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Part 1: Introduction to the World of Cryptocurrencies
How Cryptocurrencies Work
Every computer that is connected to the network is called a node. Whenever a transaction is made, the data gets sent to the nodes. The nodes are responsible for verifying that the transaction is legitimate using complex algorithms. The process of verifying transactions is called mining. If the transaction is valid, it is combined with other transactions and added to a block.
What are Confirmations?
You may notice that when you transfer your coins, the transaction will be pending until a certain number of confirmations have been reached.
Choosing a Safe Wallet
It's always recommended that you only download and use the official wallet of the cryptocoin you'd like to store. However, If you want to hold more than one coin in the same wallet, there's other solutions out there.
Best Offline Wallets
Best Online Wallets
Coinbase is one of the most well known place to buy, sell and store Bitcoin, Ether and Litecoin. It’s a hosted wallet and Coinbase owns the wallet. If coinbase goes down, you will not have access to your funds until they return. With web wallets, they have the right to terminate accounts for breaking their TOS and hold your funds until you complete certain procedures. So If you are planning to hold a larger amount for a long period of time, it would be better to hold them elsewhere such as a Ledger Wallet for maximum security.
Blockchain.info Wallet is the worlds most popular Bitcoin wallet. It's simple, safe and secure. They have over 14 million wallets with more than 100 million successful transactions.
Bitcoin Core Wallet - Bitcoin Core has a built in wallet with graphical and command line/API modes. It can also simultaneously support multiple lightweight wallets with similar security and privacy to its built-in wallet. Bitcoin Core ensures every block and transaction it accepts is valid, increasing not only your security but also helping prevent miners and banks from taking control of Bitcoin.
Ethereum and Altcoin Wallets
MyEtherWallet is a Free, open-source, client-side tool for easily & securely interacting with the Ethereum network. You have full control of your wallet and MyEtherWallet neither holds nor has access to your funds. Everything is stored locally. In my opinion, MyEtherWallet is one of the easiest wallets to use. Simply enter a password, download the keystore file provided and save your private key somewhere safe. You will need one of those every time you want to access your wallet.
Note: You cannot buy or sell Ethereum here and you can only hold Ethereum and Ethereum based tokens. Also, MyEtherWallet is a victum to many similar phishing sites. The ONLY legitimate URL for MyEtherWallet is www.myetherwallet.com.
Jaxx is another open-source, client-side tool for storing your cryptocoins. They are always adding support for more coins. To see the current list of supported coins, click here. You have full control of your wallet and Jaxx neither holds nor has access to your funds. Everything is stored locally on your device. Jaxx also has ShapeShift built in. This means that you can exchange your cryptocurrencies for others, almost instantly.
Exodus is an all-in-one app to secure, manage and exchange cryptocurrencies. Exodus is open-source and is said to be very secure. They have a great support team and a beautiful looking application. Here is a list of supported and upcoming coins you can store in your Exodus wallet.
Online cryptocurrency exchanges are websites where you can buy, sell or exchange cryptocurrencies for another digital currency or fiat money (USD, EUR etc). It's often a good idea to have accounts on more than one exchange because sometimes you'll see that one coin on "exchange A" is worth more on "exchange B". You'll get a better bang for your buck!
The Most Reputable Exchanges
Before you can buy, sell and trade cryptocurrencies, you must first sign up to a reputable exchange. There are so many exchanges, it’s important you do your research before joining one to make sure it’s not a scam. Most of it comes down to preference but there are a few things to look out for and a few things to point out. My personal favorite is Bittrex (listed last) since they have the largest coin selection.
Coinbase is one of the most popular exchanges. It’s extremely easy to use and it’s a relatively safe place to store your coins. You can buy Bitcoin, Ether, and Litecoin instantly with a bank account or credit/debit card. If you are a US citizen, you can even use Paypal as a payment method. Coinbase is available in 32 countries and currently supports selling in 30 of those countries (Canada and Australia are excluded).
- Instantly buy Bitcoin, Ether, and Litecoin with credit/debit/bank/paypal.
- Sell Bitcoin, Ether, Litecoin.
- Very simple and easy to use user interface.
- Can not sell if you’re in Canada or Australia.
- Have been known to “randomly” close people’s accounts and hold funds until verification. It’s best to not hold a large amount of coins here as a precaution.
- Site goes down more often than the others on this list.
Kraken is one of the top European based exchanges and offers a variety of fiat to bitcoin pairs such as JPY, EUR, GBP, EUR, CAD, and USD. The exchange also has 16 popular crypto to crypto trading pairs including ripple, litecoin and dogecoin. The fees depend on the trade volume and range from 0.05% to 0.75%. Like most exchanges, kraken has two factor authentication for added security.
