If you don’t have too much knowledge or you’re not an expert in bitcoin or the way cryptocurrency works, that’s completely okay because I’m going to be going over everything that you need to know to get started today.
In this blog post, we’re going to be going over how to invest in crypto in this year as a beginner.
Towards the very end of the article, I’m gonna be going over exactly how you can score free bitcoin today. You don’t have to pay me, you don’t have to do anything, you just have to read this post till the end and I’ll share with you exactly what you need to do to score that free bitcoin just by reading this article.
How To Invest In Crypto
Lately, the bitcoin market has been absolutely crazy with the release of all these stimulus packages. The dollar getting inflated and a lot more corporations turning into the side of investments in cryptocurrency.
We’re seeing the price go absolutely insane and I’m hearing some real personal success stories in my own life of people I know who are making hundreds of thousands of dollars in cryptocurrency.
I don’t want any of you to miss out because if you have this mentality that oh it is way too late I will not be able to get in there as well. That’s far from the truth. I think we are still in the early stages of the development of cryptocurrency, especially bitcoin.
One of the most important things that you can do is to invest now get started. Okay, let’s start this off by talking about the background of bitcoin what it is and how it all works to break things down.
The easiest way to explain the way cryptocurrency works is this is just a peer-to-peer transaction. If I wanted to send you money I would do it through Venmo or cash app or PayPal.
If I’m trying to Venmo you some money what happens is I have my five dollars and I want you to get it, it doesn’t go straight from me to you, although that’s what we see on our end. The back end of these transactions often entails a third-party company that handles the exchange.
What you have to realize now is that big fintech companies will prioritize other people’s data and sell that for extraordinary amounts of money. This is not an uncommon practice and it’s pretty sad.
A lot of the sensitive information that you would never think of is getting revealed to other companies. It happens daily and this is one of the things that cryptocurrency is here to help alleviate and solve aside from those things we’re not even going to go into the topic of security and the liability that the banks have in trying to have all of our money and the instability of the fiat currency.
All you need to know is that there are a lot of downsides when you are using a primarily peer-to-peer system that relies heavily on different entities outside of our control.
With cryptocurrency or bitcoin you get something called a wallet address. This is pretty much a long series of numbers and alphabets and you pretty much just put that in and that’s where you can send the money.
You don’t ever have to worry about that transaction getting reversed, you don’t have to worry about the transaction getting hacked. The way bitcoin works is secure and it’s pretty awesome.
Just in case I didn’t do a good job of explaining through my analogy on what bitcoin is I’m gonna quote to you the exact print that they have on bitcoin.org so you can have an official better understanding of how this all works. They state on their website bitcoin.org:
“Bitcoin uses peer-to-peer technology to operate with no central authority or banks; managing transactions and the issuing of bitcoins is carried out collectively by the network.
Bitcoin is open-source; its design is public, nobody owns or controls Bitcoin and everyone can take part. Through many of its unique properties, Bitcoin allows exciting uses that could not be covered by any previous payment system.”
They also show three key points:
- Fast peer-to-peer transactions which are very important. In the year we don’t like waiting two to three weeks for that money to come in. We don’t like waiting for two to three business days for that wire transfer to come in.
- Worldwide payment. If I wanted to send my friends in Australia some money, I would either have to wait or pay a large fee and I would not be 100 percent sure if it went through either.
- Bitcoin has low processing fees. You pay just a small fraction of the processing fee that goes towards the people that are mining the data for this transaction to go through.
In addition to that, I wanted to show you another resource that you could all check out. This is literally on the public website bitcoin.org and this is the official white paper of how bitcoin works. The official white paper will show you what bitcoin is and how it was intended to work by Satoshi Nakamoto.
In the first paragraph of the white paper, you will see that this is a summary of how bitcoin was supposed to work and why it exists. The other art pretty much goes into the transaction details: how it works, the hashing, the nodes, it also talks about the timestamp server, the proof of work, and anything related to the back end of why bitcoin right now is an actual successful thing.
If you don’t have a background in computer science or you’re just someone like me and as much as you read the white paper, some of it still doesn’t make sense, I say that’s okay.
You don’t necessarily need to know exactly how the splitting value or how each hash and node works. All you have to know is what bitcoin is and how it performs.
