Bitcoin, Crypto Starterkit, Cryptocurrencies

How to start with Bitcoin and cryptocurrency

space shuttle taking off

How to start? The cryptocurrency and bitcoin world is still quite overwhelming for newcomers. So here is an easy step-by-step guide why, how and how much to invest.

light bulb

Y tho?

Let’s start with the “why?”

Let me tell you a story I lived through. I am currently building a house with my wife. Or it’s about to start. So, obviously we needed to get a credit from a bank, since a house is pretty expensive (especially in Germany).

building a house

Even if you don’t hate on banks like most people in crypto, going to said banks and beg for money is still a degrading task. But whatever. We had all this set up already.

So the first invoice comes in from the people building the house. Now, business practice is, I send the invoice to the bank and they transfer the money directly to the company.

So they did.

But weeks later, nothing happened and the company building the house asked me where the money was. So I’ve asked the bank. And they told me “we don’t know”.

Now, although I work in IT, it is completely beyond me how they can NOT know where the money went. Apparently, they’ve sent it and it should be there already. But it wasn’t.

So I then could start a “research process” through them to try to track where the money went.

I’m sorry, but what kind of bullshit is that? These banks are moving millions of dollars each day, how the fuck can they not know where the money is?

But apparently, that is the reality. If you’ve build a house or are in the process of doing so, you may know my pain.

In the end, the research didn’t find shit and the money magically appeared a few days later in the recipients account.

The cure

Now, this is obviously some bullshit that banks don’t even know where the money is going, what routes it is taking and whatnot. So cryptocurrencies are here to fix that!

With cryptocurrencies you always know exactly where the money is because it is peer-to-peer. Person to person. No strawmen in between. No weird routes for the money to take. Just sender to recipient. That’s it.

Even with privacy coins, which will be a big thing in 2019, the underlying technology is the same. From A to B. Nothing else. You might not know who sent how much to whom, but you know it works. Instantly.

That’s just one of many more use cases for cryptocurrencies. If you want to know more detail on what else it might be used for or why we still might not pay with Bitcoin in the future, check this out – how is Bitcoin the future of money?

Let’s get it on

let's get it on

If that convinced you, the question of “how?” still stands. This technology is still – even ten years after its first introduction – very new. So the user interfaces and usability are still a bit off.

In another Blogpost, I tell you how to start into Bitcoin without ANY money. In there I already mention the easiest exchange to buy Bitcoin from, Coinbase.com. But before you jump in, either read the Blog post I just mentioned or sign up via this link: https://digi.bouncycastle.io/coinbase

You need to sign up on a cryptocurrency exchange which trades cryptocurrencies versus your good old fiat money like the US Dollar. “Fiat” is the term for government regulated money. Basically, the money we use these days. USD, EUR, JPY, it’s all “fiat money”.

On said exchanges, you can use either your credit card or connect your bank account to load money onto them. If you’ve done that, you can easily exchange your USD for Bitcoin.

Full Bitcoins

Now with Bitcoin being already in the thousands price wise, you might find yourself asking if you actually need to spend 6.000 USD to even get into the cryptocurrency-space. 

The short answer is, no.

I’ll give the long answer in the last part when we talk about “how much?” but for now, just realize: you can buy parts of one Bitcoin.

Missed the train

Don’t think you’ve missed the train because Bitcoin is already worth six grand and that’s the minimum amount you have to invest.

bitcoin train coming in hot

As I stated before you can buy parts of a Bitcoin. To be precise, down to 8 digits behind the comma. Which makes it possible to buy 0,00000001 Bitcoin.

The digits behind the comma are called “satoshis” named after the genius who invented Bitcoin, called Satoshi Nakamoto.

If you decide to buy Bitcoin worth of $100 right now, you would get around 0,016 Bitcoin or 01600000 satoshis. Sometimes shortened as “sats”.

I’ll wait another month

Technically, waiting isn’t a bad decision in this market. Depending on where we currently are in the market cycles. This is a whole topic on its own. If you are interested in bull markets and bear trends, check out my blog post about market cycles.

I bring this up since a lot of people always have this thought: “I don’t have the money right now, gonna save up a bit and invest then.

Yeah, no, you won’t.

There is always a reason to NOT invest in anything really. If you’re working a standard 9-5 job like most people, there’s rarely a time where you just have money lying around which you can invest. That’s why you have to do it differently.

Just take a small amount of money and invest it each month. For example 100 bucks a month. Or even $50. Take that off at the beginning of each month and put it into cryptocurrencies.

money and time make more money

That way, your portfolio slowly rises but you don’t need a big amount of cash upfront. Also, you can balance out crashes and market cycles.

This is also the standard way for private investors in equities, using the so-called ETF’s. Except it works automated. The system moves a pre-defined amount of money off the bank account each month and puts it into the stocks or equities you’ve chosen.

And if you check back after years, the invested money will most likely have been grown a lot.

Sadly, there aren’t any ETF’s for Bitcoin yet. Because that would certainly make it easier. But, salvation is at hand since several big investment companies are already trying to get Bitcoin ETF’s approved by the SEC.

We don’t know if that will happen anytime soon or how. The first ETF which might be accepted has a minimum investment of 25 BTC. That’s… not for everybody. But you can do it yourself.

Bonus question: what?

What to buy is a good question as well. Because there isn’t just Bitcoin. There are a lot like really A LOT of other cryptocurrencies you could potentially buy.

Not so much buy directly with your USD, but a lot you can trade against Bitcoin. This takes us too far for this Blogpost though. As a beginner, I would urge you to stick to Bitcoin at first, watch it and learn the market.

However, altcoins are the easiest way to make money in this market. Or rather, to make more Bitcoin out of them.

But it depends on what kind of guy or girl you are. Because you need to stick to your plan. To learn, which types there are and how they make money, check out the 3 archetypes of cryptoinvestors.

And if you need more basic knowledge about Bitcoin & crypto. Or want to know if the myths around it are true or not, and especially if you want a basic battle plan on how to invest properly, get The Bitcoin Saga: Tales from 1001 Blocks. My ultimate beginner’s book for Bitcoin.

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