Home > Article > The Get It Done In An Hour Guide To Cryptocurrencies Step by step guides to understanding buying and storing popular

The Get It Done In An Hour Guide To Cryptocurrencies Step by step guides to understanding buying and storing popular

Copyright 2018 Nick KingFirst published in september 2018All rights reserved No part of this publicatibe reproduced, distributed orcluding photocopying, recording orther electronic or mechanicallods, without ththe publisher, except in the case of brief quotations embodiedtical revied certain other noncommercial uses permitted by copyright lawDisclaimerDO NOT BASE ANY INVESTMENT DECISION UPON ANY MATERIALS FOUND IN THISBOOK, The author is not registered as an investment adviser either with the US Securitiesommission(the"SEC )or with the U

K Financial Conduct Authorityhe author is neither licensed nor qualified to provide investment adviceThis book ised as investment adviceemendationcourse of action or as an endorsement of cryptocurrency or any specificinformation or othematerial asprofessional and/oradvicemprehensive or compleand risks associatedwith the use of any information or other content in this book before making any decisionsaim for damages arising from any decision youlake based on information or other content made availabu through this bookThe information ind toarantee the accuracy or completeness of any information in this book Any opinionsthis book may be wrong and may change at any timenould always carry out yourindependent verification of facts and data before making any investment decisionsCryptocurrencies are speculative and complex, and they involve significant risks-they areerformance is no guarantee of future performance Loss of principal is possible and pasthighly volatile and sensitive to secondary activity, Performance is unpredictabConsider your own circrequirements) and consult the relevant regulators websites before making any decisioncrypAll producttrademarks, brands, photographs and logose the property of their respective

allows for anonymous transactionsThis just isn't trueure, you can set up an anonymous Bitcoin wallet and receive acoin from a stranger, and to an outside observer it would appear tout that transaction will be recorded on the blockchain -andanyone can see it Specialist companies can follow the trail ofBitcoin transactions using analysis software and other online,public clues, which can enable them to link transactions to realdentitiesere are privacy cryptocurrencies, such as Monera and Zcashthat use special technology to anonymize a user's transactions

Buttheyre still vulnerable to someone matching transaction timestamps to real-world events, such as buying something online orselling coins for cash, which in turn can reveal a users identitCryptocurrencies are not regulated (sort of)Loose and sometimes non-existent regulation of cryptocurrencykets has led seto refer to them as the wild westDifferent countries have different laws and diffettitudestowards crypto Japan and South Korea havee embracecryptocurrency trading by drafting laws to regulate the marketCch as China and India have swung in the oppositedirection, all but banning their citizens from (legally) investingIn cryptocurrenciesOnly one things for sure: more regulation is comingvalue of the crypto markets will force governmentulate it-in part to protect investors, inpart to make sure they get their slice of the pie

3Good habits of asmart investorvest smart, invest safeThis might be your first time investing in anything that isnt asavings account, or you might already be a savvy buyer of bondand stocksbe sure your crypto investing is done in a smart and secure waye tempted to overinvestThe smart investors golden rule isNever invest what you can t afford to lose

As temptingof the future riches aestmin your favorite coin could net you, also consider the worst-casescenario: the price of your coin crashes to nothingw will your life be affected? Will you laugh and write it off asa lesson learned? Will you find it mentally difficult to cope withlosing that sum of money? will you struggle to pay your

te it on a piece of paper and stick it to your fridge Chantyourself in the bathroom mirror Whatever it takes, just make sureNever invest what you cant afford to loseDon't borrow to invests a terrible idea to borrow money to invest in anything even ifyou re convinced the price is about to shoot upBecause what's worse than making a bad investment?Making a bad investment and being in debt because ofDo your own researche cryptocurrency markets are rampant with people desperateconvince you to buy a certain coin--because if they get enougheople to buy, the price of the coin will rise, and so will the value oftheir own investmentThey'll try to manipulate you with fake news stories, fabricatedcements, and dreamednalysis to show that the coin isMoon To experiencen:Theyluseincrease in valueReddit, messageboards and blogs to spread theiDvertising Spreading buzzshilling As a result, when youthe pretense of sincerity

adedcryptocurrency investments, you need to question itIs this statement true? Is it being reported by numerous sources?Why would this person be telling me this? HeThis is where your own research comes in Search for news Rootsk questions Listen, and form your ownopinions And only then should you feel comfortable to invest

