How to buy Bitcoin and Ethereum

Mashable

Business

If you’ve seen the incredible upward momentum of Bitcoin, Ethereum, and other cryptocurrencies, you’ve maybe also considered getting in on the act. Now, you’re gonna learn how.

But very first, a disclaimer: Bitcoin, Ethereum, and so many of the other cryptocurrencies out there can be a way to pay for stuff online, sure. And they can also be (if they aren’t already more popular as) investments. And investments, you might know, can go up and down. You can build up money on them, or lose it. And those values can fluctuate frantically, as you might’ve also seen lately.

To put it simply: proceed with extreme caution. We’re not here to tell you whether or not you should buy it, just to demonstrate you how you can pull it off.

That said, the rise of cryptocurrencies are an titillating moment for technology, and even if you don’t want to actually buy any, it’s worth knowing how it all works.

Let’s begin where any investment starts—in your own wallet.

The wallet.

Just like depositing money in the bank or buying a stock, you keep your cryptocoins in a digital account known as a wallet, which lets you store, receive, and send them.

But it’s a bit more complicated than that, and there’s some serious notes of precaution to be aware of with a wallet. Cryptocurrency won’t just magically emerge in your wallet out of lean air. You’ve gotta buy it, very first. There are several ways to do that, but the easiest is to exchange a fiat currency—dollars, euros, pounds, etc—for some cryptocurrency. And the easiest place to do that is at an exchange.

The exchanges.

Think of a cryptocurrency exchange as a stock market for crypto. You register for it, deposit your fiat currency of choice, and then, you can buy yourself some crypto. But the cryptocurrency market is still pretty new—and it’s not trussed by the same laws and regulations as the stock market. So before you do anything else, reminisce this: Your money is never 100% safe.

Your money is never 100% safe.

The cryptocurrency markets have matured in latest years, but there’s still a lot that can go wrong. There are scammers, out to separate you from your money. Software errors could theoretically wipe out your store of bitcoin. And there’s always the possibility of user error (i.e. you screwing up) that can send your cryptocurrency out into the abyss.

Hackers can also break in and steal it. It’s happened before; this summer, $32M in Ethereum was stolen. One of the largest bitcoin exchanges, Mt. Gox, has had some of its bitcoin stolen, and it went bankrupt in 2014.

Many users who had their bitcoin in Mt. Gox are still waiting to get it back. And even if you didn’t hold your bitcoin there, the incident triggered a massive price crash, in which Bitcoin lost over 70% of its value.

After the Mt. Gox hack the value of Bitcoin slumped to below $200. It eventually recovered and reached fresh heights, but it took a while to get there.

And yes—things have switched since Mt. Gox. There are well-funded exchanges out there, backed by well-known VC funds, overseen by regulatory bods like the Fresh York State Department of Financial Services. None of this ensures your money as totally safe, tho’. Same with the fresh, decentralized exchanges that are coming—exchanges which promise to keep your money safe, by means of technology instead of authority. We’ll come to see how well they work. That said?

If you’re looking for your very first exchange, a good bet is Coinbase, a U.S.-based cryptocurrency exchange with more than eight million users, operating in thirty two countries around the world. Coinbase lets you deposit fiat money from a bank account, and trade Bitcoin, Ether, and Litecoin. And while there are hundreds of cryptocurrencies, this is a very good, core trio. Each shows a lot of promise, each in its own different way.

Coinbase is pretty elementary. You’re never gonna see stuff like cryptographic keys or QR codes, which may be intimidating to beginners. You can see how much you have in each of your accounts—dollar/euro, ETH (Ether), BTC (Bitcoin) and LTC (Litecoin)—and you can buy, sell, or send your crypto anywhere you like.

But Coinbase isn’t without its drawbacks. For one thing, you don’t have access to your private cryptographic keys—in other words, you don’t actually control the cryptocurrency you have on Coinbase so much as you give it to Coinbase for safekeeping. Coinbase also charges pretty big fees on transactions. Eventually, there’s a pretty long list of complaints on various crypto-related forums about Coinbase freezing customers’ funds for dubious reasons.

Coinbase also lacks advanced options such as stop-loss orders or margin trading. If that’s what you’re looking for, take a look at (also U.S.-based) Kraken, which supports a larger number of cryptocurrencies and has more options.

Another alternative is the Luxembourg-based Bitstamp, which has been around for more than five years and has successfully navigated through many dark periods in Bitcoin’s history.

