Cryptocurrencies for beginners: Part 2

November 1st 2017
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@nicholasbeairdNicholas A. Beaird

Smart Resources for your Crypto journey — The Foundation

Also fee free to use this Sign Up referall link to receive $10 free crypto on Coinbase with the purchase of $100 or more https://www.coinbase.com/join/59da6d8a6cbf29011559841e )

In Part 1 we discussed the need to build a strong foundation of understanding before diving head first into the cryptocurrency space and that we can do this through literature, classes, and following the latest news and industry leaders. Again, this is not the only way or necessarily the best way, but you’ll want to understand the origins and the fundamentals around blockchain technology before you invest time, energy and money into Bitcoin or any other alt-coins. In Part 2 we will be discussing where to acquire cryptocurrency, where to store it and how to do so safely, as well as a summary of the top exchanges and how they function. For anyone new in this space, if you haven’t had a chance to read through Part 1, I recommend you do so.

First things first, what are digital wallets and how do we use them? Wallets are either hot or cold. Hot meaning they are in some shape or form connected to the internet. Although this doesn’t necessarily make them unsafe, it does not make them as safe as cold wallets, wallets that are kept offline. There are different types of digital wallets: Mobile Wallets, Desktop Wallets, Online Web Wallets, and Hardware Wallets. Your digital wallet is where you will store all of your cryptocurrencies. Think of this as your bank account minus some big financial institution being the creator of that storage with the ability to freeze or access your account at any given time. When creating a digital wallet, the majority will provide you with a private key, or 12-word phrase, and also your public keys. Your private key, 12-word phrase, or KEYSTORE / JSON file are NEVER TO BE SHARED WITH ANYONE. Don’t keep them on a stored note inside of your iPhone, or text yourself a reminder in case you forget. Just write them down or print them out and lock them away in a safety deposit box or somewhere of equal security. I cannot stress to you enough to the importance of taking this part seriously. What happens with fiat currency when we lose our login information? Let’s say we bank with J.P. Morgan Chase since Jamie Dimon is a massive fan of cryptocurrency. We try to log in and completely forget what our credentials are, so we click the Forgot Password? And shortly after have a new one emailed to us. This scenario doesn’t happen in the crypto world. There are no features for this, and if you lose your private keys or phrases, then you lose your wallet and anything that is inside of it. You will need that private key or those exact 12 words in the correct order to recover any lost wallets. Your public, and private, addresses will look strange to you at first if you have never opened a digital wallet. I will insert one of my public Bitcoin addresses as an example (Or in case you want to send me some Bitcoin, either way) 1KoVaU4T71D2J7R8DgcMX9tj6omQr3Wbpr. Think of this almost as a bank account number accept it will change everytime a transaction takes place. If you are going to send money to someone else, or transfer your Bitcoin from one wallet to another, you will need the public address. I will touch on the four types of wallets mentioned above but specifically the most user-friendly wallets for beginners. Let’s start with mobile wallets since almost everyone has a smartphone these days.

Mobile Wallets

Screenshots from the Apple iOS App Store

Coinbase

If you are new to cryptocurrency, this is probably the first place to visit in my opinion. Coinbase is a great place to start, and although Coinbase wasn’t always considered a wallet and many advised against holding currencies there, this is slowly changing as Coinbse has implemented new features and improved upon their original foundations. It is beyond user-friendly inside of the app as well as the website. As of June 2016, Coinbase has even partnered with PayPal to integrate features for more comfortable purchasing and selling. When setting up an account, they will want to verify your debit/credit card, or bank account, by charging a small amount and asking you to specify the exact amount. This charge is usually around a dollar or two which later falls off and gets refunded. Upon starting you will be able to buy instantly with your debit or credit card in exchange for higher fees, or through a bank account ACH withdraws that takes a few days but lessens the fee percentage. For anyone new to cryptocurrency, uploading your bank account information is highly sacrilegious, but I can assure you this is one of the safest exchanges out there. Coinbase even insures your wallets should someone hack into your account and steal your currency. As with most products these days, the more you purchase digital currency through Coinbase the higher your card and bank limits will be. Something to consider when buying bitcoin and alt-coins is your wallets compatibility. Some wallets store Bitcoin only and other store Bitcoin and ERC20 tokens (Tokens built on the Ethereum Network). Don’t assume that just because you are interested in that particular cryptocurrency that any wallet you are using can store that token. For instance, Coinbase only has wallets for Bitcoin (BTC), Ethereum (ETH), and Litecoin (LTC). (Follow the Link to receive $10.00 worth of free crypto when signing up with the Following Link )