Now that we have a good idea of what bitcoin actually is and how it works, we need to talk about the transaction process and we also need to go over something called the blockchain.
Blockchain itself could be a very confusing topic, but the easiest way to explain this is that it’s just a database.
Personally, I enjoy carrying crypto in my portfolio because I think it’s a cool technology, and while I don’t know if it’s ever gonna become a viable currency. I do think that it certainly has its merits:
- Cryptocurrency can’t be duplicated and this means that you can’t counterfeit cryptocurrencies making it a lot safer than one would think. It’s a number that’s associated with an address, not an actual file. Another thing that makes counterfeiting not possible is blockchain technology. Blockchain is a list of all the transactions that happen so that everyone can see it and as a result nothing is private.
- Another cool thing about cryptocurrencies is that there are a finite number of coins. Therefore you can’t create more. Technically you can mine cryptocurrencies but this is just like finding a hint stash. It already exists but it’s not yet being traded.
- It’s also fully digital. You don’t need to hold coins, gold, cash, or anything like that.
- It’s used worldwide you can trade 24/7.
The goal for cryptocurrencies is to aim for a decentralized economy. This would mean that we wouldn’t need to rely on financial institutions. A lot of people like that point so that’s why there are such crypto fans.
If the government keeps putting more and more cash and causing more and more inflation, then this will definitely push more people towards cryptocurrencies because inflation of cryptocurrencies is not possible.
As I said there are a finite number of coins and the government cannot simply just make more coins and create more supply.
Now, let’s get to how you can buy and sell cryptocurrencies. There are tons of different exchanges that you guys can use. For example Coinbase and Crypto.
Most people are going to go with Coinbase because this is the platform that everyone uses. All beginners use it because it’s just the easiest to use.
Coinbase is both a website as well as an app. You can trade cryptocurrencies on your computer as well as trading on your phone. I’d say that about 99 percent of people that get into cryptocurrencies will use Coinbase at the start.
To create an account, Coinbase is gonna ask you some personal questions about yourself. You’ll have to enter in this personal information as well as give them a picture of your ID, or your driver’s license, but you can also, use your passport.
To transfer real money into your account you’ll use a debit card or your bank account and Cinbase will simply take the money from that account and put it in this Coinbase account. From there on you can use this money to buy cryptocurrencies.
Over 30 million people use Coinbase. It’s an extremely reliable and trusted service and they haven’t had any big hacks so your money is safe with them.
The thing I like about Coinbase is that the interface is extremely easy to use. You can buy all the top cryptocurrencies and for 99% of people that invest in crypto, this is enough.
Once you get more technical and you want to trade between coins and do more complicated things, that’s when you can start focusing on the other exchanges. But for now, just use Coinbase. It’s a great app and it’s the easiest way to get started with crypto.
What Coins Should you Buy?
Here are the top ten cryptocurrencies based on their market capitalization.
- Bitcoin at about 128 billion dollars
- Ethereum 19.4 billion
- Ripple XRP at 8.2 billion dollars and the list goes on
Bitcoin is the king, its market cap is way higher than all the other coins. That’s why most people when they think of cryptocurrencies, they automatically think of Bitcoin and that’s why most people that start off investing in cryptocurrencies will start with Bitcoin as well.
Currently, I own Bitcoin, Ethereum, Ripple, Bitcoin cash as well as Litecoin. If you want to know all the details about each of these coins you’ll have to read its white paper.
The white paper is basically just the PDF guide of the coin project and what the coin is as I mentioned earlier.
Most people won’t read the white papers of any of these coins but if you want to know the
utility of the coin and what then the white paper is the best thing to read. You want to ask yourself, “is this coin bringing any real value”.
It’s extremely complicated. I don’t know what’s going on behind the scenes, but a ton of these coins solve real-world problems. For example. Ethereum took off because it has a lot of real-world use and it’s more advanced than Bitcoin.
Ethereum is an open-source platform for decentralized applications. It’s a whole network with its internet browser, coding language, and payment system. It enables users to create decentralized applications on the Ethereum blockchain.
My advice is to study each coin that you’re interested in to see if it’s something you want to invest in. You can read the white paper, you can look at tons of articles online about what the value is in this coin and sort of why it was made.
