As we head towards the close of 2019, Rohit and I recently sat down to discuss the year that has been for cryptocurrencies and what it has meant for the industry in general. A major trend this year has been the emergence of new financing avenues through DeFi (Decentralized Finance), and regulatory interest in Stablecoins and government-backed CBDCs (Central Bank Digital Currencies). Consequently, it has led to an influx of new participants (both individuals and institutions) making their first plunge into crypto.
10 months back, we had written about “Top 5 Cryptocurrency Portfolio Trackers for Everyday Use”. That article was targeted towards crypto experts, traders, and generally anyone who knew their way around cryptocurrencies. As crypto novices make their way into this exciting new realm, the time is right to make a quick list of crypto asset management tools to help them navigate the cryptoverse. Right from buying to trading to accounting to HODLing (not a typo; more on that later) to spending crypto – we’ve got it all covered in the next few paragraphs. We will explain each stage with a commonly used platform/tool for that activity. So here’s a list of the 5 must have cryptocurrency asset management tools that we think would be best suited for your everyday use:
Hello there, fellow traveler. Welcome aboard this crypto journey. You’re going to have a whale of a time. Now the first thing that you need to get started is obviously cryptocurrency assets themselves; preferably those in the top 10 by market cap. The major cryptocurrencies (Bitcoin, Ethereum and XRP) are considered as stores of value, sometimes as a medium of payment and often as a trading currency for purchasing other crypto assets from exchanges. So how do you get your hands on them? One way is to convince any of your crypto-savvy friends to gift or lend you a part of their stash. For the less fortunate, there’s always the option of purchasing crypto through fiat currency from an exchange.
There are multiple exchanges operating today which allow you to purchase crypto using fiat with your credit or debit card. For our article, we chose Coinbase – the world’s largest Bitcoin broker. Anyone who has spent a bit of time in the cryptosphere would be familiar with this name. Coinbase has been operating since 2012, and is backed by reputable investors. They offer their services to users in over 100 countries. Most importantly, Coinbase has a strict adherence policy to KYC/AML laws in the jurisdictions in which they operate, thereby keeping customers always on the right side of regulations. Users have to verify their identity documents first before they can purchase crypto on Coinbase’s platform.
You can access Coinbase either through their website, or their Android/iOS app. Coinbase lets you both buy and sell the supported digital currencies. The exchange provides you with blockchain wallets to hold the crypto purchased through their platform, till the time you decide to transfer them out. Do keep in mind that you do not own the private keys of these wallets. Hence, however highly we might think of Coinbase, keeping your funds under your control is always the wisest thing to do. We will explain more about it in points 2 and 4.
Their platform is easy to use, specifically for first-time users. Coinbase provides fiat currency wallets as well, which allow you to store funds (such as USD, EUR and GBP) in your Coinbase account. Money can be deposited to or withdrawn from this fiat account through your bank account or through a wire transfer. Users can purchase crypto through their linked fiat account or directly through a debit card. When making a sell, the money gets deposited in the fiat account. Unfortunately, purchase of crypto through credit cards is being discouraged now – new credit cards can no longer be linked to user accounts, as some card issuers are blocking cryptocurrency purchases. Moreover, purchases made through bank transfers might take as many as 5 days to be processed.
Coinbase doesn’t show any fancy price action chart, offer any crypto-crypto trading or display any sort of order book. Its main purpose is to serve as fiat-to-crypto on and off ramps and provide wallet services. For advanced users who want to try out crypto trading, there’s Coinbase Pro (formerly GDAX). With Coinbase Pro, you get access to a sophisticated crypto trading platform, along with all the conventional analysis tools that are available in all major crypto exchanges. The platforms are free to sign up and use but both Coinbase and Coinbase Pro charge various fees for transactions.
So you have purchased your first cryptocurrency. Congratulations! Now all you need is a place to keep them and move them around safely. Remember, as we keep on telling, exchange accounts are no place for holding your crypto unless you want to engage in regular trading. Having your own wallets, whose private keys are known to you and you alone, is as safe it can get.
Different coins and tokens might require different wallets. As your crypto portfolio grows, maintaining separate wallets for each blockchain will become a headache. This is one reason why many investors decide to leave their tokens on exchange wallets. Moreover, projects launching their own chains do not help either. Wallets that support multiple blockchains are a welcome relief here. Hot wallets let you carry your crypto funds with you wherever you travel since they are always online. This makes it convenient to make crypto payments and transfers securely on the go, even more so when it is a mobile wallet.
There are quite a few which do a decent job. For this article, we will cover Trust. Trust Wallet supports a wide range of cryptocurrencies, including almost all the popular ones (NEO, ADA and Monero being notable exceptions). You can create multiple wallet portfolios, or import any of your existing blockchain wallets for the supported assets (provided you know the private key, of course). Each portfolio created in Trust comes with its own recovery phrase. So you can easily log into the wallets from any mobile device.