Bread

Bread was the first mobile wallet I downloaded, and it is also where I made one of my first bitcoin transactions. Bread is exceptionally user-friendly and if you are attracted to beautifully simplistic applications than this one if for you. Bread is partnered with a Bitcoin exchange called Glidera where Bitcoin can be purchased inside of the app. Glidera offers one of the lowest fees I have seen for Bitcoin exchanges at 1% + 0.50 for each transaction. Similar to Coinbase, Glidera will ask for some of your information and may even require a photo of your driver’s license upon transacting more substantial amounts. Also similar to Coinbase, weekly limits and purchase amounts will increase the more you use Bread. When it comes to options for purchasing cryptocurrencies though, Bread only lets you buy and store Bitcoin, not Ethereum or any other cryptocurrency. Also, when it comes time for the actual transaction, Bread only accepts bank account information for ACH withdraws as oppose to instant debit or credit transactions offered at Coinbase. If you are looking to stick with Bitcoin, want a simple eye-catching app, as well as low fees than Bread is a fantastic option. (Update 11/12/17 Bread plans for future Ethereum management as well as their token, article here)

Blockchain

Like Coinbase, Blockchain offers a mobile wallet, as well as a web wallet via their website. As of recently, Blockchain has officially updated their platform to carry Ethereum as well as Bitcoin. The blockchain is known as one of the safest mobile wallets because of their vast experience being leading pioneers in the industry of working with digital assets and the blockchain. You cannot go wrong downloading and using the Blockchain app as it will provide a safe and straightforward way to store Bitcoin and Ethereum, however, digital currencies cannot be purchased from within the app or website, only stored. If you are looking to purchase Bitcoin somewhere and keep it on a separate wallet without moving it for a while, Blockchain may be the place for you. HODL, do it.

Desktop Wallets

Screenshots from the Exodus Website

Exodus

Exodus is highly touted as one of the best wallets around and for many reasons but let’s start with the user interface. The overall design screams simplistic minimalism, and this makes it an oasis for beginners. Upon opening Exodus, you will see your portfolio with each asset you own a colorful ring displaying your diversification and account value. Not only is this wallet easy to navigate but you can exchange currencies within the wallet itself for any of the supported coins. This feature makes it easy to swap currencies without sending currencies to an online exchange only to occur more fees. Lastly, Exodus has killer customer service. Every time I have emailed their support I receive a prompt and thorough response, another necessity for anyone starting at ground zero. From customer service to their support videos, Exodus is a highly recommended desktop wallet for beginners. Below are the current currencies that you can hold on Exodus as of writing this article (11/05/17). You can download Exodus here.

Exodus is currently compatible with the following tokens: Aragon (ANT), Augur (REP), Basic Attention Token (BAT), Bitcoin (BTC), Bitcoin Cash (BCH), Civic (CVC), Dash, Decred (DCR), DistrictOx (DNT), EOS, ETH Classic (ETC), Ethereum (ETH), FunFair (FUN), Gnosis (GNO), Golem (GNT), Litecoin (LTC), OmiseGo (OMG), and Salt. This list will only be expanded upon as Exodus has released a promising roadmap for their platform which can be found here.

Mist

Example: Mist Wallet Dashboard
Example: Sending Ether / Tokens on Mist

Mist is another desktop wallet with a clean user interface, as well as other functionalities built in such as writing and using smart contracts. Mist is the official Etherum wallet that can be downloaded on their page at ethereum.org. Similar to some of the online Web Wallets Mist will also have you back up and secure Keystore files that can be taken offline at any time. For beginners, you will not be overloaded with the programming language or rocket science looking platforms for creating and using your wallet. You will be able to add different accounts at any time and sending Ether, or any ethereum based token is secure and straightforward. A note for beginners, Mist does not allow you to store Bitcoin. This wallet will be for ether, or ethereum based tokens, only.

Web Wallets

MyEtherWallet

Screenshot of Wallet Info

My Ether Wallet is a popular choice for web wallets and simple enough for the average beginner. A new wallet can be created by clicking the New Wallet tab on the websites landing page. This only takes a minute or two, and you will be given your private key, with an option to print it out, as well as the Keystore File that we mentioned above when discussing Mist. A Keystore File is essentially your key in a file form. When logging in you will need to upload that file, as well as type in a password that you have created. A nice feature to keep your wallet safe and secure so long as you keep your files and your computer secure. Sending tokens via My Ether Wallet will require GAS but is simple and straightforward as well.

