Complete Crypto Guide for Beginners

Complete Crypto Guide for Beginners

 This guide is meant for people who have never invested in Crypto currencies before but are interested in getting started. In this guide we will be going through the basic process of purchasing, trading and storing Crypto Currency in a secure and efficient manner. The purchasing of Crypto Currency for national Currency is in this guide mainly intended towards people who live in Sweden since the service we’ll be using only accepts Swedish Kronor, but if you live somewhere else I’m sure you’ll be able to find a similar company that accepts your national Currency. We will start off the guide by purchasing the Crypto Currency Ether, but you will be able to trade this into something else later on in the guide if you so wish.

Just a disclaimer before we begin; this is not professional investment advice, just tips of best practices from my own personal experience. Do not invest money you are not willing to loose.

Setting up a wallet

As we will be purchasing Ether, we will first need an Ether wallet. In this guide we will be creating the wallet on Myetherwallet.com. As you enter the site for the first time, you will see a popup, I recommend that you read it all the way through. 

It explains that the website is not a bank, it’s just an interface to allow you to manage your coins on the blockchain. What this means is that they do not store any information of the wallets created, so if you loose your wallet information they will not be able to recover it for you. After you’ve read the information it’s time to actually create the wallet. You do this by entering a password for your wallet on the front page, make sure you’re using a strong password. On the next step it gives you a link to download your wallet as a Keystore file. 

It tells you that if you loose it you wont be able to get it back, it is however possible to download it later on if you have access to your private key. On the next step your private key will be displayed. What I would recommend that you do is to save it to a text file and put it into an encrypted 7-zip archive, and of course use a strong password here too. You will be able to put more keys for different wallets into this archive later on. Save this archive into multiple locations (usb-drive, desktop computer, etc.). 

There’s also the option to print out a paper wallet, but of course this is not encrypted so keeping it out in the open is a security risk. If you own a safe and you are extra paranoid you could laminate a paper wallet and put it into the safe, but that might be overkill. You can now view your wallet information by either using your Keystore or your Private Key. I would recommend using your Keystore as it’s easier to use, since your private key is encrypted in it with the password you entered during the creation process. Just make sure you don’t forget the password of your encrypted archive containing your private key. After you’ve decrypted the wallet you will be able to see your public key/address and your private key.

Private key and a Public key

So what’s the difference between a private key and a public key? As an analogy, imagine your public key as your home address and your private key as the key to your front door. People can send stuff to your home address, but they wont be able to take anything from you with just that information. Just as you wouldn’t give your home key to a stranger, you should never give your private key to anybody who is not you. So basically, a private key is needed to send from your wallet, and a public key is used to send to your wallet. As was said earlier in this chapter, if you loose access to your private key, you will loose all access to your Currency. There is no locksmith to help you out if you lock yourself out.

 Buying Crypto Currency

Now that we have a wallet set up it’s time to buy some Crypto Currency. As we set up an Ether wallet, we’ll need to buy some Ether. Try to look up a trusted company in your area that accepts your local Currency and we use Changelly. Go www.changelly.com and place order After you have placed the order and sent the money according to the instructions given on the website you should see your Ether in your wallet on myetherwallet.com within 30 minutes. Congratulations, you’re now the proud owner of your first Crypto Currency. As you might have noticed, there were only two choices for the Crypto Currency for purchase through this service, does this mean that there are only two Crypto Currencies? Of course not, if we go to coinmarketcap.com we can see that they have over a thousand listed currencies on there. On the next section we will go through the process of changing some of our Ether into one of these other currencies.

Using an exchange

So let’s say you’ve heard great things about LiteCoin and now want to invest in it, but you can’t purchase it with your national Currency. What do we do? What we should do first is open up the LiteCoin entry on coinmarketcap. The Charts tab will be active by default, which will how LiteCoin has performed in the past, this is pretty useful information when making the decision to invest in a Crypto Currency. What we want to do is to change to the Markets tab on the page. This gives us a list of exchanges that this Currency is available in. As it happens, LiteCoin is available on the Binance exchange which we will be using in this guide to trade some of our Ether to LiteCoin. To start off, you’ll need to create an account on Binance.com. Make sure to enable Two-Factor Authentication to prevent your account from being compromised. For Binance Complete Setup See My Post Binance Crypto Exchange Review

