Cryptocurrency – How to Buy, Store, Transfer & Make Money

March 2, 2021
March 2, 2021 Mr. Meher

Cryptocurrency – How to Buy, Store, Transfer & Make Money

Basics of Crytocurrency

This article on Cryptocurrency is a copy of the article written by Cryptofitguy: Original Reddit Link

Well, I have been trying to write this for a long, but my current job was not allowing this. Luckily I left the job and all the miseries associated with it. Anyway, Just a little background, I am an ex-banker and been in crypto for the past few years; I have seen ups and downs, pumps and dumps, all the HODL MOON and rekt, and whatnot. Lately, I am getting a lot of requests from people asking about cryptocurrencies or Bitcoin in general. So, I am writing a fully-fledged guide here on how you buy, store, transfer and make money out of crypto; Last part is very subjective, though.. hahaha.

Just to be clear, I will focus more on providing relevant resources to learn rather than bullshitting my own advice.

Why Cryptocurrency?

The biggest question is why one should ever buy crypto. Why should we spend money on something that we can’t even touch or feel?

Well, before answering that, let me tell you that we do not live in a Utopia. We live around mean and selfish people, corrupt politicians, filthy rich people who want to control and peek into every aspect of our lives. And Our current system consists of a lot of intermediaries, which result in extra cost, time and chances of fraud.

Bitcoin just came to get rid of such people. It works on a decentralized mechanism where we cut the middleman or centralized institutions out of the system and transfer the trust from humans to computers(nodes), rendering error and fraud chances while offering secure and seamless transactions.

Imagine sending millions of dollars from one country to another in real-time with fees as low as a few dollars. Not to mention, payment is only one use out of thousands that the underlying technology of crypto-currencies blockchain offers. Besides, in terms of investments, it has outperformed every other asset class imaginable in the last decade.

  • If you want to dig deeper into the technological aspect of bitcoin, there is a free online course by Princeton University on youtube- Princeton-Bitcoin
  • Also, look at the work of Andreas M. Antonopoulos, he is a highly sought expert in bitcoin and blockchain technology, known for making complex subjects easy to understand-Aantonop crypto
  • If you’re a book person- Books to learn about crypto

 

How to buy Cryptocurrency

Now that you know about cryptocurrency and how it works, how do you become part of this revolutionary currency? There are crypto exchanges in almost all the countries, and it’s easy to buy from your native currency-I am going to list some of India’s most popular exchanges:-

  1. Wazirx

    (Signup- wazirx.com)
    Well, this is my personal favourite. CEO Nischal Shetty is a fantastic person. It was the only exchange running during the hard times of 2018 when RBI brought circular prohibiting Banks to provide services to individuals or any company dealing in crypto-currencies, especially exchanges. Started it’s legendary P2P service during the ban and soon outperformed every other exchange in terms of users and trading volume in India. Ban was removed, and Wazirx emerged as an unconquered champion. Currently, Wazirx is acquired by Binance and leading as the biggest cryptocurrency exchange in India.
    Step by step guide to sign up- Wazirx guide How to deposit INR- Wazirx deposits

  2. Binance

    (Signup- Binance.com)
    Binance requires no introduction. It’s the most prominent cryptocurrency exchange in the world in terms of the tradingvolume. CEO Chengpeng Zhao is a visionary person and one of the fastest people to become a Billionaire. It has also launched its p2p trading service in India, where people can buy major cryptocurrencies through INR. Without a shadow of a doubt, it’s the most trustworthy and credible exchange out there. It also offers various other products, including Margin trading, futures & options, staking and other investment instruments. It won’t be wrong to say it’s a complete crypto ecosystem on its own.
    Not to mention, native exchange token BNB( used to save fees) has skyrocketed 150 times from $0.5 in 2017 to $75 recently.
    Educate yourself with Binance- Binance Acadamy

  3. Zebpay

    (Signup – Zebpay.com)
    Zebpay is one of the oldest crypto exchange in India. Started back in 2015, it used to be one of the most popular exchanges in India. Although they ran away with their baggage in 2018 after the Govt regulations, they got back in business recently. Well, Zebpay is not my first choice, but it’s still better than some other shady exchanges. Besides, they have a decent looking app with an easy interface.
    Not to mention, having an account on multiple exchanges might come in handy in a situation of arbitrage. Indian exchanges tend to provide a lot of such opportunities, especially in days of volatility. Step by step guide- Starting with Zebpay

  4. P2P Exchanges

Sign up- Localbitcoins.com
There are people basically who don’t trust exchanges and instead prefer to trade more privately. On LocalBitcoins, you are dealing with humans. Unlike centralized Bitcoin trading websites, LocalBitcoins allows you to trade directly with another person. It allows users to create advertisements and choose the payment method like CASH/PAYTM/IMPS/NEFT and their own exchange rate to buy and sell bitcoins from and to other LocalBitcoins users. LBTC acts as an Escrow and protects both buyer and seller by keeping the bitcoins safe until the payment is made. The seller then releases bitcoins to the buyer.