How do I actually commence working with an exchange?

Very first, you register with a username and a password, just like most online services. Then, you’ll likely be required to send some proof that you are who you say you are—an ID scan is likely, for example. This is good: You don’t want to trade at an exchange that accepts just anyone, as that’d likely indicate that the exchange isn’t audited to a high standard.

Once you’ve done that, you’ll need to send some funds. On Coinbase and Kraken, the easiest way to do that is to go after the instructions on how to transfer the money from your bank account. In most cases, it’ll just be a standard wire transfer, and you can most likely get help at your bank if you’re unassured what to do.

In this example, I’m about to buy a one hundred euros worth of Ethereum. This will cost me an extra Two.99 euro fee and will net me 0.3956 ETH.

Picture: Stan Schroeder/Mashable

Then, you put in a buy order. You choose how much money you want to spend, and which cryptocurrency you want to buy. After a (usually brief) wait, you’ll see some BTC/ETH in your account.

Congrats, you just became the holder of some digital money. Selling is similar, and both buy and sell orders will cost you a little, so don’t do it just for joy. There are fees for each BTC/ETH transaction; this is a part of the protocols. The exchange might have fees of its own, too, and exchange rates vary considerably from exchange to exchange.

I bought some crypto, what do I do now?

Before you open an account and buy your very first cryptocurrency, you need to think long and hard why you need it in the very first place. If you’re here to trade, then just leave it on the exchange (or leave just enough so you can trade at volumes you’re interested in).

All cryptocurrencies are utterly volatile, and you should be ready to lose a large percentage of value in a flash, but that’s a risk you need to take if you’re interested in trading. Day traders, who typically buy and sell many times during one day, have various way of mitigating risk, including never leaving an open position and using stop-loss orders. It’s very much not recommended to attempt to guess the market’s sentiment in very brief time frames, as it’s utterly hard to do unless you’re an experienced.

If you bought into crypto for long-term value holding—say, if you believe that one BTC will one day trade at $Ten,000, and you’re willing to sit through some rollercoaster rails to get there—you’ve got several options. Again, you can just leave your money in the exchange, but that increases the risk of getting swindled by the exchange itself, or a hacker violating through its security. This risk gets smaller by the day, but it’s real.

There’s a duo of things you can do to minimize that risk, most of which are visible (for example: choose a good password for your account, store it securely, and enable two-factor authentication). Also, some exchanges such as Coinbase suggest the service of a “vault,” which lets you store your bitcoin in such a way that it takes a longer period of time and numerous checks for anyone, including you, to access it.

Alternatively, you can send your crypto to a wallet that you control. There are many software wallets, and some, like the mobile wallet Coinomi, support a large number of cryptocurrencies. Good wallets for Ethereum are MyEtherWallet and Parity. For Bitcoin, some popular choices include Electrum and Xapo, which has the added benefit of issuing you a pre-paid card which can be used to spend BTC in stores and ATMs.

Most wallets will create a fresh address for you, and you can send your BTC or ETH to that address. A petite fee will be deducted and you’re now in control of your funds. Again, this comes with certain risks. You could leave behind your password. You could get hacked. You could lose your smartphone (which is why you should always generate and keep a backup phrase somewhere if you have a mobile wallet).

One of the most secure ways to store your cryptocurrency is a hardware wallet, such as Trezor.

You can also offload your funds to cold storage. This could either be a paper wallet—literally a chunk of paper with an address, keys, and a QR code—or a hardware wallet, such as Trezor or Ledger, both of which work with numerous cryptocurrencies. Hardware wallets come with their own set of instructions, and creating a paper wallet goes beyond the scope of this text, but you’ll find excellent tutorials online.

Keeping your funds offline makes them safe from hackers. But you’re susceptible to other issues; a fire could gulp your paper wallet, and a flood could demolish your hardware wallet. In absolutely all cases, this is paramount: Have a backup.

But I want to do stuff with my crypto!

Perhaps you’re not interested in saving or trading cryptocurrencies; you want to be an active part of the ecosystem. Things get a bit complicated here, as each cryptocurrency is different. With Bitcoin, you can buy stuff at numerous online (and even some offline) stores. Overstock, Steam, and Microsoft all accept Bitcoin in some capacity.

