do things my self. It makes it easier when I get enthusiastic about something and I just sponge up as much as I can as I go along and learn. I have watched courses and videos where I grab my note pad and write things down. It helps me process what I'm taking in which is re triggered when I read my notes again. An enjoyable experience l had was mining 100 Bytecoins overnight. Setting up a Bytecoin wallet and transferring the balance from the miner to the wallet. I have a dedicated stationary book for all my passwords, keys, reset passes.

Haha glad to know that. Learning is always fun :) Where are you currently getting your information/tutorials from?

Excellent post as always Kevin... I would add cold wallet as well but maybe not for beginners 😊

Thanks @mariandavp :) Yeah that's gonna be another layer of complexity.. let them figure out later.. can't believe i'm becoming the receptionist for the crypto corporation :P

Excellent post, Kevin! I'll be referring people here as well. :)

I agree with everything here, but still use Google Authenticator because Authy backups might decrease security by a small amount, but it's probably negligible. When my last phone died, it wasn't too terrible to re-verify with the various google auth services I didn't have recovery codes for.

Web wallets we can trust are a good starting point for new users. This year I started using a Ledger Nano S, and I'm really enjoying that as well, and is a good choice for those who plan to store more than they'd want on a web wallet.

I love that you added the "Introduction to the Internet of Money" video. So good.

Oh yeah the re-verification was quick enough. I wish there's a hardwallet that can house all kinds of coins other than Bitcoin / Eth!

The Ledger Nano S does support quite a few coins. I've been happy with it.

I wonder if it's ever possible for a totally universal wallet.. hmm