Honestly, it’s really hard to know when to buy these coins. You can’t do a fundamental analysis as you can with real-world stocks. These coins aren’t companies with assets, earnings, revenues, financials, and all that stuff that you can analyze.
In terms of when I buy, I just look for big dips since it’s not backed by anything besides the demand and consumer sentiment.
One thing people have been saying which is good for Bitcoin is the halving that happened in May of 2020. This means that the number of bitcoins that someone gets for mining one block went from 12.5 Bitcoin down to 6.25 Bitcoin. This means that mining Bitcoin got twice as hard.
Another thing that’s helping coins such as Bitcoin is the stimulus payments that the government has made. With this big injection and money, a lot of people are scared of the rising
inflation that will occur and as a result lots of people are starting to want to put their money in independent stores of value such as gold and Bitcoin.
You don’t want to get into crypto just due to the fear of missing out. If you buy just because of the fear of missing out, then you can find yourself in the middle of a crypto bubble.
This is what happened at the end of 2017 when the price of Bitcoin went up to about $20,000. I know a lot of people that saw it shoot up in price and they did not want to miss out on this investment opportunity.
As a result, lots of people bought at this all-time high of twenty thousand dollars, and when it went down to ten thousand dollars, they lost a ton of money.
The thing with volatile investments such as Bitcoin, lots of people just sell at the wrong time. They get scared when the price drops in half and they start selling. A lot of people get their emotions involved and that’s just dangerous for investing in something such as crypto.
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How does a transaction occur with bitcoin?
First, a new transaction is entered then the transaction is transmitted to a network of peer-to-peer computers scattered across the world and these are the people who are going to be mining this type of data so that bitcoin transactions can go through.
Next, the network of computers then solves equations to confirm the validity of the transaction. Once confirmed to be legitimate transactions they are clustered together into blocks.
These blocks are then chained together creating a long history of all transactions that are permanent and then the transaction is complete.
If you’ve ever wondered how the term blockchain came about, this is exactly why. One of the most fascinating things about the blockchain is that it is a public ledger as well. This means you can access all of the data and see some pretty interesting information all the way up to the transactions that people are having on a day-to-day basis.
You’ll see the above monster transactions every now and then we we are some pretty small shrimp in the game, but you got to realize that’s how crazy something like this is. People are trading and transferring bitcoins in the hundreds of thousands of dollars every single day if not every single hour.
Hopefully, this has given you a better idea of how bitcoin itself works and how the blockchain operates.
To pretty much glue everything together what you can do is transfer your own money from five dollars into bitcoin.
If you’re still reading this blog post because you’re trying to figure out exactly how to get free bitcoin, let me share with you now what that is.
There are a ton of different companies out there that have created platforms to trade cryptocurrency. Many of these companies are gonna want you to start banking with them because odds are if you deposit your first 10 or 20 dollars with that specific platform, chances are you’re going to be using them for the duration of your cryptocurrency investing time.
Many of these companies are going to offer you some type of incentive to sign up. Coinbase will give you 10 dollars. Crypto.com is going to give you 25 dollars for signing up. What I recommend you to do is sign up for both. There are times when a platform will go down.
This doesn’t just happen in the cryptocurrency world but it also has happened on the stock market with robin hood.
You don’t want to be in a situation where some crazy things are happening in the market. You either want to enter it or take your money out but you can’t because the server or the app itself is down. Make sure you have at least two platforms that you can use just in case that happens. And if you guys wanted to apply for it through the app store without using any special link you’re not gonna get that free welcome bonus associated with it.
With Coinbase you can get free crypto just by signing up you’re gonna get free 10. Crypto.com you’re also gonna be getting free crypto. Whatever crypto you get paid out in you can transfer that automatically into bitcoin and right there you have bitcoin. Pretty awesome.
If you enter the crypto market today and buy bitcoin and hold for at least a couple of years. It doesn’t matter when you go in just at least have a position in case this rides up to a hundred thousand dollars.
Here is how this all works. For you to successfully buy bitcoin today, you don’t have to put five g’s into the market. You could buy ten dollars worth of bitcoin you could buy a hundred dollars worth of bitcoin, whatever you are most comfortable with.
Coinbase is one of the most popular apps to trade on. They are secure and they have funding from investors in silicon valley. I’ve been using them for a very long time as well and many other high-performing cryptocurrency traders use this platform, but they use the pro version.
