The Bitcoin and Cryptocurrency Buyers Guide pdf pdf
The Bitcoin and Cryptocurrency Buyers Guide By Matt Cossey
Updated May 30, 2018 Copyright 2018 Matt Cossey - All rights reserved.
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Chapter 1 Introduction Welcome to the Cryptocurrency Buyers Guide. With this guide my goal is to help
you get started buying digital currencies such as Bitcoin, in as little time as possible.
When I first got into Cryptocurrencies 3 years ago, I wished there had of been a guide just like this one. It would’ve saved me a ton of time plus I could have been another one of the many ‘Bitcoin Millionaires’. The key words there.. ‘Could have been’.. It’s quite a sad and embarrassing story actually.. It was back in late 2017 and by this time I’d already been using Cryptocurrencies for 3 years. It was what I had found my drawer though, that had me shocked. I couldn't believe my eyes when I found them.. Just sitting there pushed up against the back of my bedside table drawer.
If only I could turn back time. Could this have been the biggest mistake of my life? Images of being in Bora Bora sipping cocktails on the beach flashed through my mind. Then fading back to reality. Staring at these two small pieces of paper.
Imagining what could have been. Two Bitcoin paper wallets. One for me and one for a friend. With one problem. Both had ZERO Bitcoin on them.
I'd created them back in 2013 for storing 100 Bitcoin.. Which would have cost me around $10,000 at the time. It never happened. I’d become so overwhelmed with the whole buying process and how to do everything correctly. Which buyer to use? What if I'm scammed? What if I do something wrong and loose the Bitcoin? These were just some of the questions on my mind at the time.
A few days later I completely forgot about Cryptocurrencies altogether. So In my drawer the Bitcoin wallets lay.. entirely empty.
In the meantime the price of Bitcoin skyrocketed to around 100 times its value back in 2013. In late 2017 I found them, with the frustration of what could have been. Those two pieces of paper would be worth more than a million dollars today.
Cryptocurrency can be confusing. I know all too well. Just look how much that had cost me. I also discovered that it can be disastrous. There's scammers and some very costly mistakes you can make if you don't know what you're doing. Anyway, I hope this guide can help you overcome some of those hurdles. Having worked at Apple, a background in IT and teaching on the side, it was inevitable that I would end up here - Teaching fine folks just like yourself all things 'Crypto'. And to be honest this has kinda saved my life. I almost had to get a double lock on my door just to keep out my friends with all their cryptocurrency questions! True story..
Now I just say "Take my training.." Phew.. that saved me a lot..
In this I'm going to give you the low-down on cryptocurrencies, the
Buyers Guide blockchain and even get you buying your very first coins.
There’s never been a better time to get involved in Cryptocurrencies and as the prices of many coins go up, there’s also money to be made. This guide though is focused on simply getting you started with buying your first coins and is not considered financial advice.
The days are still young for digital currencies. Crypto hasn't even reached the masses yet. If you sit on the fence and miss being an early adopter though, truth be told.. You're gonna miss out. I hope you find this guide helpful on your journey into the wonderful world of Cryptocurrencies!
Chapter 2 What is Cryptocurrency? The age of Cryptocurrencies is here, with Bitcoin being the first of this new breed
of digital currencies, designed back in 2009. But what exactly is a Cryptocurrency and how does it work? That's what I'll be covering over this first chapter, so buckle your seatbelt and get out your calculator because this is going to be all about math, numbers and secrets.. The most well known example today of a Cryptocurrency is Bitcoin. It was the first decentralized digital currency created by an anonymous coder named
Nakamoto . Bitcoin has no office, no owner and no one that can take over or control it. This is similar to how P2P sharing, torrents and email works.
There’s currently over a thousand Cryptocurrencies out there in the wild, many of which are based off the Bitcoin blockchain. But then there’s others that are innovating and pushing beyond into newer technologies such as artificial intelligence and more! Transfers of money to another country in a few seconds with no fees.. Instant transfers between all Cryptocurrencies and then back into fiat.. Even VISA debit cards to make payments with your digital coins. This is the dawn of an entirely new era when it comes to methods of exchange and making payments.