For sending assets to a different address, you can just copy the QR code of the destination address using your phone’s camera app. Similarly, for receiving assets, you can provide the QR code that shows up on your Trust Wallet screen to the sender. Trust has also started supporting Ethereum Name Service domain names very recently. You can simply enter, say, “abhijoysarkar.eth” instead of a long address to send Ethereum or tokens. As for security, the private keys are stored locally within the device, which makes it almost as safe as a hardware wallet. Trust also has a built-in Web 3.0 browser that lets you to interact with various DApps (Decentralized Apps). One of these DApps is Trust Staking Platform, through which you can stake your coins through the app and earn staking rewards. Staking lets you earn interest on deposits, similar to an interest-bearing savings or checking account in your bank.
Trust is the official cryptocurrency wallet of Binance, one of the leading crypto exchanges in the world today. You can also connect your Trust wallet to Binance’s Dex (using the WalletConnect QR code), and trade your assets on the Dex (Decentralised Exchange). Moreover, Trust has recently integrated with Kyber Network Protocol and released a Multi-DEX trading feature. Through the ‘DEX’ tab, you can access and trade on multiple Binance and Ethereum DEX’es from the app itself. The ‘Exchange’ feature allows you to see the Binance DEX order book and place orders there, while the ‘Swap’ feature lets you to swap between cryptocurrencies instantly. Currently, you can swap between tokens on the same blockchain; cross-chain swapping (Eg. an ERC20 i.e. Ethereum token for a BEP2 i.e. a Binance chain token) isn’t allowed yet. The Swap feature is very useful when you need to make a payment using a certain token which is not present within your funds. Trust wallet is entirely free to use and charges no fees anywhere.
Now that you have a taste of crypto trading, you’ll need a platform to manage your books of accounts. For starters, MS Excel works just fine. But if you open accounts in multiple exchanges, keeping track of all of them will become tricky. Add to this your hot wallets (such as Trust and Metamask), paper wallets and hardware wallets (more on that later), and keeping comprehensive records for accounting could simply become impossible.
Crypto portfolio management apps are available a dime a dozen and we have already covered the top 5 such platforms in our previous article. This time we were looking for something that went beyond just organizing your assets. In this article, we will cover Blox – a cryptocurrency tracking, management and accounting platform. Additionally, it also helps in auditing and filing taxes. It is a cryptocurrency portfolio management tool and more.
Blox lets you sync both your exchange accounts and blockchain wallets into a single platform. Users can access their accounts through the website or the Android/iOS app. Their API supports all major blockchains and popular exchanges. While most other portfolio tracking apps provide exchange sync features, it’s rare to come across one which lets you sync your wallets too. For example, if you have created an Ethereum wallet using Trust, you can track all its transactions through your Blox account. All you need to do is scan the QR code of the Trust wallet through your Blox app, and the account gets linked automatically. This feature is especially useful for people who prefer keeping private keys of their wallets under their own control. Users are also provided the option to add transactions manually.
With Blox, you can create multiple portfolios for more effective tracking and accounting. The user interface is clean, simple and intuitive. The app dashboard provides an overview of transactions and asset details over linked accounts and wallets. It also displays simple but useful portfolio analytics, such as how the portfolio value has changed with time and how much each asset contributes to the complete portfolio. You can also keep track of the price movement of your favorite coins through the ‘Explore’ section, which provides constant updates from the crypto markets. Distributed teams can use the collaboration functionality to work on common portfolios. One feature that Blox might consider adding is issuing price alerts when the price of a selected coin crosses a user-defined threshold.
As already mentioned, Blox also helps in easing the tax filing process. It has one of the first automated crypto cost basis tools in the industry. Crypto cost basis calculations help determine profit (and loss) and thereby simplify finding taxable income (if any). Other features such as transactions tables, address books and downloadable transaction history in the form of .csv reports (which can be synced with general ledger platforms like Quickbooks) go a long way in helping file accurate tax returns. With the IRS still working out crypto tax regulations, it is important for individuals to keep track of each asset and every transaction, in order to be able to make necessary declarations when the time comes. Blox has custom solutions for individual investors and enterprises. Individual investors (with portfolio value less than USD 50,000) can avail of the free Pro Plan, which provides all the features the app has to offer except the advanced ones such as cost basis accounting. Paid plans start at USD 99/month. A unique feature here is that users can stake Blox’s native token (CDT) and avail benefits on all plans (higher storage limit on free plan, ~75% discount on paid plans).
Having learnt how to buy, trade and account for your crypto assets, the logical next step would be finding a secure vault to store some of your prized possessions for a long time i.e. HODLing*. Cold wallets serve this purpose since they are offline and hence insulated from unsecure networks. A cold wallet can be any platform that is not connected to the internet. It could be a paper wallet, an air-gapped PC, a USB stick, or the most convenient of the lot, a hardware wallet.
There are several hardware wallets available in the market. In this article, we will talk about Ledger. More specifically, the Ledger Nano S model, since it is the easiest one to get started with and the most affordable one from the Ledger stable. Ledger is an authority in the hardware cryptocurrency wallet space with several products on offer. The Nano S is the entry level wallet and has all the features required to securely store your crypto.
