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Rapid Transit

A Bitcoin and Crypto Primer: Part 2
January 8, 2018, 8:51 am

Read Part 1

So you have a vague idea of what Bitcoin and other Cryptocurrencies are. So now you want to buy some, but how?

What is an exchange?

Exchanges are the place to go to do one of two things. You can either place an order into or out of your fiat currency (government issued currencies), or you can trade cryptos between each other. Exchanges are the stock market of crypto.

Whereas Cryptocurrency creation and use is unregulated in the best way, exchanges are unregulated in the worst way. The exchanges are where trades happen, prices change, and the incredible volatility of Bitcoin is birthed. I'm sure that you've read or heard that Bitcoin is a volatile, speculative, market. And you're right, but not because of bitcoin itself. It is because on the crypto exchanges, the price is always moving. Because there is no regulation for these exchanges, sometimes big players can come in and splash the pot around, and sometimes a million average joes come in and make weird moves.

But exchanges are also the only way to move from currency to currency at the moment. So they are a necessary evil. Anyone can become a miner, and begin to slowly accrue a small amount of many coins. But for most people, the way to get in to crypto is to buy on an exchange.

What exchange should I use?

This question largely deals with personal need, personal use, and availability. There are quite a number of exchanges out there. There are whole sites dedicated to just listing exchanges. But generally, you might want to do those two main things, move fiat in and out, or exchange between cryptos. Actually, you'll probably find those two tasks happen on different exchanges.

Fair warning, many of the upcoming links are referral links. Sign up for what you want, and don't just take my word for it. Honestly, it's so hard to give suggestions to people without feeling a tiny bit responsible for their money. I'm honestly just trying to help, and if you sign up with these links, you help me back.

CoinBase.com is a major US exchange for USD to crypto. It has an easy interface, a nice design, and you can exchange USD for a few common cryptos. A couple things to know about this market; it takes about a week for any USD transfer to finalize on the exchange, so don't be surprised when you can't make any other moves for a while. Just hold tight and wait it out. Gdax.com is the more proper exchange for those coins, once you've purchased some from CoinBase. They are two sides of the same company.

Binance.com is a Chinese based exchange that is one of the most popular for trading a large amount of different cryptocurrencies between each other. As of this writing, Binance has limited new signups to random times throughout the day. Binance has a very good App on both iOS and Android, although because of the a number of things, you have to download their app directly and allow it as a trusted developer. It's up to you to make or not make this decision, but understand that a little trust is the price to pay for getting into these unregulated markets.

Kucoin.com is an exchange that looks nearly identically skinned from binance on their website, but their app is different in a number of ways and this exchange has different coins available.

Cryptopia.co.nz is a very large exchange with a huge amount of coins for trading, but they don't have a mobile app, and they are quite complicated as a starting point.

Gemini.com is another option for fiat conversion, but they can be quite slow in their approval process.

Which Crypto Coins should I buy?

I mean, this is definitely not a question with a good answer. Most people's first intro to this space is the coinbase interface, and upon opening that app, you'll be greeted, currently, by four different coins. Bitcoin, Bcash, Ethereum, and Litecoin. Which coin you want to buy is entirely up to you. Most investors would say that the key to long term success is diversification. So perhaps a small amount into each, or a couple, would be a good place to start.

Do I have to buy a whole Bitcoin?

Not at all. Bitcoins, and other cryptocurrencies can be broken down into smaller increments, just like dollars can be broken into cents. 1.0 BTC is one Bitcoin. 0.0001 BTC is one Bit. 0.00000001 BTC is known as one Satoshi. That's four and eight digits to the right of the decimal place.

Now some exchanges do require a minimum amount of exchange between any particular currency, often times equaling out to at least 10 USD worth. But you don't have to spend 15,000 USD to get into cryptocurrency. You can spend 100 USD to purchase about 0.006 BTC. You don't have to purchase in terms of whole coins, you can purchase in terms of initial investment.


To be continued....

Part 1

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