For newcomers, this is impractical, as most retailers that accept BTC also accept regular old cash, so converting your money to BTC just to buy something doesn’t make much sense. But there are use cases for spending BTC in stores. Say you bought bitcoin a few years ago—you could be a millionaire right now, and you might want to spent some of that money. You can also send BTC to another user without an intermediary (this is what makes BTC fine).

Ethereum, presently the 2nd largest cryptocurrency in terms of market value, is different. Since Ethereum is more of a platform for decentralized applications and less of a payment system (it works as both, however), you’ll need ETH to participate in token sales, and to build your own apps on the platform.

Regardless of your intent, the same logic applies. Keep the crypto that you won’t need for a while in a secure wallet, a vault, or cold storage. And keep a separate wallet with a portion of your overall funds—perhaps a mobile one—for those daily transactions.

I’m a crypto god now, right?

While the above might be a lot to gulp for an absolute newcomer, there’s a lot more to learn about cryptocurrencies. And as we said before, each cryptocurrency is a little different; they’re permanently evolving, to say nothing of the fresh ones regularly popping up.

Read FAQs and terms & conditions documents for each service you use.

Above, you’ve got different options for buying your very first bitcoin or bit of ether, options for storing them, and options for spending them. But again: It’s your money. You’re gonna want to be covered. Do your best to read the FAQs and terms & conditions documents for each service you use.

Hidden fees and caveats of all sorts are possible. Most cryptocurrencies are decentralized by nature, but most apps that simplify the process of buying, selling and possessing crypto are centralized, and you’re compelled to depend on the intentions and capabilities of the people who maintain them. For example, Coinbase has boundaries on how much money you can spend in a certain time framework; there’s also a limit on how much you can hold in your account at any given time.

Mistakes are also possible. It’s not hard to lose bitcoin by sending it somewhere and simply leaving behind where. You’ll be able to see the address and the transaction on the blockchain, but may not have access to the keys to retrieve it.

The best way to keep your BTC, ETH, and other cryptos safe is to educate yourself; read, re-read and learn until you indeed know what’s happening before you click a button.

Trading cryptocurrencies may have tax implications depending on where you live. It might be a good option to talk to your bank or tax advisor before doing any of the above.

Ultimately, the standard disclaimer applies: Never put funds in risky assets if you’re not ready to lose them.

Disclosure: The author of this text possesses, or has recently wielded, a number of cryptocurrencies, including BTC and ETH.

How to buy Bitcoin and Ethereum

How to buy Bitcoin and Ethereum

The insane rise of Bitcoin and Ethereum makes investments in the two main cryptocurrencies very attractive. You can turn a nice profit in trading but, to play in this market, you very first need to get your arms on some coins. So, how do you buy Bitcoin or Ethereum?

Like all the cryptocurrencies that matter, Bitcoin and Ethereum are mainly available through dedicated exchanges. There are also other ways to get Bitcoin and Ethereum, like mining and private trading but, for most people, an exchange is the safest and easiest way to buy into this market, so this is what we will look at here.

There are lots of exchanges out there for Bitcoin or Ethereum, but only a few have significant volume in a day — like Coinbase, Kraken and Bitstamp. Those are the exchanges where the most coins are traded, which also makes them the very first places to consider for buying Bitcoin or Ethereum with fiat currency (US dollars, Euro, British Pounds, and so on).

However, there are some exceptions to this rule — and the fattest one of them is Poloniex — which only lets you buy cryptocurrency using other cryptocurrency. Naturally, those are not an option if you want to turn your money into Bitcoin or Ethereum, but they are worth your attention later down the road, when you are considering buying other cryptocurrency.

But what you should very first find out is which of those exchanges support your country. Some may be open to a limited number of markets, whereas others may be more permissive. Exchanges list the supported markets on their website, so it is effortless to check which ones work for you.

If you live in the US, Canada, UK or any of the big European markets you should not have any issues here however. Regardless, there should be at least one major exchange available to you.

If you want to buy both Bitcoin and Ethereum from the same exchange, that narrows down the list a bit further. For example, Coinbase and Kraken suggest both, whereas Bitstamp only carries Bitcoin.

It is also enormously significant to look at the track record of the exchanges that you are considering. So, research whether they had any security problems in the past (stolen Bitcoin or Ethereum is a warning sign) and how those were dealt with (customers not getting compensated after a theft is another one).

Next find out what sort of security features they suggest and how they are implemented. Two-factor authentication is a must-have option, but not all exchanges that suggest it let you receive codes via SMS, for example.