Because no one is going to be looking out for you and your moneyexcept yourselfust as in traditional investments, it's not a good idea to go all-inon one single thingOver the years coins have soared in price, and coins have tanked Ifyou re unlucky enough to invest in a project that fails and you wereall-in the impact on your investment could be devastating

consider keeping a portfolio of at least several coins so thathe failure of any one won't mean losing all of your investmentIvest based on emotionsou might fall in love with the idea of a coin; maybe the teamattempting to solve a problem that you're passionate about, maybits marketing makes you laugh, or maybe you' re just really keen ohe nameThen again, you might be experiencing ' FOMO' because the pricejust started shootingafraid toopportunity for pThese kinds of emotional investmeare a terrible ideaThat price explosion might have been then sellingins whilecaused by a fake rumor flying around to dropthe price is high, causing the priceTwitter, or a pump and dump'groutrying to lure you in Without takingstep back and doing your research, you just wont know, not untilts too lateo try to practice emotional detachment when you're deciding onwhich coins to inveand cold, hard

Don't neglect your computer's securityones are vulneramacEmail accounts get hacked, credit card numbers are stolenbrities find their embarrassing photos leaked onto the internetHalf the time, hackers do such things for fun -so imagine theadded incentive when they can do it for profitCryptocurrencies are a hackers dream If hackers can penetrate anunsuspecting crypto investor's computer, they can steal their coinsand sell them for cash quickly and easilyThis is why you have to be deadly serious about keeping yourcomputer and phone secureUse a modern and secure web browseMy recommendation is Google Chrome, which is constantly andautomatically updated against the latest known security threatsYou can download chrome herehttps://wwwgoogle

com/chromeHave up-to-date virus and malware protectioner with software that scans for malware andviruses Mdation is Bitdefender, which is regarded as aarket leader in home computer security software Here's a quicklink to the official download sitehttps://getcryptoinfo/bitdefenderBe sure you're on a genuine websiteDid you just go to the above URL? If you did, you'll see that itickly and easily forwarded you to the official Bitdefenc

Which is fine, because you can trust me I won't send you to adodgy website that's going to steal your passwords, right?Wrong! When it comes to your computer security, dont takeThere are scammers who clone a real website buy a similardomain name and then fool users into using their login detailson the fake site the scammers then use those details to steal theuser's identities or funds on the real siteSo if you havent already, download and install Chrome, then use itPay attention to what's happening in your browserYou'll see that you re forwarded to the official Bitdefender websiteBut how can you be sure? Let's take a look at how you canB Bitdefender UK-Cyberse x6caSecurehttps://wwwbitdefenderco

ukyou can seeChrome is letting you know the site'ssecurity certificate corresponds to its beingedomain name, by displaying a greerweb browserpadlock and the word'SecureB Bitdefender UK- Cyber→CowwwbitdefEndercoukit didnt, you'd see the above A website without a security

certificate shouldnt be trusted with sensitive informationB Bitdefender UK -Cybers→c·Securehttps:/wwwbitdefendercoukSo how about this site? It has the padlock, so it looks safeWrongLook at the deagain What looks perfectly legit at firstglance becomes obvious with a second-there's a small dot abovethe letter bBy abusing the quirks of the Latin alphabet, scammers can registedomain names that look almost identical to the real thing

Theyly a security certificate totheir fakeromote their site in the hopes that unsuspecting users will useheir login data for the genuine siteB Bitdefender UK-Cyberse x∈)c·Securehttps:/wwwbitdefandercoukAnd here's another example, featuring an easy-to-miss spellingchangeThese simple methods of fooling people have made scammersa lot ofay aware of where your web browsepointing, andbecome the next victimBe aware of scamsyou get an email from anyone offering to share his Bitcoinfortune withdelete it It's a scam

If you get a phone call from the tax office, and they threaten youwith legal action unless you immediately send them Bitcoin-pis a scamAlong with faking websites, scammers will continue dreaming uplew ways to try to steal your crypto, by tricking you, promoting fakecontests, creating Ponzi and pyramid schemes the list is endlesRemember-if something looks too good to be true, it usuallyFor instance, a scam has spread across social media networks,especially on Twitter, that involves promoting 'contests that offerto double, triple, even quadruple a user's crypto-they just have tosend their coins to an address and get sent the free co

ins backounds great? Well yeah, because it's a total scam

One that preyson the average persons naivety and greeHere's an example"5000Note the display name-Binance--that this Tweet was postedunder