Have you ever tried to turn a secret message into different words, numbers or letters and then only the person getting it would know how to decode it? I remember back when I was a kid and there was some sort of experiment like this in a workbook. Where using the instructions you could turn a secret message into a jumble of letters and numbers. Then using the same instructions a friend would be able to decode it back into the original message. Only those with the instructions though were able to decode it. Well, this was a very basic lesson in the world of encryption and Cryptography, the backbone of how a Cryptocurrency works. Encryption these days is everywhere, from being used to secure messaging apps to working behind the scenes on the websites we visit. You’ve no doubt seen that lock up in a browser's address bar when on a website. That's encryption. Encryption is simply the process of hiding information, through the use of ciphers or codes. A key is used to transform the readable information into cipher code and then the key is used again to decrypt it back into the original information. Only the one with the key is able to unlock the cipher to be able to see the original information again. Anyone in between will see nothing but a jumble of code, which is just what we want to keep things private and secure. We must wish hackers and criminals goodluck when trying to decode a cipher because without the key it's going to be impossible for them. This is the ‘Crypto’ part of the word Cryptocurrency which simply means secret. Cryptography and encryption are used to keep transactions and wallets secure. Then by adding the word currency we get Cryptocurrency which is simply a digital asset that is designed to work as a medium of exchange. These technologies are used as a means to secure the transactions, to control the creation of additional units, and to verify the transfer of assets. The decentralized part of a Cryptocurrency though is what is most fascinating. This enables the digital currency to run all on its own thanks to the people using it. Instead of one central authority keeping the record book of all transactions and also processing them, this is is done by the users of the currency. This record book or ledger is known as the blockchain. Since everyone keeps a copy of the blockchain, this keeps the currency decentralized and secured against fake records being made. Each transaction alsohas a digital signature which is checked and confirmed automatically by people mining the coin. As you can imagine, the blockchain can be quite large in size. Thankfully though, if you just want to send litecoin to someone for example, depending on the wallet you use, you won't need to download the entire ledger. Not all Cryptocurrencies are decentralized though.. since the inception of Bitcoin, there's a few coins that work quite differently. Take ripple for example. This is a centralized coin that is being used by the banks to help speed up transactions between accounts.
Whilst centralization goes against the foundation of why Cryptocurrencies were created in the first place, even these centralized coins will no doubt improve the technology behind the fiat currencies we all use today. The time for new methods of exchange though is long overdue. A fiat system that keeps people and countries in perpetual debt is no longer a viable option for the future benefit of mankind. The current system is breaking at the seams. We only have to watch the news to see how evident this is all over the world.
The US dollar, Euro and British pound are just a few of the fiat currencies you’d be familiar with. These pieces of paper we call money are in fact not backed by anything, are controlled and can be created in endless amounts by governments and banks.
As fiat currency isn’t linked to the value of anything, governments have the power to print as much as they like. Banks on the other hand create more fiat currency by lending. There are no limits to how much money can be created out of thin air and this has led to the global money supply increasing dramatically.
The problem is, the more money that enters the system, the higher the prices rise. We see this everywhere today, with prices becoming higher and even doubling in many sectors over the course of a few years. Not only does this endless printing keep prices going up, but it also causes the value of a currency to go down dramatically. In 100 years, the purchasing power of the US dollar alone has fallen by a whopping 98%! To make matters worse, the wages and income we receive has not increased at the same rate as the rising prices. This has forced many people into debt by taking out further loans on an already decreasing currency. The system is broken.