This is very popular among Tax evaders..lol! Just a tip, always choose a safe public place when dealing in cash.

 

 

Public & Private Key

Public key:
It’s a large string of alphanumeric key that you use to receive funds. It’s called a public key simply because it is meant to be shared publicly and enable you to receive funds.

Private key:
A private key is a sophisticated form of cryptography that allows a user to access his/her cryptocurrency.

 

 

Storing cryptocurrencies

1. Exchange Wallet

This is the most widely used and convenient method of storing crypto. You buy from an exchange, you let it stay there, sounds very easy. The only downside here is that it is risky. As history dictates, exchanges are not immune to cyber-attacks. There were instances of fraud and robbery with mainstream crypto exchanges like Mt-gox, Bitfinex, Bitgrail, DAO, Upbit, where billions of dollars worth of bitcoins were stolen by hackers. So, it really makes sense to look for safer alternatives, isn’t it? There is a saying in crypto, You own your bitcoin only when you have access to your private keys, and in this case, exchanges have it. Although, Exchange wallets poses incredible convenience if you’re an active trader and don’t want to get into the hassle of transferring crypto back n forth.

Most reliable Exchange wallets-

    • Coinbase (works under SEC regulations)
    • Binance (more suitable for altcoins)

Always have your 2fa enabled for withdrawals

2. Hardware wallets

This is one of the safest ways of storing crypto-currencies. A hardware wallet is basically a USB device that saves the private keys securely in an offline manner. It has a serious advantage because it never allows your private keys to come in contact with internet-connected computers or any vulnerable software or attack. Ledger and Trezor are some of the most reliable and popular brands. You can also look for Mycelium and Electrum.

Ledger: https://shop.ledger.com/products/ledger-nano-s

Trezor: https://shop.trezor.io/

3. Paper wallet

The idea of a paper wallet is very simple. You set up a wallet offline while following some simple instructions, and then you simply print out the private and public keys on a piece of paper. The keys will also be printed in the form of a QR code that you can scan to get access to your funds. If you use your crypto fairly regular, go for a hardware wallet. However, if you plan to just store your funds for a long time without much interference, then, without a shadow of a doubt, a paper wallet is the way to go. There are two paper wallet sites that we would like you to check out:

Walletgenerator.net

MyEtherWallet.com

 

Transferring Cryptocurrencies

Well, transferring cryptocurrency is simple considering you don’t make any mistakes. To transfer any cryptocurrency, all you require is the destination wallet address (deposit address). No matter which exchange you wish to transfer your funds to, the exchange will provide you with the receiving address. Make sure that you’ve copied the right address of the coin that you are looking to transfer. Sending coins to the wrong address will result in the loss of coins, and you have to depend on the mercy of exchange to get your coins back.

In general, here are the steps to transfer coins from Exchange A to Exchange B.

  1. Go to Exchange B and head to Funds >> Deposits / Withdrawal section.
  2. Choose the coin and copy the deposit(receiver) address provided by the exchange.
  3. Now, come back to Exchange A and head to the Deposits / Withdrawal section.
  4. Choose your coin that you are looking to withdraw. Then paste the recipient address that you copied from Exchange B.
  5. Next, enter the amount to send and click withdraw. Now you’ll be asked to complete the validation process. It can be either OTP/2FA or email verification, depending on what you chose for your account security. Once this step is complete, your coins will be sent to Exchange B.

 

 

Making Money

HODL

The easiest way to make money in crypto is to buy and forget you ever had bought anything. HODL or Hold On for Dear Life is coined for long term investors who believe in the underlying technology and won’t sell until the mainstream adoption. It’s not just a notion; actually, it holds a strong premise. Speaking of which, no one has ever lost money by holding crypto in the long term. It’s the most volatile market ever existed. It can drive people nuts, but only visionary people with strong willpower will survive in this mayhem. God bless panic sellers and faint-hearted people, bruh, this market is not for you.

Did you buy the peak of 2013? no problem, it made another one in 2017. Now you bought at 20k and crying over your miserable life, no issues it doubled again in 2020. If you really believe in a decentralized society where no one else controlling your money but you, then you’re a true hodler.

Trading Cryptocurrencies

Well, trading in cryptocurrency is tricky, and I won’t suggest you jump into this right away. As trading is slightly different from conventional markets and highly influenced by sentiments, news & events, supply, adoption, unlike other markets where fundamental and technical analysis plays a major role. It might seem a bit confusing initially but believe me, this market offers a plethora of opportunities, only if you have the patience and determination to find any. I will try to enlist some steps that can come in handy in the process.