Binance is a real cryptocurrency exchange However, its reaTwitter handle is @binance, not @binence That's a solid indicationat this is a scam, but easy to miss if you dont know what to lookScammers also use armies of fake Twitter accounts to like and retweet their scams to make them seem authentic and popularDont download or install software with an uncertain backgroundYou re less at risk if you' ve installed a virus and malware protectorsuch as Bitdefender as it will block a lot of threats, but you stillleed to stay smart when installing programs downloaded fromYou might be tempted to install a pirated game or programdownloaded from a Torrent website, but hackers routihese to corrupt computers with malware, allowing them to hijackpeoples cryptocurrency transactions or steal from their wallet

And if you get an email from a stranger urging you to open anattachment, delete it It's probably malware

4Buying your firstcryptocurrencyStep-by-step guides to buyingBitcoin and ethereumote: There are potential tax implications when it comes toelling the cryptocurrencies bought in this chapter

See chapter3 for more detailsAnd now we get to the part of the book you picked it up forBy now you' ve gained an understanding of the theories andtechnology behind cryptocurrencies, of how a smart investorthinks and how to keep your crypto safe, so you're ready to takewnership of some real-life cos a thrilling experience to use an emerging technology that theaverage person barely comprehends-but it's also confusingEarly adopters learned how to buy and use cryptocurrencies byrial and error-and thats a messy experience Thankfully now

Contentsat s crypte9 A new type of investmen12 Good habits of a smart investo20 Buying your first cryptocurrency47 Storing your crypto54 Setting up a Bitcoin wallet66 Setting up an ethereum wallet0 Finding more coins to invest in94 Research in action113 Buying altcoins35 Monitoring your investmen37 Selling your coins144 Tax implications

So what's crypto?The concepts and technologies behind crypto arecomplex: this explanation isnt

You ve heard of bitcoIt's that computer currency that people began talking about as itsprice seemed to explode overnight, turning a bunch of geeks intoinstant millionairesDepending on whom you ask, Bitcoin is either the beginninghnological revolution, a Ponzi scheme, the key to financialfreedom from banks or historys greatest scamAmid the technobabble the sensationalist headlines and thidealism of crypto fanatics, it might seem like Bitcoin defiesreasonable descriptionBitcoin, along with most other cryptocurrencies, can besummarized in lust oneple sentenceA cryptocurrency is a digital asset stored on a decentralized andcryptographically secure blockchain

Okay, I'll admit it's not that simple, and it's stuffed with buzzworder bothered to googleSo lets break it downAn asset is an item owned by a person Like a spoonA cryptocurrency coin is an asset But unlike a spoon, it isnphysical-there are no real-world coins to jingle in your pocket

A cryptocurrency coin is formed of information stored on acomputeThis digital information, which details the owner of every coind the transactions they have made, is stored in a special kind ofdatabase called a blockchainIt's similar to how your bank manages a compule ctured data held onyour bank account: when you deposoney, your bank updates a database to show a transfer to yourccount and updates your balance to reflect ita blockchain works the same way: when you buy a cryptocurrencycoin, your account on the blockchain(commonly referred to as awallet) will show a transfer into it, and will updaBut there's a key difference between your bank's database and ablockchainbank might go off-line because a freak storm cutspower to its data center, or a hacker shuts down its systemsa blockchain is stored onds of computers across theworld, all connected by the internet, making it extremely resistantailure This is called decentralizationut having a database spread across the world sounds prettyecure,right? What if someone decides to hack it and givethemselves a zillion coins?That's where cryptography comes into play