Chapter 3 There’s a Better Way Cryptocurrencies can offer solutions to some of the problems we’re facing and also have many advantages over fiat currencies. For starters it’s owned by YOU. When you hold a certain amount of Crypto coins,
that portion is entirely owned by you and is not the property of some government or bank. You also eliminate any middle men, in this case the banks. With decentralized Cryptocurrencies, you are the bank. You are the one storing your funds in a digital wallet which is ideally located on your own hardware. This gives you full control over it and how you wish to use it. Because you’re storing the Cryptocurrencies yourself, this creates a high level of responsibility on your part. If you somehow managed to lose your digital wallet and forgot to back it up, there’s no corporation to run to, to get your funds back. Back in 2013 a man from Wales experienced this tough lesson when he accidentally threw out his hard drive containing 7,500 Bitcoin. He’d been using his Dell laptop to mine bitcoin for just a few weeks in 2009. Less than a year later his Dell laptop stopped working after he’d accidentally tipped lemonade on it. After the incident he dismantled it for parts. Most were thrown away or sold, but he kept the hard drive in a desk drawer for the next three years. By this time he had completely forgotten about the Bitcoin on it, had kids and was working on renovating his home. That was until one summer’s day when he had a clearout, which included the hard drive in his drawer containing the 7,500 bitcoin! Straight into the rubbish bin it went.
It wasn't until Bitcoin popped up on the news a few months later that he remembered just what he’d done. Today his lost Bitcoin would be worth around $130 million US Dollars. Definitely something worth having a cry over! The lesson here? Always backup your coins and tokens. Also maybe don't forget that you actually have them! Back to some of the benefits of Cryptocurrencies. Many coins also have a maximum capped supply. This means they go up in value as more people use it, not down like fiat currencies. There’s a limited supply, so there’ll only be so many of the coins available.
In the case of Bitcoin that's 21 million. As we've learnt earlier fiat currency on the other hand is created out of thin air whenever the government decides to, the supply is unlimited therefore decreasing its value over time. We also touched on the decentralized part earlier, which is one of the biggest benefits of Cryptocurrencies. There is no middle man. A global network of computers jointly manage the database that records transactions. It’s managed by its network of users peer to peer, and not by any one central authority.
Recently we've also seen many privacy friendly coins being created. In Bitcoins early days it was touted as being a private way to make payments, but we know today that this is not entirely true. Since almost everyone using bitcoin has a copy of the ledger, transactions are public and open for anyone to view. Whilst the transactions aren't connected to your name, they are listed with your bitcoin address. Therefore bitcoin is not a private way to make payments.
Now we have coins such as Monero, Verge, Z-Cash and ZenCash which aim to solve this problem and other privacy issues. Even with the decentralized Cryptocurrencies that aren't completely private, there’s no third parties involved and no corporations to go selling off your purchase history.
Ever tried sending Immediate payments with low to no fees? Well.. with Cryptocurrencies it's possible. Whilst most coins do have a small fee involved for each transaction that goes to miners of the coin. There are some that have zero fees. Take IOTA for example, where the transactions themselves verify other transactions on its network. This means IOTA doesn't need “miners” like blockchains do, in turn completely eliminating the need for fees. Another pro of Cryptocurrencies is that they provide fraud protection. Since they’re digital, they cannot be counterfeited or reversed by an untrustworthy sender. Digital currencies are truly on the cutting edge and are innovating the entire way we use money today. Even the banks are now realizing the potential benefits and getting on board with blockchain technologies offered by coins such as Ripple. Cryptocurrency is here to stay and with so many benefits over what we’re using today, its bright future is only just getting started.
Chapter 4 Researching the Coins It’s important to firstly know that not all Cryptocurrencies are used as actual
currencies ( ) like Bitcoin. There’s also what’s called , which provide coins
functionality beyond being a currency.
Then there’s ICOs or , which are the launch of new coins or
Initial Coin Offerings tokens that enable early investors to get in at a special launch price. It’s also a way to crowdfund a company or idea by providing it capital from investors. This is similar to how works but instead using the blockchain technology.
As you can imagine not all Cryptocurrencies will be of interest to us. There’s some that may be almost identical to Bitcoin, with the creators intent to try and make a quick buck. Then there’s others that may be akin to a pyramid or ponzi scheme. We saw this with BitConnect in 2017 and with its inevitable collapse in January of 2018.
There’s even reports floating around that up to 80% of (ICOs) initial coin offerings
may be scams. This is due to a lack of regulation in the crypto area, with scammers quiet easily able to create a token used for crowdfunding. They have the potential to receive millions in capital from investors by promising the world but ultimately delivering little to nothing.
