It seems like everyone and their brother is talking about Bitcoin and other crypto currencies lately. For those of you who are not familiar with what these are, they are basically a digital form of money. Unlike the dollar, you can not hold it in your hand and it is not backed by gold. This makes some people uncomfortable. Others simply think of it as another way to pay for things.
So How Do You Buy Crypto Currencies like Bitcoin?
Well, first you need a place to buy and store your currencies.
- Join a site like Coinbase and deposit funds there. With the frenzy of people that want to get into Bitcoin and other currencies, many sites have stopped taking new members. Coinbase was the easiest that I found to get accepted into. If you are a US citizen, then you will need to provide a photo id and actual picture of yourself to confirm that you are who you say you are. The best way to do this, in my experience, is by using your camera phone. The webcam on my computer kept causing a glare and it took me much longer than it should have to get approved because of this. The camera phone gave much clearer images.
- Once you get into Coinbase, you need to connect a credit card or your bank account. Whichever you choose, you will need to verify this as well. So you connect the account and then that account will be credited two small amounts under $2. You need to log into your bank or credit card account and find the two small credits and then go back to coinbase and input them, to verify that the account is yours.
- Once you have verified the transactions, you can transfer money in by buying a currency. Ex. You choose Litecoin and the money you transfer in goes toward that purchase.
- Once the money has been transferred, (this can take several days) you are ready to invest.
Why Litecoin Might Be Better Than Bitcoin for Investors
I know that everyone talks about Bitcoin but for people who want to trade currencies, Litecoin is a better option for a few reasons:
- Bitcoin is much more expensive than Litecoin so your investment does not stretch that far.
- The transaction fees on Bitcoin are much higher. I have seen days where the transaction fee is up to $40 per transaction. Litecoin is far less expensive.
- Bitcoin takes longer to process, which means you have to wait longer for your money to get where you want it to go.
How to Keep Coinbase Secure
Make sure to Authentication on your account. You will need the free Google Authenticator App on your phone. When you log in to Coinbase, you will be asked for an authentication code. Just go to your code. Open the Authenticator app and find the code. Input it into the coinbase site and log in as usual. The code on the phone changes frequently to keep your account secure.
Where Can You Trade Crypto Currencies?
There are a number of sites where you can trade crypto currencies and alt coins. Again, many of them are difficult to get in to. That should change over time but for those of you who want to get started trading right away, I recommend Poloniex. I was approved in less than 24 hours and this was true for others that I told about it. Again, for US citizens, you will need to give them a picture of your photo id and a picture.
Once your money is released on Coinbase and you are approved for Poloniex, you decide what currency you wish to buy.
Click on the currency you wish to invest in. Then when you see it pop up as the chart on the left side of your screen, scroll down. You will see an area where you can buy or sell that currency.
Just like when you buy stocks or other currencies, you have the choice to buy at the market price or to set stops and limits.
How to Keep Your Poloniex Account Secure
Use the Google Authenticator App just like you did for Coinbase.
Crypto Currency Trading Charting Software
Although Poloniex has basic charting software, for those who truly want to day trade these currencies we recommend Trading View software. It has lot of trading indicators and you can set up your charts using the ones that you prefer like Fibonacci and Bollinger Bands, moving averages, Williams % R, etc… There are a lot of techniques to choose from. Long term if you are buying these currencies with the intent to actively trade and not just hold it is a really good idea to get the Trading View software. It is also good for long term investors to know when to enter the market so you have more certainty that you are not entering at the high point of the market.
Where to Store Your Currencies?
Unlike a bank account, crypto currencies are not ensured so, if God forbid, the site gets hacked, you have little legal recourse. Because of this many choose to store their coins on a crypto wallet like the Ledger Nano S. You can transfer your coins out of Coinbase and Polonius and store them on this external devise. Unless someone literally steals the device from you and has your security code, your money stays secure.
I will be adding videos and further information, as I delve deeper into this fascinating investment.
****Remember to only invest what you can afford to lose. This is a highly volatile market with huge potential rewards and risks.
********* I am NOT a financial advisor. I am simply sharing my experiences with trading these crypto coins.