In terms of prices, they do not vary dramatically from exchange to exchange, but there are some exceptions here as well. As a result, some exchanges are better for buying, others for selling. You should also look at the daily variations, if you want to take advantage of fluctuations, as some exchanges demonstrate more volatility while others are more stable.

It may seem contrary to what you may know about cryptocurrencies, but there are rules involved when it comes to trading and exchanges like to go after them. The idea of buying explosions of Bitcoin or Ethereum — through an exchange at least — right away is not truly grounded in reality.

All the major exchanges require some form of verification before you can buy Bitcoin and Ethereum. After you sign up, you will be required to upload documents that prove who you are and where you live. The type of documents supported depends on the exchange, but, generally speaking, scans of your ID and a copy of a latest utility bill or bank statement will do the trick.

What is not instantly visible when it comes to verification is how long the entire process can take. The big exchanges get a giant number of requests these days, so it can take anywhere from a day to a duo of weeks before you get the green light. How long it takes varies, so it might be a good idea to request verification on numerous exchanges.

There are two main ways that you can fund your account. The very first is a bank transfer, for which there are generally no fees involved on the exchange side, but typically involves a stricter level of verification. The 2nd is a debit or credit card payment, which may be available on a lower verification level, but comes with daily and monthly thresholds.

Generally speaking, bank transfers are ideal if you want to invest large sums of money, but you also have to add processing times into the equation. When cryptocurrencies are stable, that is not a problem, but if there is a dip you want to take advantage of, time is of the essence.

Before you make an investment, you should know that exchanges may not ensure your money or coins in case they are stolen — unlike a bank, for example.

Find out what the code or the abbreviation for Bitcoin or Ethereum is on the exchange that you are using. Why is this significant? Because Bitcoin is commonly listed as BTC, but it can also be XBT, for example. Ethereum, meantime, is typically listed as ETH.

However, there may be similar codes on the exchange, like ETC, which is a different coin altogether, albeit similar in name (Ethereum Classic, in this case). Buying the wrong coin is not something that you want to risk.

Take a look at the historical data provided by the exchange for the exact pair that you want to trade (for example, BTC/USD or ETH/EUR), and set your expectations accordingly. Take volatility into account as well, if the exchange has large variations in buying prices for the day.

Use basic trading recommendations and frequently check prices before you buy Bitcoin or Ethereum. If you do not do your research, you risk losing big. If you do your research, the profits can be substantial.

For example, buying Bitcoin or Ethereum right when there is a fresh price record is a massive, massive risk, because there can be a massive correction right after that. That is not uncommon.

A sensible lump of advice would be not to buy when the madness is at its peak, but rather to buy when there is (some) stability in the market. It may be hard to go after, but it is a safer strategy in the long run.

Much of what has been said above applies to selling as well. For example, it may be a bad idea to sell Bitcoin or Ethereum when the price takes a massive dive, like during a correction, because you can never truly know how quickly it will bounce back.

Sometimes it can take hours or days and sometimes it can take minutes. That is not to say that the price will always recover, no matter what, but in two thousand seventeen it has.

Know that trading cryptocurrency is risky, so only risk money that you are ready to lose.

Let’s talk about the cost of buying some Bitcoin or Ethereum. Readily available you have what is commonly known as the market price. That’s the rate that the exchange offers for instant purchases, and the one that you typically see when you have instant buy buttons, like $500 for a certain amount of Bitcoin or $100 for a certain amount of Ethereum.

Market prices usually do not net you the most coins for your money, because exchanges can use rates that are worse than what is available in trading. Sometimes, the difference can be dramatic, so be sure to look at the trading section to check what the difference in rate is. Generally speaking, where you get the best rate is in trading.

In trading, a basic option that you can use — and what I recommend you commence with — is limit orders, which apply to both buying and selling. Limit orders let you set the price that you want to pay or receive for a given amount of Bitcoin or Ethereum, and, as a result, they give you (some) control over the price.

If the orders are packed, you will receive the equivalent amount, typically with a transaction fee deducted. If the orders are not packed, you can either wait for the price to be met or create fresh orders. Keep in mind that once you have created a limit order, the respective amount (in either fiat currency or cryptocurrency) will be reserved by the exchange until the order is packed or you cancel it.

To give you an example of why trends and volatility matter, in a period when prices are rising setting a low order price will result in an order that will not get packed until the price drops. That may not happen, so you risk losing an chance. At the same time, you can also end up with some cheap Bitcoin or Ethereum, when there is a large-enough drop in the market and recovery afterwards.

