I’ve been pretty vocal on Twitter about cryptocurrency. I own some of the stuff, I have fun with it and I get just enough questions from some of you that I figured I’d share all I know about Bitcoin with you today.
Don’t have a seat. This won’t take long.
First things first: I’m not a crypto expert. I have a limited understanding of blockchain and mining and the history of bitcoin and cryptocurrency, but I can’t explain the granular details to you and I’m not going to try. This post is nothing more than my experience buying and selling crypo. Take it for what it’s worth.
What I believe is this:
- Blockchain technology is here to stay, and will have a prominent place in the near future.
- I have no idea if Bitcoin, or any crypto currently in existence, will be a part of that future.
- Money can be made, or lost, very quickly when trading cryptocurrency.
Tales From The Crypto
My first crypto transaction was made on Oct. 6, 2017 when I bought $10.00 worth of Bitcoin, which was selling at that time for $4,390 (today it’s at $8,782). I was curious and wanted to see how the process worked.
It couldn’t have been easier and eventually I bought more. Then I started buying ‘alt coins,’ which are basically any crypto that’s not Bitcoin. Since my first purchase back in October I’ve bought more Bitcoin, Litecoin, Ethereum, Bitcoin Cash, Ripple, and Tron.
How To Buy Bitcoin & Other Cryptocurrency
The process can be complicated if you want to get into buying alt coins, so to keep things simple I’m going to focus on how to buy Bitcoin from Coinbase.
First, you need a digital wallet. Each crypto token you own needs its own wallet. If you buy Bitcoin, you’ll need a Bitcoin wallet. If you buy Ethereum, you’ll need an Ethereum wallet. You get the idea.
The easiest way to create a digital wallet is to create an account on an exchange; Coinbase is the most-well known exchange right now. It’s also by far the easiest to use and their mobile app is super intuitive.
Fund Your Account
Once you’ve set up your Coinbase account you’ll need to connect your checking account or a credit card to it. You’ll use legal tender to buy your digital currency.
As I mentioned earlier, you can buy fractions of crypto – you don’t need to buy whole bitcoin. My first purchase was for $10.00.
Once you click the buy button, you’re locking in your price, but it takes a few days for the crypto to hit your digital wallet. All you can do is wait.
Once the crypto is in your wallet you can do whatever you want with it. You can sell it to someone else. You can leave it alone and hope the price increases. You can trade it for other crypto. You can sell it back to Coinbase for cash. You can even shop with it; Overstock.com has been accepting Bitcoin payment for years.
HODL is a word you’ll see in the crypto world. It comes from a typo on an old Reditt thread. Someone was trying to say that they don’t day trade crypto, that they ‘hold’ it for the long haul, but this person accidentally typed HODL and it stuck.
If you’re going to HODL your crypto like me then I strongly recommend (as does almost everyone else) that you store your crypto in a cold digital wallet.
A hot wallet is what you get on Coinbase or other exchanges and it’s nothing more than a cloud-based digital wallet. Cloud based anything can be hacked.
A cold wallet is when your crypto is stored offline, in a drive. I use the Leger Nano S wallet because it was relatively inexpensive to purchase, was highly rated, is very secure, and was easy to set up.
My Crypto Portfolio
So exactly how much crypto am I hodling? That’s what you really want to know, right? 🙂
Today I own exactly five cyrptocurrencies: Bitcoin (BTC), Ethereum (ETH), Ripple (XRP), Tron (TRX), and Litecoin (LTC). At the time of writing (afternoon of 2/12/18) here’s what I’ve got, and what it’s worth:
I’m no math whiz, but my calculator tells me this crypto portfolio is worth $6,793.04. Not too shabby … except that it cost me exactly $10,271.55 to acquire it.
I’m currently down -$3,478.51, or -33.87% ROI.
The scary part is that I’ve been WAAAY up in crypto and I’ve also been down quite a bit more than where I’m at today. The swings are violent and frequent. I joke that owning crypto is conditioning me to better handle any future stock market corrections.
In case you need it … pic.twitter.com/ZQbV3z2aqY
— I Dream of Fire (@I_Dream_of_Fire) January 19, 2018
I’m sure you know that crypto is risky and volatile. If you’re looking for a simple and safe investment, then you should index and chill. With cryptocurrency, I’ve seen my investment triple and I’ve seen it get cut in half … in about a one month period. It’s not for the faint of heart so if you decide to get yourself some of this fancy schmancy digital currency, don’t spend more on it than you’re prepared to lose. If I lose my ten grand I’ll be sick, but it won’t sink our ship.
Personally I still feel like I’m going to see some nice returns in 2018, but like I said at the beginning of this post, I don’t know squat about crypto. #fingerscrossed
Do you own any crypto? Do you think crypto is an investment (speculative or not?) or is it a complete scam?