The times are changing though with regulation bodies such as the Securities and
Exchange Commission (SEC) beginning to crack down on fraudulent tokens and
ICOs. One such case we’ve seen in 2018 was the takedown of Centra Tech (CTR) who were promising investors of a crypto to fiat mastercard that you could use anywhere. This was all marketing hype and full of false promises. In reality there was no actual partnership with mastercard or even planned.
Fraudsters may entice investors by touting an ICO investment “opportunity” as a way to get into this cutting-edge space, promising or guaranteeing high investment returns. Investors should always be suspicious of jargon-laden pitches, hard sells, and promises of outsized returns. Also, it’s relatively easy for anyone to use blockchain technology to create an ICO that looks impressive, even though it might actually be a scam.
Cryptocurrencies that’ll be of interest to us, are ones that have: 1.
A strong community and presence on places such as reddit and twitter.
A legitimate team with a high reputation and technical ability.
A long history free of any controversy, with consistent development, transparency and technological innovation.
A well designed website with a roadmap that makes sense, FAQs, whitepaper and the goals they wish to achieve.
One of the best places to start when researching coins is .
coinmarketcap.com Here you’ll see all the top coins in order of its market cap. This is calculated by the total amount of circulating coins multiplied by its value. Simply speaking, the higher a coin is on this list, the more popular it is.
When selecting a coin or token on , coinmarketcap you’ll be able to see all its
details. This includes its chart (showing the price history), the exchanges it’s traded on, its circulating supply, maximum supply and much more. Before buying into any Cryptocurrency be sure to do the research on , the coins
coinmarketcap website and on the various social media channels.
Youtube.com , and are also great places to research the
different coins along with their benefits and flaws.
I also like to do a scam search on google for the coin or token by typing
site:reddit.com scam (coin name) . You can also do the same search on
bitcointalk.org by typing .
site:bitcointalk.org scam (coin name) If someone’s already suspicious or it’s a well known scam, it’s highly likely those two searches will pick it up. Remember.. since Cryptocurrencies are still for the most part unregulated. Extreme caution must take place before investing.
Chapter 5 Getting Started Converting fiat currencies (USD, EURO etc) into digital Cryptocurrencies is best
done by purchasing either Bitcoin (BTC) or Ethereum (ETH). You may also wish to purchase one of the other coins on offer by an exchange. Bitcoin and Ethereum though are the two main coins used for trading on the major altcoin exchanges.
An is where you’ll be able to trade off either Bitcoin or Ethereum altcoin exchange
for hundreds of other coins and tokens available in the marketplace.
The main factors to consider when choosing which first coins to purchase depends on a few things:
The transaction fee which is paid when sending the coins.
The speed of sending the coins.
What your goal is. If your prime goal is to purchase other coins (altcoins), the best choice will be
. It’s accepted by the main altcoin exchanges to trade into other coins and tokens. It’s also generally faster and has lower transaction fees than Bitcoin. Speaking of
Bitcoin (BTC).. it’s a good option if you simply wish to invest in crypto without worrying about any of the other coins. Bitcoin is still the Cryptocurrency that started it all and investors are always trying to increase their holdings of it. It’s definitely not going away anytime soon and now with Segwit fully implemented, transactions are faster and cheaper than ever before. Any of the other coins available on one of the are best to
fiat to crypto exchanges purchase only if you’re wanting to invest solely in that coin. These include coins such as litecoin, Bitcoin Cash, Ripple and Dash. Don’t worry though if you wish to start holding another coin after purchasing say litecoin. You’ll simply transfer it off to an altcoin exchange and trade it off into one of the many other coins. The most beginner friendly exchanges to trade one coin or token for another are and .
There’s hundreds of Cryptocurrencies and many that are well worth investigating.
With careful research, it’s possible to create a portfolio of coins and tokens that show a strong return on your initial investment. The future is in digital decentralized Cryptocurrencies and the time to get involved is now.
Next, let's take a look at the safest places to buy your very first coins.