There are other order options available as well, in case you want to have more control over your order. For example, you can set up an order to buy at a limit price, that kicks in when the rate reaches a certain level (called a stop).

It is significant to know exactly how these work before creating one, because the naming and terminology used and the underlying principles can be hard to understand just by looking at the order page. Exchanges usually have a support section that cracks down every order type available and with an example to help you better understand them.

What’s next after buying?

After your have purchased Bitcoin or Ethereum, you should determine where you want to store your coins. If you are interested in trading, it may be best to keep them on the exchange, so you can have your Bitcoin or Ethereum readily available for a quick order. There is a certain level of risk involved here tho’: if the exchange gets hacked or someone hacks your account you can lose everything.

An alternative is suggested by private wallets, which can be ideal for the long-term storage of Bitcoin or Ethereum. With a wallet you can withdraw Bitcoin or Ethereum and make payments without confinements. (There are different wallets for Bitcoin and Ethereum — Ethereum has an official one.)

The benefit, if you have accounts on numerous exchanges, is that you can withdraw every Bitcoin or Ethereum to a single wallet, which is convenient. Same goes for deposits, you can transfer to whichever wallet you want. (Exchanges have wallets for Bitcoin and Ethereum, so you can deposit from a private wallet and also withdraw to a individual wallet.)

But there is a big catch with private wallets. It offers a certain degree of security, because you need to have both the (random) username and the password that you have set up to use it but, because the wallet is not tied to anything, if you don’t have the username and the password anymore you can smooch your Bitcoin or Ethereum goodbye as there is no way to recover that information. And you would not be the very first person to lose a wallet either.

Bitcoin and Ethereum may not be clearly regulated or regulated at all in your country, but that does not mean that you will not have to pay taxes if you net a profit (or if you do any transactions involving the two cryptocurrencies). So do your research on this before you hop on the bandwagon. There is a good chance that, if you net a profit, you will net a profit after taxes too, but how much depends on what the law says.

These are the basics of buying Bitcoin and Ethereum, but if there is something else that you would like to know feel free to drop a comment in the section below.

How to buy Bitcoin and Ethereum

Mashable

Business

If you’ve seen the incredible upward momentum of Bitcoin, Ethereum, and other cryptocurrencies, you’ve maybe also considered getting in on the activity. Now, you’re gonna learn how.

But very first, a disclaimer: Bitcoin, Ethereum, and so many of the other cryptocurrencies out there can be a way to pay for stuff online, sure. And they can also be (if they aren’t already more popular as) investments. And investments, you might know, can go up and down. You can build up money on them, or lose it. And those values can fluctuate frantically, as you might’ve also seen lately.

To put it simply: proceed with extreme caution. We’re not here to tell you whether or not you should buy it, just to display you how you can pull it off.

That said, the rise of cryptocurrencies are an arousing moment for technology, and even if you don’t want to actually buy any, it’s worth knowing how it all works.

Let’s begin where any investment starts—in your own wallet.

The wallet.

Just like depositing money in the bank or buying a stock, you keep your cryptocoins in a digital account known as a wallet, which lets you store, receive, and send them.

But it’s a bit more complicated than that, and there’s some serious notes of precaution to be aware of with a wallet. Cryptocurrency won’t just magically emerge in your wallet out of skinny air. You’ve gotta buy it, very first. There are several ways to do that, but the easiest is to exchange a fiat currency—dollars, euros, pounds, etc—for some cryptocurrency. And the easiest place to do that is at an exchange.

The exchanges.

Think of a cryptocurrency exchange as a stock market for crypto. You register for it, deposit your fiat currency of choice, and then, you can buy yourself some crypto. But the cryptocurrency market is still pretty new—and it’s not tied by the same laws and regulations as the stock market. So before you do anything else, recall this: Your money is never 100% safe.

Your money is never 100% safe.

The cryptocurrency markets have matured in latest years, but there’s still a lot that can go wrong. There are scammers, out to separate you from your money. Software errors could theoretically wipe out your store of bitcoin. And there’s always the possibility of user error (i.e. you screwing up) that can send your cryptocurrency out into the abyss.

Hackers can also break in and steal it. It’s happened before; this summer, $32M in Ethereum was stolen. One of the largest bitcoin exchanges, Mt. Gox, has had some of its bitcoin stolen, and it went bankrupt in 2014.