1. Picking an Exchange: It should have the maximum trading pairs with the highest liquidity. Binance certainly rings a bell in this category. It’s way ahead of its competition. Some of the major trading exchanges:-

  • Binance
  • Bittrex
  • Kucoin
  • Huobi
  • Bitfinex
  • Wazirx-Indian

2. Finding an information source: It’s imperative to have information about the coin before jumping into the buying spree. It really boosts confidence and prevents panic selling in days of a bloodbath. Not necessarily to become a blockchain expert here, but a fundamental knowledge of the premise behind a coin, the need it serves, supply and knowing about its use case would suffice.
Listing some of the major information source:

  • Coinmarketcap: It’s a go-to place for all the crypto information. A website where you can find information on every coin and token available. The data includes market capitalization, supply, trade volume etc. It also shows you the historical data and a link to the official website of the coin. So the site can even be used for cryptocurrency comparisons.
  • Coindesk: One of the significant crypto news source. Cover all news around bitcoin and other cryptocurrencies. Be it events, adoption or a recent rally, coindesk writers will always keep you updated.
  • Coinmarketcal: CoinMarketCal is the leading economic calendar for cryptocurrency news. It covers all events that help crypto traders make better decisions. There are events in a coin life like supply decrease, coin burn, major partnership, product releases that could have an impact on its price action. So, coinmarketcal lists out all such events and allow traders to speculate on price around these events. Kryptocal is another website for the same purpose.
  • Reddit: Without a shadow of a doubt, it’s a great place to find information and hangout with people having mutual investment interest. Every coin has its official subreddits (can find the link from coinmarketcap) where people talk and post about the things happening around the cryptocurrency. Just to let you know, sentiments play a major role in deciding the price for a given cryptocurrency. Positive sentiments alone could take a coin to the MOON. Look what happened to GME and XRP.
  • Twitter: Since the price is highly influenced by the news, Twitter would definitely keep you up to date. All the cryptocurrencies, exchanges and their Founders have Twitter handles where they post about all the major updates, including partnerships, new releases, upgrades, personal opinions and whatnot. Always turn on the notification for the coin you’re trading. No matter what strategy you were building, a single tweet from their founder can change. It’s price action beyond imagination. Doge is the most recent example of this correlation. A single tweet from Elon Musk took the coin price up 50% in minutes.

Now, just a tip- Don’t chase pumps and dumps. They might look fascination by the surface but believe me, it’s a slippery slope. If you entered at the bottom, then it’s well n good. Otherwise, just be a spectator.

 

 

Passive Income

  • Staking
    Staking is the most simple way to earn passive income, as the market pays you for holding cryptocurrencies for a certain period. Let me explain to you a bit. All blockchains have one thing in common: transactions need to get validated. Bitcoin, for example, does this in a process called mining which is known to use a lot of electricity (Proof-of-Work). There are other methods that are used for validation. Proof-of-Stake (PoS) is one such consensus mechanism where people get decision power in the network by staking coins. By staking, you gain the ability to vote and generate an income. It is quite similar to how someone would receive interest for holding money in a bank account or giving it to the bank to invest. There are plenty of coins to stake with a variable rate of interest. Check out- https://www.binance.com/en/pos
  • Airdrops
    This is a cheap or free way to earn money from crypto. The concept of airdrop refers to the
    widespread distribution of cryptocurrency free to the public to gain the userbase. Recently Binance airdropped 100 TWT tokens for all the holders, which is around 50 USD right now. Even the popular coin TRX was given as an airdrop which now worth thousands of USD.
    You can keep track of Airdrops here:- https://airdrops.io/
  • Hardfork
    Hardfork happens on the blockchain. Sometimes it’s hard to put an update on the existing chain due to the lack of consensus. So developers split a totally different chain, and the investor receives equivalent holdings on the new chain. (it’s like benefitting from an error). Ethereum Classic forked from Ethereum. BCH, for example, is the biggest of its kind, which is forked from the Bitcoin and given as free in the same amount to people as per their Bitcoin holdings. They keep happening from time to time and even have a positive impact on price action.
  • Buybacks or coin burn
    It means a cryptocurrency is bought to be destroyed or ‘burnt’ afterwards. It decreases the supply and hence directly increasing the price. Basically, it was brought to adjust with the inflation. BNB coin burn is a classic example.
    Read here- coin burn

So that’s it guys, hope you’ve learned something here and wish you good luck in your crypto pursuit. And feel free to drop any questions or suggestions.

 

 

You can read more articles:
Peer to Peer Investing
Startup Investing and Reviews
Creating Wealth for Self

Spread the love

Leave a Reply

Your email address will not be published. Required fields are marked *

BROUGHT TO YOU BY ALTERNATE INVESTING

We welcome you to contact us for more information
about any of our products or services