If you’re kind of like a noob and you’re getting into this, you don’t have to worry about it too much.
That is how Coinbase pro looks like. People who are trading crypto much more diligently. If you download something like Coinbase pro, you do have to pay to use it, but with regular Coinbase it’s free to use. If you do sell something there is that transaction fee.
You can buy crypto for a one-time purchase. You can also do things where you can repeat it through different times of either the day, the week, the month, or even every month
If you want a dollar-cost average that’s one of the features that you can use to continually purchase bitcoin and build your investment portfolio.
You can buy/sell and send/receive crypto. I currently have sold all the ones I had in my account. If you had like a hundred bucks in bitcoin you could sell that and deposit it into your cash account.
Another thing you can do is convert bitcoin into another cryptocurrency. For example, bitcoin to Ethereum for whatever reason. Maybe you think Ethereum is going to pop off more percentage-wise and you want to make that jump. That is something that you can do as well.
Although Coinbase itself can be pretty secure they have a feature where you can activate a new security key and you want to do this for everything that you own that allows you to.
What that means is you got to get a security key like the one below:
And all you have to do is get this physical key and push the button after you decide to put your password in and you try to log in. This is an additional form of security. It’s pretty much like two-factor authentication on your phone except you physically have to push the button.
If a hacker gets all your information, they know your wallet address and they get into your bitcoin, if they do not have the security device above they cannot officially log in.
This is something I highly recommend everyone to get just to make sure that your account is safe. If you want to take an extra layer of precaution you can use something called cold storage.
The ledger nano x is one of the most popular ways to secure your crypto. This pretty much allows you to secure your cryptocurrency off a platform. The reason why you want to do this is that there are a lot of hackers that know the value of bitcoin and they also know how anonymous a lot of these transactions are.
If someone hacks you and steals your bitcoin, you’re not going to get help from the FTC or your insurance company, or any of these banks. Oftentimes, if you lose your bitcoin and it gets hacked it’s gone for good. It’s both the disadvantage and the advantage of using an anonymous peer-to-peer networking system like this.
Once you have your ledger you can plug it into your computer and withdraw some of your cryptos and send them into your cold storage. There is a network fee that you will be paying the people who are mining that transaction. Meaning the ones that are getting the reward for this exchange to happen.
In this process make sure you are not making any typing mistakes. If you make any typo and you somehow accidentally send it to someone else that money’s gone. You’re not going to do anything about it.
Once the crypto is in your cold storage you can do what you want with it. But the best benefit of it is that it’s off the platform, it’s off the network and it’s something that is in your control.
As you can see the ledger is absolutely dope and it’s something that I highly recommend anyone who’s trying to invest in crypto to set up.
That is how you buy bitcoin, receive it and keep it off the platform in a safe manner. This is the full guide on what you need to know in order to invest in bitcoin as a beginner for this year and for years to come.
No matter what time of year you’re reading this article this is still going to be the principle that you need to know that’s not going to change anytime soon.
Don’t forget if you do want to pick up ten dollars worth of free crypto with Coinbase that is the link. If you want to use Crypto get 25 for free. Crypto used to be 50 it was awesome. When that promotion was around I know a lot of people signed up for that.
But I think because crypto is getting even more popular, these companies don’t need to incentivize people with that much money. I can only see these welcome bonus offers going down over time so make sure you sign up for this as soon as possible to get that free crypto and to start investing today.
You don’t need to put a thousand dollars into the market. I don’t recommend you to put your entire life savings into cryptocurrency. It’s very risky if you do that, but I do believe that you should put a small portion of your net worth into cryptocurrency because it is one of the most valuable investments you can make for this year.
One last thing if you did find value in this post don’t forget to share. I appreciate all of you for your time and hopefully, you learned a lot.
In conclusion, you guys we just went over what cryptocurrencies are, what are the top coins that you can buy today, and how you can buy and sell crypto on exchanges such as Coinbase as well as how to analyze a coin to see if it’s something that you believe in and wants to put your money into.
These are all digital assets and they’re extremely volatile. I know a lot of you are new investors and I just don’t want you to risk too much money that you can’t afford to risk. I will continue to hold my crypto because I think it’s a cool technology and I want to be part of something that I think will get big.