Many users who had their bitcoin in Mt. Gox are still waiting to get it back. And even if you didn’t hold your bitcoin there, the incident triggered a massive price crash, in which Bitcoin lost over 70% of its value.

After the Mt. Gox hack the value of Bitcoin slumped to below $200. It eventually recovered and reached fresh heights, but it took a while to get there.

And yes—things have switched since Mt. Gox. There are well-funded exchanges out there, backed by well-known VC funds, overseen by regulatory bods like the Fresh York State Department of Financial Services. None of this ensures your money as totally safe, tho’. Same with the fresh, decentralized exchanges that are coming—exchanges which promise to keep your money safe, by means of technology instead of authority. We’ll come to see how well they work. That said?

If you’re looking for your very first exchange, a good bet is Coinbase, a U.S.-based cryptocurrency exchange with more than eight million users, operating in thirty two countries around the world. Coinbase lets you deposit fiat money from a bank account, and trade Bitcoin, Ether, and Litecoin. And while there are hundreds of cryptocurrencies, this is a very good, core trio. Each shows a lot of promise, each in its own different way.

Coinbase is pretty ordinary. You’re never gonna see stuff like cryptographic keys or QR codes, which may be intimidating to beginners. You can see how much you have in each of your accounts—dollar/euro, ETH (Ether), BTC (Bitcoin) and LTC (Litecoin)—and you can buy, sell, or send your crypto anywhere you like.

But Coinbase isn’t without its drawbacks. For one thing, you don’t have access to your private cryptographic keys—in other words, you don’t actually control the cryptocurrency you have on Coinbase so much as you give it to Coinbase for safekeeping. Coinbase also charges pretty big fees on transactions. Ultimately, there’s a pretty long list of complaints on various crypto-related forums about Coinbase freezing customers’ funds for dubious reasons.

Coinbase also lacks advanced options such as stop-loss orders or margin trading. If that’s what you’re looking for, take a look at (also U.S.-based) Kraken, which supports a larger number of cryptocurrencies and has more options.

Another alternative is the Luxembourg-based Bitstamp, which has been around for more than five years and has successfully navigated through many dark periods in Bitcoin’s history.

How do I actually commence working with an exchange?

Very first, you register with a username and a password, just like most online services. Then, you’ll likely be required to send some proof that you are who you say you are—an ID scan is likely, for example. This is good: You don’t want to trade at an exchange that accepts just anyone, as that’d likely indicate that the exchange isn’t audited to a high standard.

Once you’ve done that, you’ll need to send some funds. On Coinbase and Kraken, the easiest way to do that is to go after the instructions on how to transfer the money from your bank account. In most cases, it’ll just be a standard wire transfer, and you can very likely get help at your bank if you’re unassured what to do.

In this example, I’m about to buy a one hundred euros worth of Ethereum. This will cost me an extra Two.99 euro fee and will net me 0.3956 ETH.

Photo: Stan Schroeder/Mashable

Then, you put in a buy order. You choose how much money you want to spend, and which cryptocurrency you want to buy. After a (usually brief) wait, you’ll see some BTC/ETH in your account.

Congrats, you just became the holder of some digital money. Selling is similar, and both buy and sell orders will cost you a little, so don’t do it just for joy. There are fees for each BTC/ETH transaction; this is a part of the protocols. The exchange might have fees of its own, too, and exchange rates vary considerably from exchange to exchange.

I bought some crypto, what do I do now?

Before you open an account and buy your very first cryptocurrency, you need to think long and hard why you need it in the very first place. If you’re here to trade, then just leave it on the exchange (or leave just enough so you can trade at volumes you’re interested in).

All cryptocurrencies are utterly volatile, and you should be ready to lose a large percentage of value in a flash, but that’s a risk you need to take if you’re interested in trading. Day traders, who typically buy and sell many times during one day, have various way of mitigating risk, including never leaving an open position and using stop-loss orders. It’s very much not recommended to attempt to guess the market’s sentiment in very brief time frames, as it’s enormously hard to do unless you’re an experienced.

If you bought into crypto for long-term value holding—say, if you believe that one BTC will one day trade at $Ten,000, and you’re willing to sit through some rollercoaster rails to get there—you’ve got several options. Again, you can just leave your money in the exchange, but that increases the risk of getting swindled by the exchange itself, or a hacker violating through its security. This risk gets smaller by the day, but it’s real.