Chapter 6 Buying your first Coins It’s important to buy Cryptocurrencies through a reputable exchange that’s been around for awhile and has shown a high level of trust within the community. Some of these exchanges have coupons for a discount or bonus so be sure to do a
coupon search online before joining them. These are the top exchanges based upon ease of use, their security and track record. Literally all of these exchanges require your personal ID for authentication. This ensures that exchanges meet legal requirements should a government authority come knocking on their door. If you're more privacy oriented and don't wish to give out your personal information to third parties, there’s still options.
A Cryptocurrency ATM that has no verification, the localbitcoins website or a friend who is willing to sell you some Cryptocurrencies will be your best bet. I'll talk more about these options shortly. Please note that any fees I quote for the exchanges were correct at the time of writing. Always double check on the exchanges FAQ for more information on their fee structure. Exchanges may change their fees at any time. Also your bank may charge an international transaction fee as high as 3%. This of course is only if you're purchasing using a different currency than the one your local bank works with. Lastly.. full disclosure. I’m not connected or affiliated with any of the mentioned exchanges. This enables me to be as unbiased as humanly possible. Always be cautious of review sites recommending exchanges as 9 times out of 10, they’ll be receiving some sort of payment or commission from them.
: July 2011
: Very easy to use. Simple user interface. Relatively low fees. Very strong security. 40 Billion exchanged and more than 10 million users. They use actual current Bitcoin price. No undisclosed fees in exchange rate.
: History of freezing accounts for the smallest of reasons. Verification (ID checks) required. Withdrawals can be slow in peak periods. Customer service is less than desirable. Spending of Coins is tracked. Wallets private keys controlled by Coinbase.
The largest and most well known exchange to get buying Cryptocurrencies is undoubtedly . These guys have exchanged a whopping $50B into oinbase.com
digital currencies and also own the popular GDAX exchange. Coinbase has a reputation as being one of the easiest places to get started. It’s not without its problems though. There’s quite a lot of trade off for using something so simple. Check the cons for more details.
They use the actual bitcoin exchange rates, without any hidden fees which is a big plus. There’s a 4% debit and credit card fee or 1.5% for bank transfers when purchasing.
: Oct 2014
: Specializes in Euro to Crypto for the European region. Beginner friendly. Lots of payment options. Relatively low fees.
: Euro only. Fees are very reasonable but aren’t disclosed (I’ve worked it out for you). Verification required.
Bitpanda.com is a very popular Austrian based exchange specializing in the
European region. It's currently one of the best ways for purchasing Bitcoin and a handful of other altcoins using Euro. Their quoted price includes all fees. From Bitcoins actual price, I've worked it out to be around 3.8% for credit / debit card payments which is even less than Coinbase.
: Great as a basic exchange for trading crypto to crypto. One of the simplest ways to buy Bitcoin. Perfect for beginners.
: Expensive. Verification required. Slow withdrawal times during peak periods.
Changelly.com is primarily a simple exchange platform enabling you to trade a number of Cryptocurrencies. They have a simple 0.5% fee for this.
For buying Bitcoin with a credit card though it’s a different story. I’ve calculated an undisclosed 1.7% fee added to the quoted ‘exchange’ rate, then a 5% ‘changelly’ fee and additional 5% credit card processing fee on top of that. All up that’s nearly 12% in fees, which is quite steep!
: April 2013
Pros : Purchase in Euro or USD from 188 countries. Cons : Expensive. Verification required. Buy orders only.
Coinmama.com has a strong reputation within the Cryptocurrency community as
a safe, honest and trustworthy broker. They are based in Israel and provide a good basic exchange for purchasing either Bitcoin or Ethereum. They include a 5.5% fee in their quoted price with an additional 5% fee for any credit or debit card transaction. This is definitely on the expensive side but the service is trusted and very easy to use.
: Deal directly with people selling Bitcoin. No fees, just the exchange rate set by the seller. Get a good deal, with some very low exchange rates.
: Risk of being scammed. Limited support
LocalBitcoins.net is quite different to the typical exchanges listed here. It lets you buy locally off people in your area. You can even pay in cash with some sellers.
Localbitcoins deals with bitcoin only, so if you’re after one of the other Cryptocurrencies you’ll be out of luck. Before buying, check the sellers exchange rate against the current Bitcoin price on .
