Important things you need to know before getting started with Cryptocurrencies...

heigovannik (47)in #cryptocurrencies • 6 years ago (edited)

Hello Hello.

I wanted to make this overview of what you need to know before getting started with cryptocurrencies.

First of all ...

You need to understand that Bitcoin (BTC) is the Godfather for all the other cryptocurrencies which means that in many cases you can buy altcoins (rest of the coins except Bitcoin) only with Bitcoin (BTC) and sometimes even with Ethereum (ETH).

This means that if you enter the market with your USD/EUR etc through an exchange then you probably need to trade it into Bitcoin or Ethereum (ETH seems to be faster and cheaper for transaction fees in this moment of time) and send it to another exchange where is better access to many other coins.

Unless you just want to hold the most common cryptocurrencies, you probably need to make multiple accounts for several exchanges to ensure the best access to coins.

Please understand that this market is big and there are many opportunities. A lot of new players are still entering the market with quite a significant reputable background which means if your timing is right compared to the "general market", you could make some very nice gains.

In this case, many good projects might not be getting listed on the biggest exchanges at first.

A second important thing:

I think is noteworthy to be mentioned is if you have made the decision to buy into something then please compare the prices on the exchanges. In some cases, the difference could be quite significant as many exchanges do not have that much liquidity for all the coins.

I have a personal friend who bought one coin around 10x of the actual price...

But what can you do... lesson learned.

The best way for doing that:

Go to https://coinmarketcap.com
Choose your coin, etc Matrix AI Network (MAN) and click on it.
From the chart review go to "Markets".
Now you should be here:
https://coinmarketcap.com/currencies/matrix-ai-network/#markets
From there you should be able to see all the prices on exchanges.
Just make sure you dont pick up some low volume exchange because the price is just a little bit lower there.

Next important thing:

You need to learn how the economy behind demand and supply works. This is important because many people fall into this psychological trap of "low price". A lot of new players enter the market and think they are "smart" if they buy into coins which just cost a few cents.

Lets bring an example:

The reason why one Bitcoin costs so much is that the circulating supply is quite low compared to many other coins. There is going to be total 21 million Bitcoins (BTC) when everything will be mined, but if we look Ripple (XRP) for example then there is more than 39 billion coins and the price is way lower, but it stands in the top 3 (in this moment) in terms of market capitalization.

So even if Ripple (XRP) had the same market capitalization as Bitcoin (BTC) then the price wouldn't even touch the same levels as Bitcoin is.

Please don't get caught about this low price trap, as it is much more important to check what is the market capitalization and supply of the coin.

This is how you calculate it:

Circulating Supply x Price = Market Capitalization

For example, if all Bitcoin is mined:
Bitcoin (BTC) Price: 100 000$
Circulating supply: 21 000 000 (BTC)
Market Capitalization = ???

21 000 000 (BTC) x 10 000$ = 2 100 000 000 000$
Market Capitalization = 2 100 000 000 000$

And last but definitely not the least - Security:

There are 4 things I would highly suggest for everyone.

1) New encrypted e-mail account.

Set up a new e-mail account exclusively for cryptocurrency exchanges and ICOs.
So far seems to be the best: https://protonmail.com .
Please don't set up your normal personal e-mail as a recovery e-mail.

2) Two-factor authentication for exchanges and ICOs.

Install Google Authenticator to your phone.
Some exchanges have SMS OTP (One Time Password) option.
It is good to use all of the authentication options.

3) Get paid VPN (Virtual Private Network).

This will save you from leaving data on the network.
I have a personal friend, who had Protonmail e-mail and Google Authenticator, but probably got hacked because logged in a Public Wifi Network.
To be honest, I would avoid Public Wifi as much as possible.

4) Get hardware wallet to store your funds

At the moment seems to be the best Ledger Nano S.
Website: https://www.ledgerwallet.com/r/554e
This will get your coins off the exchange and you don't have to worry if your computer gets a malicious attack.

Some of you may be thinking that all these extra layers of security are not required, as you think you will be fine.

We all think that, until we are not ...

When you will be diving more in this space you will realize that there are some hackers moving around. You could come across people and bots in the chat rooms direct messaging you while impersonating themselves as team members of the project. Just make sure you don't send anyone your funds or private key.

In addition, there are fake giveaways mostly on Twitter where they ask you to send a small number of funds first to verify the sender account and then in regards are promising to send bigger amount back.

As well sometimes you could end up on a phishing site. So make sure you are always on the official website when contributing to ICOs or downloading something.

Seems like a hustle?

Indeed it can be :)

Thank you for coming by my friends.

I wish you all the best!

If you are still having doubts about cryptocurrencies and need to find that confidence in this space then check out this last post where I am bringing out some of the stuff what is really going on in this market.

Link: https://steemit.com/tech/@heigovannik/if-you-are-still-having-doubts-about-cryptocurrencies