There’s a duo of things you can do to minimize that risk, most of which are visible (for example: choose a good password for your account, store it securely, and enable two-factor authentication). Also, some exchanges such as Coinbase suggest the service of a “vault,” which lets you store your bitcoin in such a way that it takes a longer period of time and numerous checks for anyone, including you, to access it.

Alternatively, you can send your crypto to a wallet that you control. There are many software wallets, and some, like the mobile wallet Coinomi, support a large number of cryptocurrencies. Good wallets for Ethereum are MyEtherWallet and Parity. For Bitcoin, some popular choices include Electrum and Xapo, which has the added benefit of issuing you a pre-paid card which can be used to spend BTC in stores and ATMs.

Most wallets will create a fresh address for you, and you can send your BTC or ETH to that address. A puny fee will be deducted and you’re now in control of your funds. Again, this comes with certain risks. You could leave behind your password. You could get hacked. You could lose your smartphone (which is why you should always generate and keep a backup phrase somewhere if you have a mobile wallet).

One of the most secure ways to store your cryptocurrency is a hardware wallet, such as Trezor.

You can also offload your funds to cold storage. This could either be a paper wallet—literally a lump of paper with an address, keys, and a QR code—or a hardware wallet, such as Trezor or Ledger, both of which work with numerous cryptocurrencies. Hardware wallets come with their own set of instructions, and creating a paper wallet goes beyond the scope of this text, but you’ll find excellent tutorials online.

Keeping your funds offline makes them safe from hackers. But you’re susceptible to other issues; a fire could gulp your paper wallet, and a flood could demolish your hardware wallet. In absolutely all cases, this is paramount: Have a backup.

But I want to do stuff with my crypto!

Perhaps you’re not interested in saving or trading cryptocurrencies; you want to be an active part of the ecosystem. Things get a bit complicated here, as each cryptocurrency is different. With Bitcoin, you can buy stuff at numerous online (and even some offline) stores. Overstock, Steam, and Microsoft all accept Bitcoin in some capacity.

For newcomers, this is impractical, as most retailers that accept BTC also accept regular old cash, so converting your money to BTC just to buy something doesn’t make much sense. But there are use cases for spending BTC in stores. Say you bought bitcoin a few years ago—you could be a millionaire right now, and you might want to spent some of that money. You can also send BTC to another user without an intermediary (this is what makes BTC fine).

Ethereum, presently the 2nd largest cryptocurrency in terms of market value, is different. Since Ethereum is more of a platform for decentralized applications and less of a payment system (it works as both, tho’), you’ll need ETH to participate in token sales, and to build your own apps on the platform.

Regardless of your intent, the same logic applies. Keep the crypto that you won’t need for a while in a secure wallet, a vault, or cold storage. And keep a separate wallet with a portion of your overall funds—perhaps a mobile one—for those daily transactions.

I’m a crypto god now, right?

While the above might be a lot to gulp for an absolute newcomer, there’s a lot more to learn about cryptocurrencies. And as we said before, each cryptocurrency is a little different; they’re permanently evolving, to say nothing of the fresh ones regularly popping up.

Read FAQs and terms & conditions documents for each service you use.

Above, you’ve got different options for buying your very first bitcoin or bit of ether, options for storing them, and options for spending them. But again: It’s your money. You’re gonna want to be covered. Do your best to read the FAQs and terms & conditions documents for each service you use.

Hidden fees and caveats of all sorts are possible. Most cryptocurrencies are decentralized by nature, but most apps that simplify the process of buying, selling and wielding crypto are centralized, and you’re coerced to depend on the intentions and capabilities of the people who maintain them. For example, Coinbase has thresholds on how much money you can spend in a certain time framework; there’s also a limit on how much you can hold in your account at any given time.

Mistakes are also possible. It’s not hard to lose bitcoin by sending it somewhere and simply leaving behind where. You’ll be able to see the address and the transaction on the blockchain, but may not have access to the keys to retrieve it.

The best way to keep your BTC, ETH, and other cryptos safe is to educate yourself; read, re-read and learn until you truly know what’s happening before you click a button.

Trading cryptocurrencies may have tax implications depending on where you live. It might be a good option to talk to your bank or tax advisor before doing any of the above.

Eventually, the standard disclaimer applies: Never put funds in risky assets if you’re not ready to lose them.

Disclosure: The author of this text wields, or has recently possessed, a number of cryptocurrencies, including BTC and ETH.

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