Before investing in any cryptocurrency, it is important to understand the technology behind it. Cryptocurrency is a very new technology, which makes it very volatile, so do not invest more money than you can afford to lose.
Cryptocurrency can be obtained in two ways: mining and purchasing. For 99% of people, I would reccomend purchasing from an exchange, but for those of you that would like to mine, check out our cryptocurrency mining guide.
After mining or purchasing cryptocurrency, it is important to have a secure cryptocurrency wallet to store your coins. Cryptocurrency wallets are an interface that allows you to store coins securely, and interact with the network.
Fiat exchanges such as Coinbase allow you to enter the cryptocurrency world by trading your $, Euros, for cryptocurrencies such as Bitcoin, Ethereum and Litecoin. After using a fiat exchange, you can then send your cryptocurrency to a crypto-crypto exchange, where hundreds of other cryptocurrencies are sold. It is difficult for fiat exchanges to obtain licenses for certain cryptocurrencies, so that is why more coins are available on crypto-crypto exchanges.
Crypto to Crypto Exchanges (C2C)
C2C exchanges allow you to exchange Bitcoin and Ethereum for hundreds of other cryptocurrencies such as Monero, Ripple and Dash. This includes exchanges like Binance and Bittrex. In order to send cryptocurrency to a C2C exchange, you must locate that exchanges deposit address.
For example on Binance, deposit addresses are located under the funds tab. Depending on what cryptocurrnecy you are trying to deposit, you will want to search for that coins address. This address is unique to each person.
After sending money to an exchange, you will most likely want to buy cryptocurrency. At first, this can be scary, as you may have never seen an orderbook or price chart before.
Let’s start by explained the black box area. This is the trading pair you are currently on. In this case, we are trading Ripple against Bitcoin.
The yellow box, shows important information such as the last price Ripple was sold for (in bitcoin), its 24 hour change, as well as its high, low and volume for the past 24 hours. Volume is the amount of currency traded in certain time period.
The blue box shows the price chart, where the ratio of Ripple and Bitcoin is shown in an easy to understand way. The X axis has the dates while the Y axis has the ratio of the pair.
The red box, is the current order book, where people have entered the price they want to buy or sell Ripple at. The top part shows people who own Ripple, and want to sell it for Bitcoins, while the bottom part shows the people who want to buy Ripple, but currently own Bitcoin. All of the orders have not executed because the price agreement has not been met. The lowest offer to sell Ripple is at .00008046 Bitcoin per Ripple, while the highest offer to buy Ripple is at .00008396 Bitcoin per Ripple.
If you decide to enter your own order, you would do so in the brown box. In this area, you can enter information about your order, such as the ratio between the currencies you would like to buy/sell at, as well as the amount you want to buy or sell.
You can click the market tab, which will buy or sell at the current bid/ask in the order book. For beginners, I would reccomend using the market tab. If you feel comfortable using the limit tab, then use that as you can let the deals come to you.
Lastly, the green box is where you can view the past trades for the coin, and your past trades for the coin.
Ok, so now you have purchased cryptocurrency, and you want to keep it in a secure place, right? This is where the wallets come in. Search our cryptocurrency wallets page for the coin you purchased, to read setup guides for every wallet it can be stored on.
Web wallets are a way of storing your coins using a websites infrastructure. If coins are secured using a web wallet, it is important to know that the coins are not technically stored on the internet, but on a coins blockchain.
It has an easy to use interface that allows you to interact with the Ethereum network.
Hardware wallets are the most secure option for securing cryptocurrency, and come in many different shapes and sizes. The Ledger Nano S is the most popular, and has a wide selection of cryptocurrencies. Other options are Keepkey and Trezor.
Hardware wallets are more secure than desktop and web wallets as they are a form of cold storage. You private key is not exposed to the outside world. If you were to use a web or software wallet, your private key could be compromised by malware.
Software wallets can be applications on a computer, phone or other device that store your coins. They typically have easy to use interfaces and can store several coins. One of the most popular software wallets Exodus can stored decent amount of coins. If you are interested in mobile wallets, Eidoo is a great option too. It has an extremly large selection of coins, and great interface.