It is a pen drive-like device which comes with a connector cable and sheets to write down your recovery phrase (to be stored in a safe place). Starting up is easy and the device has 2 buttons and an OLED screen to guide you along the steps. You can interact with the device from your PC using the Ledger Live application, which provides more comprehensive information and controls than the device screen which is used mostly for signing transactions and confirming private keys, addresses and pass phrases. Ledger Live supports thousands of cryptocurrencies for easy transactions. Moreover, the device can be synced with almost all popular third party platforms (viz. MyEtherWallet, Metamask, Binance Dex etc.) to transact with those cryptos which are not supported on Ledger Live.
To interact with coins/tokens from a particular blockchain, the Nano S needs to have the corresponding wallet app installed (through Ledger Live). The device can, at any point, support only a handful of apps. But this does not put a limit on how many cryptocurrencies can be stored on it because deleting/installing an app does not affect the crypto held in your wallet or on Ledger Live. As long as you do not lose your recovery phrase, your crypto assets are safe. Even if your device is lost or reset, you will still be able to access your portfolio assets with your recovery phrase. Advanced users can also set up a secret passphrase which lets you access more wallets with an additional layer of security in your device. The security of these devices is central to the fact that the private keys do not ever leave the devices and are always held within a secure element inside them. Users simply sign/confirm transactions using the buttons on the device without ever having to type or enter the keys anywhere.
The Nano S is the cheapest product from Ledger at ~USD 60. It is recommended to buy the device directly from their site or from authorized resellers. Ledger also offers a higher-end device for advanced users called Nano X which is priced at ~USD 120. Nano X can store up to 100 wallet apps and can be connected to the Ledger Live mobile app with Bluetooth. However, Bluetooth sync isn’t possible with the PC version of Ledger Live. The Nano S in all its simplicity serves all the requirements of a full-fledged hardware wallet including a potential “wrench attack” through the secret passphrase which provides a plausible deniability route of escape should it occur.
*If you are wondering whether HODLing is a typo, it is not. It is an expression to denote holding cryptos as a strategy. The origin of the word comes from a typo in a Bitcointalk post from 2013.
You have now come a long way from being a crypto beginner. Where do we go from here? The next phase in the adoption cycle of cryptocurrencies will happen when they start to become spendable. This has already
begun. A key driver of this transformation is crypto debit cards. These cards allow you to spend crypto from your wallet just like you would spend fiat currencies for purchases or payments. When a merchant does not accept cryptocurrencies as a form of payment, most card platforms have backend integrations that allow you to still expense your crypto while the merchant at the receiving end would receive fiat.
Out of all the platforms available right now, we will be covering 2gether in this article. Currently live in 19 Eurozone countries, 2gether has an Android and iOS app along with a Visa card that works like normal debit cards when making transactions. The app allows you to manage (deposit/store/transfer) your crypto and fiat currency funds, while the card allows you to spend them at will. 2gether currently supports Euro and all major cryptocurrencies including Bitcoin, Ethereum, Ripple and DAI to name a few.
Signing up to the platform takes a few minutes and requires you to submit KYC details for verification. There’s a one-time issuance fee of EUR 10 to activate your account for full access. This issuance fee gets you 200 2GT tokens on the app, the card (which will be mailed to your address) and lifetime membership on the platform. 2GT is the native cryptocurrency of 2gether.
2gether can be used anywhere that accepts Visa cards. The app also allows you to send funds to friends. The platform comes with no markup fees for purchasing or selling crypto. Moreover, since only the top cryptos are supported on it, the spreads between buy/sell prices are minimal. There’s a minimum deposit limit of EUR 10 with no such minimum limit for cryptocurrencies. And a maximum deposit limit of EUR 30,000 per month or EUR 150,000 per year (in fiat + crypto). Some of the planned features in the platform include the ability to manage multiple bank accounts and future liquidity predictor.
2gether is a completely feeless Visa debit card with no usage charges anywhere except for the one-time issuance fee of EUR 10 i.e. no monthly/ATM/transaction/maintenance fees. According to the company, 2gether doesn't profit from its users but rather from it financial product supply partners. The platform in turn "shares a large percentage of its revenues with users, based on their individual contribution" thereby making it a collaborative business model. Cashbacks on the platform are in the form of 2GT rewards. There are limits on ATM withdrawals (EUR 300 per day/3,000 per month/36,000 per year) and card payments (EUR 2,500 per day/15,000 per month/180,000 per year).
And with buying crypto using your crypto debit card, you have come full circle. You are now an expert who can find your way around the cryptosphere with ease. Congratulations! And if at any point you end up getting stuck, come say Hi to us on Telegram.
About the authors:
Rohit Chatterjee is an Analog Design Engineer working at Texas Instruments. Abhijoy Sarkar is a banker-turned-entrepreneur. They are high school friends who lost contact years ago. They reunited over crypto in early 2018 and have been investing through mutual research and shared knowledge.