Welcome to this basic guide on how to start your journey with cryptocurrency. This is not financial advice material. The aim is just to share some basic knowledge on cryptocurrency and how to start acquiring, saving and investing in crypto.
Many people are interested in these digital innovations but struggle to catch up with the rapid improvements in these technologies. Crypto can help you trade in the digital space and also grow your wealth, especially when you are in a country that has limited investment opportunities or complex financial policies that restricts investment opportunities.
What is Cryptocurrency (crypto)?
This is a digital currency that can be used as money/medium of exchange for goods and services. Crypto is virtual money, it is often referred to as coins. It’s only difference with contemporary money is that you can’t touch/feel it.
Take crypto as your electronic/virtual version of Dalasi (GMD), United States Dollar (USD), Great Britain Pound (GBP), EURO (EUR), Leones (SLL) etc . There are many coins out there, some examples of Crypto are Bitcoin (BTC), Ethereum (ETH), Litecoin (LTC), etc.
How does it work?
Crypto works on a Blockchain – which is a virtual distributed ledger that records and manages crypto transactions. This Blockchain is built on a consensus algorithm that is autonomous and decentralized. Meaning there’s no central authority (Central Bank) that issues/manage this ledger. The below images sums up how crypto works.
Image source: https://mlsdev.com/blog/how-to-create-your-own-cryptocurrency
Image source: https://blockgeeks.com/guides/what-is-cryptocurrency/
How to start using crypto.
Anyone with access to the internet can get into cryptocurrency. Here are a few steps you can follow to acquire crypto and start saving/investing using cryptocurrency.
Step 1: Wallet
Money is kept in wallets, Bank accounts, pockets, etc. to acquire crypto, you need to get a wallet. Wallets are digital Bank accounts, pockets, etc that help you store your coins (cryptocurrencies). There are different crypto companies that offer wallet services. Some are secured, some not and some scams and ruins. Be cautious!
Step 2: Buying Crypto
After setting up your wallet, the next thing you’ll want to do is to fund your wallet. You can fund your wallet via an exchange or from person to person (P2P). Binance is already an exchange hosting your wallet. You can buy/sell coins on Binance directly with your debit/credit card and you can also buy from other crypto exchanges or dealers. Similar to how you’ll buy USD against your local currency, you’ll get a quote and agree on a rate to transact. The beauty of these trades is that you don’t have to queue for availability.
Please take great care when funding or withdrawing from your wallets. There are different wallet addresses (i.e account numbers sort of) for the different coins. Making an error on the wallet address means you’ve lost your money. Remember it’s Blockchain that is autonomous and decentralized.
Step 3: Save/invest your Crypto
Once your wallet is funded, you can either start investing or just hold your coins in your wallet (i.e savings). There are various investment platforms to invest your crypto with, but be careful who you trust. Some are legit others are scams. Trek wisely.
There are many Crypto investment firms, however, do more research on them before you start investing. Note, Investments comes with risks so learn more about how these investment firms work before you invest.
About the Author
Pa Malick Bah is a Treasury specialist who loves data analysis and technology innovations.
Thanks for reading, and good luck with the opportunities presented by cryptocurrency. You can reach the author on email: Lickasette(@)icloud.com