Essential Information on CryptoCurrency and a Some Useful Resources
Here are some cryptocurrency resources for those getting started with cryptocurrency.
The Essentials: To use cryptocurrency you need a wallet and you need a way to buy/sell coins. Once you have “coins” (aka crypto) you can trade those for other coins (either on an exchange like GDAX or via a program like ShapeShift).
The Top 10 Coins By market cap: If you are new to crypto, you probably want to focus on the top 10 coins by market cap. To keep track of these, go to CoinMarketCap.com.
Coinbase/GDAX: Coinbase is a digital wallet / broker you can buy Bitcoin, Litecoin, and Ethereum from. GDAX is a traditional exchange operated by Coinbase where you can trade USD for Bitcoin, Litecoin, and Ethereum’s Ether (and trade Bitcoin for Ether and Litecoin). This is a good first step for someone new to cryptocurrency. Other top exchanges include Bittrex and Kraken, but none are perhaps as beginner friendly and widely used in the U.S. as Coinbase/GDAX.
Cryptocurrency wallets: We typically suggest using an official (or officially endorsed) wallet for any given coin. So, for Bitcoin we would suggest using the Bitcoin Core Wallet, for Litecoin we would suggest Litecoin-QT, and for Ethereum we would suggest either Ethereum Wallet or MyEtherWallet.
Figuring out what block we are at: With bitcoin, you can use BlockExplorer to find out what transaction block is the current block (this is helpful to know for forks). Same general thing goes for each coin, Google “current block for [coin name]” NOTE: A blockchain is a ledger of transactions organized by “blocks” of transactions. A fork is when a blockchain splits and creates two unique chains (and often coins).
Mining: If you want to “mine coins” you need a mining rig and likely will want to join a mining pool. Being a miner is a bit like a mix between running computer software and being an accountant. Learn about mining.
Taxes: In general, and especially with crypto used for investment, cryptocurrency is treated as an investment property. The implications of this aren’t that simple. Further, there are a bunch of tax guidelines and regulations to know on a state and federal level. Learn more about cryptocurrency and taxes.
Keeping up with the news: Aside from reading our site, you can keep up on the news on crypto with longstanding publications like CoinDesk and CoinTelegraph. Further, you can follow smart crypto folk like Charlie Lee (of Litecoin) and Vitalik Buterin (of Ethereum) on social media. Further, you can join crypto groups on social media (just don’t let them pump you full of mania).
Keep cool, avoid mania: If you don’t know the history of bubbles and the basics of how currency, assets, and investing work, or if you aren’t a seasoned investor, try not to buy into this idea that crypto will go up forever. Its a risky space for investing and some coins aren’t that amazing as every day payments systems (i.e. crypto is magical in a way… but we aren’t dealing with literal magic beans). At least read up on the basics of investing and the history of economic bubbles.
White papers and ICOs: When a new coin comes out it generally releases a “white paper” this is like the sales pitch. ICOs are new coins used for crowd funding. If you want to invest in an ICO or new coin in general, read the white paper and know the risks (the top coins by market cap are generally less risky than new coins; plus some ICOs are scams). With that in mind, generally be aware of scams (crypto is a somewhat unregulated space).
Nothing in life is free: With crypto hard forks can produce free coins, and early access to ICOs can result in crazy growth… but there is always a trade-off. Just generally, crypto is a bit like the Wild West, avoid deals that seem too good to be true. There is often, but not always, a catch.