- Funds are safe and secure. Provide multiple levels of two-factor authentication for maximum safety.
- Currently has 16 of the most popular digital currencies including the big three (BTC, ETH, LTC) and smaller ones such as ripple and dogecoin. A wide variety of currencies.
- Can deposit/withdraw USD, CAD, GBP or EUR funds used for buying/selling your currencies.
- Takes a few weeks to verify account (needed for funding/withdrawing)
- Website is a little confusing, especially for new users.
Poloniex is a pure crypto to crypto exchange based in the United States. They had a huge site upgrade back in 2015 where they added technical analysis charts and live chat which means it is easy to stay aware of news flow and analyze price trends before taking a position. Trading fees are flat at 0.2% and deposit and withdrawal fees are subject to the blockchain's specific transaction fee.
- Has a large selection of cryptocurrencies including a lot of smaller altcoins
- Has over 60 digital currencies available for trading
- Another one of the largest cryptocurrency exchanges based in the USA.
- Detailed data/charts and a beautiful user interface
- Cannot buy digital currency, just trade it.
- Some users have reported that they have lost funds when trying to deposit into poloniex. It is unclear whether this is an issue with the blockchain or poloniex itself.
- Slow verifications
Bittrex is one of the largest crypto to crypto exchanges. They have the widest selection of digital currency, even highly volatile currencies. Because of this, you will likely see some pump and dump schemes which hurts the cryptocurrency ecosystem as a whole. Trading fees are 0.25% with no reductions like cryptsy - and withdrawals are completely free and subject only to the transaction fee specified in the blockchain of the particular crypto currency.
- Huge selection of cryptocurrencies to choose from
- Advanced charts, easy to use user interface
- Fast identity verification
- Little to no issues with “lost coins”
- Low, flat rate (0.25%) fee
- Spotlight of best performing coins on homepage
- Support can be a little tough to get ahold of
- Logs you out after a short period of inactivity, then you have to login again. This can get very annoying if you have two-factor authentication turned on (you most definitely should!)
Buying, Selling and Trading Your Coins
There are two main strategies for cryptocurrency investing. Hold and Trade.
Holding (or better known as HODL) is when you buy a cryptocurrency with the intention for holding in your wallet for a long period of time with the hopes that the coin will increase in value.
Trading is the opposite. Take a look at the chart below for Ether. Notice the highest and lowest points? It's a trader's job to determine when the coin will go up and when the correction will happen and then buy and sell their coin accordingly, every day. If you're good at predicting the market, day trading can yield much higher profits.
The second part of this guide will teach you some pretty good technical analysis techniques which you can use if you decide to day trade.
Cashing Out Your Gains
Once you're satisfied with the money you've made, it's time to cash it out, back to fiat - your native currency. There are quite a few ways to do this, but most of them involve selling your coins for Bitcoin before you can cash out. Here a few we've mentioned on our blog before:
Those are some of the easiest ways to get cold hard cash for your coins. There are plenty of other ways, and if you have any questions about any of them, you can ask us here.
Investing in ICO's
Most people only buy ICO's in the hopes that in the future it'll be the next bitcoin, or simply a quick gain once that coin hit's the exchanges since the ICO prices of the coins is usually much cheaper. The other people who invest are people who actually believe in the idea the company has. All the ideas and the road maps can be found in the companies whitepaper. You should always read the whitepaper and only invest if you truly believe in the idea, not just for the hopes of a quick gain. Don't buy into the hype.
Part 1 Conclusion
So by now you should have a pretty good understanding of what a cryptocurrency is and how they work. In the next part of this training, you will get into more advanced techniques that you can use to MAKE MONEY!
So, now on to part 2...
Part 2: Technical Analysis Training
Learning how to read the charts is a big help. It allows you to make educated guesses when trading your cryptos. This section of the course will focus on Technical Analysis. Using the strategies below, you should have no problem making 5-15% gains daily. Since these can get a little complicated to understand, we've created a video series so you can follow along.
Introduction to Technical Analysis
Gain Focused Trading Strategy
Fundamental Vs Technical Analysis
Want to Learn Even More?
Because Bitcoin, and cryptocurrencies in general, are complex and highly technical topics. The learning curve is extremely steep... this course helps with that.
I really love to help beginners get started with cryptocurrencies. This is what this course is for - getting YOU up to speed on cryptocurrencies, and crypto trading.