Be sure to only buy from trusted sellers who have a 100% positive rating with hundreds of trades under their belt. Also make sure they’ve been around for at least a few years on the site. Follow the guides on for more
information. Trading in person is always the safest option.
Cryptocurrency ATM Established
: First Bitcoin ATM unveiled in 2013
: Convenient. Walk straight off the street and buy Bitcoin. No ID checks on many ATMs. High level of trust. Transfers to your own wallet.
Cons : Fees can be unclear and often hidden within the exchange rate.
One of my favorite ways to buy one of the main coins is at a Cryptocurrency ATM. Originally these ATMs offered the buying and selling of Bitcoin only. Nowadays many other coins can be bought and sold at ATMs, including Bitcoin Cash, Ethereum, Dash, Litecoin, Zcash and Monero.
This is also a great way to buy for the Privacy conscious as many ATMs don't require any form of ID or authentication. Depending on what country you're in though you may need to provide your phone number, driver's license, or have a selfie taken by the ATM itself. This will be all dependent upon the laws in your Country or State. Before heading off to use an ATM check out . It offers a handy
map of all crypto ATMs in your local area. Here you'll be able to find out the locations, the crypto currencies on offer, fees and more. The beauty of a Cryptocurrency ATM is that you can simply walk right off the street and purchase in person. These machines usually charge 5% or more and may use a higher exchange rate, so check these out beforehand.
: No fees (hopefully)! Depending on the friend, very safe and virtually risk free. No ID check or authentication required. No need to give out personal information.
: Having to ask around friends. Amount you can purchase will be limited to what your friend is willing to sell.
Buying Cryptocurrencies off a friend is possibly one of the best options for buying Cryptocurrencies. That’s also depending on how good of a friend they are.. If they're a trustworthy friend, they won’t be adding some fee on top of the sale and may even give you a special ‘mates rate’.
Try asking around your friends. You might be surprised who has some Cryptocurrencies and they may be willing to sell you some. Buying with no fees from a friend is definitely the best option (if available).
Chapter 7 Final Tips Here’s some final tips to get you started in no time: 1.
Use a wallet to store coins and tokens on your phone such as coinomi 2. or for storing large amounts of cryptocurrencies.
Use a hardware paper wallet 3. Always backup your wallets passwords and backup phrases. Keep them somewhere safe and secure.
Never leave coins or tokens sitting on an exchange. If it’s hacked or goes out of business, you’ll be saying to your coins.
bye bye 5. Don’t ever send Cryptocurrencies to an unsolicited ‘competition’ or ‘giveaway’. It’s likely a scam. Twitter has been plagued by these recently.
If a token has marketing that sounds too good to be true, it likely is! 7. Cryptocurrencies can be volatile. Only invest as much as you can afford to lose.
Buy on the lows, sell on the highs. Holding for the long term is a smart idea.
Always research the coins and tokens you plan to purchase. Does it promise high returns? Require you to recruit others (pyramid scheme)? Avoid at all costs.
Don’t forget why Cryptocurrencies were created in the first place. To be used as currencies! That means accepting them as a form of payment and purchasing things using them.
So Where do You go From Here?
I hope you’ve enjoyed You’ve just
The Bitcoin and Cryptocurrency Buyers Guide!
taken the first few steps towards taking back your financial freedom.
Congratulations! We can of course part ways now and you’ll have a good starting point to begin buying your very first Cryptocurrencies.
OR you can join me for the next step with my Cryptocurrency Mastery for Beginners program.
What is the Cryptocurrency Mastery for Beginners?
It’s the complete step-by-step online course designed to help you master Cryptocurrencies. Over 25 modules will guide and take you from complete novice to pro in no time. No ambiguity or confusion.
Not only will you be confidently buying, using and trading cryptocurrencies in no time but you'll also learn how to avoid hackers and the costly mistakes so many make. If you’re ready to start taking things to the next level and ,
then this is for you.
Here’s a special invitation just for readers of this book. To “unlock it,” plus some special bonuses I’ve put together just for readers like you, sign up below.
Come join me on this exciting journey into the world of Cryptocurrencies. Matt ‘your crypto buddy’ Cossey