How To Get Started With Cryptocurrency

There are many options and opportunities.

As I’ve been writing more about cryptocurrencies and their importance in a world where governments are devaluing fiat currencies and robbing us of our earning power, some readers have emailed me asking how they can get started with cryptocurrencies.

So, I’ve put together this column with information, resources, and links that can help. (Note, this is not meant to be taken as official investment advice.)

What are cryptocurrencies?

The first question people new to cryptocurrencies have, is what they are.

Here’s how Investopedia describes them:

“A cryptocurrency is a digital or virtual currency that is secured by cryptography, which makes it nearly impossible to counterfeit or double-spend. Many cryptocurrencies are decentralized networks based on blockchain technology—a distributed ledger enforced by a disparate network of computers. A defining feature of cryptocurrencies is that they are generally not issued by any central authority, rendering them theoretically immune to government interference or manipulation.”

For those who value freedom, that last part is quite important. The more manipulative, centralized, and controlling governments become, the more important cryptocurrencies become.

What are the ‘biggest’ cryptocurrencies?

As of now, (November 7, 2021), these are the ten largest cryptocurrencies:

Market Capitalization (total value of circulating supply) in brackets

  1. Bitcoin ($1,175,559,364,503)
  2. Ethereum ($544,153,947,194)
  3. Binance Coin ($108,844,790,219)
  4. Solana ($75,817,749,285)
  5. Tether ($72,604,351,274)
  6. Cardano ($67,003,639,010)
  7. XRP ($57,149,966,171)
  8. Polkadot ($51,752,266,257)
  9. Dogecoin ($35,180,463,841)
  10. USD Coin ($34,328,820,333)

As you can see, Bitcoin and Ethereum are in a league of their own, so I will include further information on both of them.

What is Bitcoin?

Per Investopedia:

“Bitcoin is a decentralized digital currency created in January 2009. It follows the ideas set out in a white paper by the mysterious and pseudonymous Satoshi Nakamoto.1 The identity of the person or persons who created the technology is still a mystery. Bitcoin offers the promise of lower transaction fees than traditional online payment mechanisms do, and unlike government-issued currencies, it is operated by a decentralized authority.

Bitcoin is known as a type of cryptocurrency because it uses cryptography to keep it secure. There are no physical bitcoins, only balances kept on a public ledger that everyone has transparent access to (although each record is encrypted). All Bitcoin transactions are verified by a massive amount of computing power via a process known as “mining.” Bitcoin is not issued or backed by any banks or governments, nor is an individual bitcoin valuable as a commodity. Despite it not being legal tender in most parts of the world, Bitcoin is very popular and has triggered the launch of hundreds of other cryptocurrencies, collectively referred to as altcoins. Bitcoin is commonly abbreviated as BTC when traded.”

What is Ethereum?

Per Investopedia:

“Ethereum is a blockchain platform with its own cryptocurrency, called Ether (ETH) or Ethereum, and its own programming language, called Solidity.

As a blockchain network, Ethereum is a decentralized public ledger for verifying and recording transactions. The network’s users can create, publish, monetize, and use applications on the platform, and use its Ether cryptocurrency as payment. Insiders call the decentralized applications on the network “dApps.””

What is a blockchain?

With ‘blockchain’ being mentioned, here are more details on what exactly a blockchain is.

Per IBM:

“Blockchain is a shared, immutable ledger that facilitates the process of recording transactions and tracking assets in a business network. An asset can be tangible (a house, car, cash, land) or intangible (intellectual property, patents, copyrights, branding). Virtually anything of value can be tracked and traded on a blockchain network, reducing risk and cutting costs for all involved.”

As each transaction occurs, it is recorded as a “block” of data

Those transactions show the movement of an asset that can be tangible (a product) or intangible (intellectual). The data block can record the information of your choice: who, what, when, where, how much and even the condition — such as the temperature of a food shipment.

Each block is connected to the ones before and after it

These blocks form a chain of data as an asset moves from place to place or ownership changes hands. The blocks confirm the exact time and sequence of transactions, and the blocks link securely together to prevent any block from being altered or a block being inserted between two existing blocks.

Transactions are blocked together in an irreversible chain: a blockchain

Each additional block strengthens the verification of the previous block and hence the entire blockchain. This renders the blockchain tamper-evident, delivering the key strength of immutability. This removes the possibility of tampering by a malicious actor — and builds a ledger of transactions you and other network members can trust.”

How to invest in cryptocurrencies

Now, we get into how you can convert your fiat currency into cryptocurrencies.

Basically, you buy crypto on a crypto trading platform, and then you can put it into a personal wallet for secure storage, or have it stored by a financial institution that offers crypto services.

The easiest way to get started is to use a platform like Wealthsimple. You open an account, put money in, and then you can pick from many cryptocurrencies to buy.

Note: For information on other cryptocurrency exchanges in Canada, you can take a look at this link.

An essential note is that while one Bitcoin currently costs over $77,000 CAD, you can buy fractions of a Bitcoin. You could put $50 in, and you would thus have $50 worth of Bitcoin in your account. You can also do that with all other cryptocurrencies. Many people don’t realize this, which leads them to think they can’t begin to invest in crypto, when in reality, you can get started in Crypto with any amount of money.

How do ‘Crypto Wallets’ work?

If you get involved in cryptocurrencies and want to have your own wallet, you can find info on Wallets here.

Get started, and keep learning more

If you are new to the cryptocurrency world and seeking to get involved, I hope this article has been helpful for you. Cryptocurrency offers tremendous potential and opportunity, especially in a world where governments are devaluing our fiat money and trying to take away our earning power.

Spencer Fernando

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