Something else that I found helpful in my crypto adolescence before I fully understood ERC20 Tokens and the Ethereum network, and the difference between them and Bitcoin, was where to store which currency. My Ether Wallet helps with any uncertainty or doubt by listing the tokens and balances which they allow in their wallet. I took three screenshots, but the list extends far beyond the ones shown in these photos.

MetaMask

I have enjoyed MetaMask as well for another straightforward wallet. Meta Mask partnered with the Brave web browser, as well as Google Chrome, and released a shortcut extension in the browser for easy wallet access. In the top right corner, you will see the MetaMask fox where you can click the icon and enter your wallet for quick functionality. If you have never heard of the Brave web browser, this may also be an opportunity for you to check that project out. It was created by the Basic Attention Token BAT team, specifically Brendan Eich, the creator of JavaScript. As with Mist, MetaMask can be used as a wallet but it is also so much more, and I don’t want to take that away from them. They provide a video and more information on their website, but in summary “MetaMask is a bridge that allows you to visit the distributed web of tomorrow in your browser today. It allows you to run Ethereum dApps right in your browser without running a full Ethereum node.”.

Mobile Tickers and Exchanges

As with all of my reviews and recommendations from personal experience, they are not the all governing decisions on which wallets or applications are the best. I have listed the three currency monitors that I use because of their simple features which are a big deal for me if you have not already picked up on that fact. Coin Ticker and Coin Market Cap allow you to build portfolios and add in the tokens you currently have which are an added feature I enjoy. Coin Ticker also offers additional value by providing monthly or yearly subscriptions for an upgraded portfolio. These can be checked at any time to see what the current value is as the market fluctuates. This is a plus for anyone using a desktop wallet or a hardware wallet who cannot check the current values while out having coffee with a colleague or in the middle of a meeting at work. Crypton does not offer much flexibility at the moment for listing your preferred coins or building a portfolio but over-delivers in its simplistic approach to telling you what the current prices are in a appealing manner. I have seen a handful of other tickers, some of which I have used, that are fantastic and may offer different value to you than they did to me, and with Godspeed, I suggest you check them out and let me know what you think down below.

Online Exchanges

Aside from Coinbase which we discussed above, I will provide three popular options for online exchanges where you can acquire and sell other alt-coins apart from Bitcoin. Bittrex, Bitfinex, and Poloniex are my go-to for exchanges, as well as looking at current prices and dissecting price analysis on a more in-depth scale. Although I don’t recommend starting here, you will eventually end up on exchanges if you continue forward and knowing your way around them is extremely important. In the future, I may dissect these exchanges in detail so that beginners can feel comfortable knowing how to upload and exchange currencies. In summary, you will need to create accounts at each of these exchanges in which you will have access to accepting any alt-coin which the exchange recognizes. You can even buy or sell at bid prices or just do so at the current market price or last exchanged price. Update as of 01/01/218, Blockfolio, and Ether Delta are hands down the best mobile app portfolio’s

In Conclusion

As always, I hope that I have provided some direction for the cryptocurrency beginner. My goal is to help newcomers understand the bare minimum in an understandable light. As for myself and everyone else who jumps into this space you will inevitably learn more about your journey and connect all of the dots along the way. I cannot advise you where to buy your cryptocurrency or where to store it, but hopefully, after this article, you’ll have a good idea or at least know where to start. Although some people who are OCD like myself choose to keep all of their cryptocurrency in one space, there are a ton of benefits to doing the opposite. With most things in life personal experience will need to be a big sliver of the pie for growth and from here I hope you continue to do so. Thank you for reading Part 1 and Part 2 of this cryptocurrency journey for beginners. Please leave your comments and opinions down below and let me know what you thought. If yourself or anyone you know may be thinking about jumping into this space send them to these articles for the fundamentals 101 and where to acquire and store their cryptocurrency! Also, make sure to give me a clap and a follow if you enjoyed this content!

Also fee free to use this Sign Up referall link to receive $10 free crypto on Coinbase with the purchase of $100 or more https://www.coinbase.com/join/59da6d8a6cbf29011559841e )

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