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Educate yourself first
Buying - Where, How and Security
Understand the risks
Cryptocurrency, crypto, Bitcoin are all hot buzzwords in the financial world, and for good reason. It's a new and exciting way to invest and potentially store value, but it can also be confusing and overwhelming for those who are new to the game.
Currently, we consider the biggest issue to be the lack of separation between Bitcoin and the rest of cryptocurrency. The education is not there yet (until now) and therefore people lump cryptocurrency and Bitcoin together. As Bitcoin supporters ourselves, we are trying to mitigate this by producing a course that is truly beginner-friendly. We explain in the course that our name, 123Cryptos, was an opportunity to lure in crypto curious people and help steer them on the Bitcoin path.
If you're thinking about buying Bitcoin or cryptocurrency but don't know where to start, you're not alone. In this blog post, we'll break down the basics of buying cryptocurrency and provide 3 stages to help you get started.
Educate yourself first
First, it's important to understand what Bitcoin and cryptocurrency is and how it works. We recommend finding useful education resources, such as courses that help explain the basics in a simple and straightforward way. Oh wait, you're already at the right place. 123Cryptos is the perfect home if you're crypto curious and want to learn in a simple way.
Simply put, cryptocurrency is a digital currency/asset that uses cryptography. Cryptography is a secure method of communicating and verifying transactions.
The first, most well-known, and in our eyes, only worthy crypto is Bitcoin. It was created in 2009 by an unknown individual/group using the pseudonym Satoshi Nakamoto. It has withstood lots of criticism, backlash and attacks, but thanks to its decentralised nature, Bitcoin remains bulletproof.
Since then, thousands of other cryptocurrencies have been created. Sadly, the majority of them lack fundamental use-cases or security, which has led to many scams and thousands of victims to fraud.
The last point emphasises why it is so crucial you educate yourself before even thinking about investing your money. Cryptocurrency is unregulated for the most part which means you will not be protected in the event something happens with your crypto. That's why you should do your own research and find helpful resources (perhaps the 123Cryptos course) that give you the information necessary so that you can make informed decisions.
Buying - Where, How and Security
Once you have done some research and hopefully having taken advantage of the course we offer, you may now want to buy some Bitcoin or crypto.
To buy cryptocurrency, you'll need to set up a digital wallet. A digital wallet is like a bank account for your cryptocurrency, and it allows you to store, send, and receive digital currencies. There are many different types of digital wallets available, including software wallets, hardware wallets, and paper wallets. Each type has its own pros and cons, so it's important you have done some research so that you choose the one that's best for you.
Once you have a digital wallet set up, you'll need to find a reputable cryptocurrency exchange or marketplace to buy from. A cryptocurrency exchange is a platform that allows you to buy, sell, and trade cryptocurrencies. Some popular exchanges include Coinbase, Binance, and Kraken. It's important to choose a reputable exchange with a good track record, as there have been many cases of exchanges being hacked or shutting down unexpectedly.
As we highlighted in a previous safety session blog, it's important to understand the meaning behind "not your keys, not your coins". In simple terms, unless you hold your Bitcoin or crypto on a hardware wallet such as a Ledger or Trezor, you run the risk of losing your coins. Although it will say you have x amount on an exchange, this is not not entirely the case. That's why the phrase above highlights the significance of holding your own private keys.
Become your own bank
Hardware wallets allow you to take full ownership of your money. You become your own bank. You control what you have, where it goes and when it goes. This is a common misunderstanding with traditional banking. Although you may believe that you own your money in a bank, the reality is somewhat the same as leaving your crypto on an exchange.
That said, if you're investing small amounts e.g. less than the cost of buying a hardware wallet, you may want to consider using an exchange or hot wallet to begin with. Jumping straight into full control of your money requires a lot of responsibility, which is why we recommend easing into things after having done considerable research.
Understand the risks
We have already mentioned a few risks that you should be careful of:
Many cryptocurrencies don't offer any use-cases and have been subject to many scams and led to thousands of victims of fraud
Not doing your own research can result in taking the advice of bad actors
You do not own your Bitcoin or crypto if it is left on an exchange
Buying and storing your crypto on a hardware wallet requires responsibility in the form of storage and security.
Guess what? There's more! Most people that have heard of crypto are aware that it is very volatile. That is true. It's important to keep in mind that the prices can be highly volatile and can swing both to the upwards and downwards in a matter of minutes.
This means that the value of your investment can change rapidly, and you could end up losing a lot of money if you're not careful. To minimise your risk, you should consider diversifying your portfolio beyond just crypto. Instead of putting all your eggs in one basket, there are many different forms of investing your money e.g. stocks, gold, real estate.
That said, the volatility alone should not necessarily put you off learning more about Bitcoin. It's worth knowing that Bitcoin is an asset that has only been around just over a decade. The same levels of volatility and price fluctuation was frequent in emerging assets such as Amazon back in the 1990s/2000s.
In summary, having an interest in Bitcoin and cryptocurrency can be a great way to invest and store value, but it's important to do your research and proceed with caution. By setting up a digital wallet, choosing a reputable exchange, and diversifying your portfolio, you can minimise your risk by gradually building up your confidence as you learn more.
If you're still feeling unsure about where to start, there are many resources available online to help you learn more about cryptocurrency and get started with your investment journey. The 123Cryptos course is 100% beginner-friendly. It only takes 100 minutes to complete and we cover the basics of Bitcoin, money, technology and crypto in a simple and jargon-free way!
Stick around and join in on the conversation over on the community page.