 So if you decide to change some of your Ether to LiteCoin, the first thing you’ll need to do is to send over some of your Ether to your wallet on the exchange. On the deposits page on Binance you have a deposit address, it is here you’ll need to send your Ether that you want to trade. You can send your Ether on the myetherwallet site. The Ether should arrive in your Binance wallet within 30 minutes. Now that you have Ether in your wallet it’s time to actually get to trading. Now do as in the video, go to the exchange tab, change to the LTC/ETH view, and trade some of your Ether. When the trade succeeds you should have the LiteCoin displayed in your exchange wallet. Congratulations, you just completed your first trade. Now you could keep your Crypto Currencies on the exchange, but this is not considered good practice since there has been incidents of exchanges getting hacked before and people loosing their Currency as a result. This is why we will be sending back our Currency to a private wallet. Depending on the Currency you chose to acquire, you will need a specific wallet for it. A good place to find an appropriate wallet is on the official website for the Currency. Assuming that you chose to turn your Ether into LiteCoin as in the example, then a good choice for a wallet is the Electrum wallet for LiteCoin. The setup process for creating a new wallet will resemble the creation process for creating the Ether wallet. Although, instead of storing the private key directly, you will be storing a recovery phrase that is a sequence of 12 words. This sequence can be used to restore your wallet if you ever loose it, so keep it safe. Other currencies often have very similar setup processes. There is one exception that can confuse some people, it’s that some currencies (like Request Network) don’t actually have their own blockchain, but are so called ERC20 tokens which use the Ethereum blockchain. In that case you will be sending these to your Ether wallet address. When you have set up your receiving address you just use the withdraw button on Binance and copy-paste your wallet address to transfer your Currency from the exchange into your own wallet. Great, now your Currency is safe and sound in your wallets, the only thing you need to do is wait and let the market do its thing.

Further tips

Now that you’ve got the basics down, there are some additional things that might interest you.

Hardware wallets

If you decide to invest a substantial amount of money into Crypto Currencies, then I would recommend you to get a hardware wallet such as the Ledger Nano S. A hardware wallet such as the Ledger supports many different Crypto Currencies, but it only requires you to store a single recovery phrase for all these wallets. It also provides very convenient Chrome Apps to interact with your wallet, where you can send and receive Crypto Currencies with just a few clicks. When the hardware wallet is not plugged into your computer then it’s powered off, so it’s safe from the outside world. A common misconception with hardware wallets is that people think that the Crypto Currencies are actually stored inside the hardware wallet, which is of course not correct. What hardware wallets do is that they store the keys for the wallets, the coins are in the Blockchain as always. This means that as long as you have your recovery phrase safe then you will be able to restore your hardware wallet if you would loose or break your current one.

Avoid scams

Unfortunately, when there’s money in play there will always be people trying to take advantage of others. The best way to avoid getting scammed is experience and rational thought. Here are some common tactics scammers use to try to trick people out of their Crypto Currency:

Phising sites — 

There are some websites that try to impersonate legit sites. For example there might be a site example.com which would be completely legit, and a phising site that looks pretty much identical but they have the URL exampĺe.com. The phising site might then collect the information a user enters, such as private keys. If you’re in a hurry it might be hard to spot the difference between the sites. These can sometimes be found as the top results in Google searches as paid advertisements. I recommend that you use an adblocker such as uBlock Origin to avoid such links. Another way to avoid such links is to bookmark the legit sites so that there’s no way for you to press the wrong link. MyEtherWallet has an extension that warns you if it detects that you have clicked on a known phising version of their site. Fake seed generators — Some Crypto Currencies require you to generate your own seeds. You should never use online versions of these seed generators since there have been known cases of scammers saving the generated seeds, after which they empty the wallet once Currency has been inserted. Fake airdrops — Airdrops are basically giveaways of free tokens that sometimes happen for different Crypto Currencies. However, scammers sometimes take the opportunity to create fake airdrops where they ask for a user’s private wallet key before the user can receive their reward. Remember: nobody should ever ask you for your private key, the private key is only for you. Never trust airdrops that have not been announced by the official developers or some trusted entity.

But don’t let this scare you off. Just keep a level head, invest rationally and you’ll be fine. If something seems too good to be true, it probably is.

Happy trading.

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