Cryptography means disguising and revealing(encrypting anddecrypting) information using complex mathematicsMind-boggling, I know, but all we need to understand is thatcryptography makes it virtually impossible for the informationentered on to a blockchain to be falsified that decentralizeddatabase is hellishly secureyptocurrencies sound neat but why bother with themCash and bank accounts work fine, right?offer some perspective as to why cryptocurrencies were evenconceived of and the problems they aim to solve, lets take a dipinto recent historyIn the 2000s, bankers were so hungry for commission that theysued mortgages to people who couldn't really afford to pay themback, and then resold packages of those mortgages as securities toinvestors and other banksgoing up, but by 2008 the property bubble had popped andThis house of cards stood fine while the price of property wathose mortgages and securities went bad, triggering a worldwidecession that forced millions of pBanks started going bankrupt and theA period of economicvorld's entire financial system was on declinehe verge of collapseCentral bank A national bank thUnfortunately, instead of addressingand dealing with the fraud andcorruption in the world's financial institutions that brought aboutthis disaster, central banks instead chose to expand their balancets,otherwise known as 'money printing, to bail the banks outof their debt problemshere wasnt any actual physical money printed-it was simpumbers added to and shuffled between databases the banks

were loaned this new money and used it to ride out the crisis, whileordinary people suffered from the economic falloutWith this inequality in mind, a man(or group of people, sinces still a mystery) named Satoshi Nakamoto conceived of anexperiment-to create a currency free from central-bank meddlinga currency free from self-enriching manipulationThe first and most famous of cryptocurrencies, Bitcoin, was bornBitcoin needs no central authority or bank to operate, instrelying on peer-to-peer technology to manage transactions andsue coins What this means in action is that no one has controlins but yourself Thno need to trust a third party (e

ga bank that can go bust) with yourmoneNobody owns or controls Bitcoin, and open-source Software for whicthe open-source code that powers it is available to everyoneavailable for anyone to view and audit Code/ The instructions that power aBut don t start to think bitcoin is aerfect or finished product It hached aftertechnical challenges to overcome soBitcoinatit can sd have speedy transactions To that end, the bitcoin codebeing actively worked on by hundreds of developers, dedicated toimproving its features, security and speede growing popularity of Bitcoin has given rise to the creation ofmore cryptocurrencies referred to as ' altcoinsMost altcoins embrace the following principlesSecurity through blockchain and decentralizationEach and every transaction of a cryptocurrency gets stored

on thousands of servers around the world creating a robustdecentralized systemOpenness and transparencyOpen-source code provides trust in the system People can becorrupted but code obeys cold, hardImmutabilitySecurity and transparency combine to make it effectivelyimpossible for someone to hack the transaction history of acryptocurrencyAccessibilityAll thats required to send and receive cryptocurrencies, anywherein the world, is a device capable of accessing the internet

SpeedBank transfers can take days Cryptocurrency transfers can bestantaneous or take minutes, depending on the currency used■CosInknow that you have to pay a fee to convert it from one currency toSending cryptocurrencies to another country requires noconversion fee it's all done across the internet and the internetdoesnt care about countries and borde

A new type ofinvestmentWhat cryptocurrencies areand what theyre notCryptocurrencies are unlike any otherbefore, and their unique characteristics have led to confusion andmisconceptions about just what these digital assets representCryptocurrencies are not stocks or sharesBuying a stock or share is like buying a tiny part of a companyand usually entitles you to a dividend and voting rights over acompany s plans

DividendBuying a cryptocurrency doesnte you to either of these thingor instance, owning a Bitcoin wont earn you any futureBitcoin dividends, and it doesn' t give you any say over how thedevelopment of the coin proceedsCryptocurrencies are a speculative investmentThe popularity of cryptocurrencies may be exploding, but they are

not yet ready for mainstream adoptionSolutions to technical challenges, such as howscale theechnology to keep it stable as its use grows, are still beingsearched and developede technology holds great promise, but it's still a riskspeculative investmentCryptocurrency values are unpredictablemagine a gold coin It just sits there, a small, shiny circle of inertetal You cant eatcant drink it, you cant do much at awith it

So why would anyone assign value to it? wworthything?Because of our collective belief that it is worth somethingo if we all believe a gold coin is worth somethinghow much is it worthAs much as someone is willing to pay for ite with cryptocurrency A Bitcoin is worth somethionly because of the markets collective belief that it has value AndIt's worth exactly what someone at that moment is willing to paywhend downwhen more people want to sellfrom moment to moment for seemingly no reason In the changingThis means the price of crypthe same day, it can go to the moon and to the floors vital to be aware and respectful of this unpredictabilityCryptocurrencies are not anonymouOne of the misconceptions that dog bitcoin is the belief that it