New to the Digital Currency World? No Problem. Here is our simple guide on how to turn your currency into Bitcoin as well as the options once Bitcoin is purchased.
A cryptocurrency, aka a digital currency, is essentially a digital money that can be spent via the Internet. In more depth, cryptocurrencies are restricted entries into a database that are created using cryptography rather than people or banks. All of these entries are shared over a peer-to-peer network known as a blockchain.
A blockchain is a public ledger of transactions, more simply put, a receipt of transactions that can be seen by the public. This public ledger works as a fraud prevention device, as it prevents digital currencies from being spent twice or being counterfeited. Every user on the network has access to the transactions that have occurred on the network. This allows for the entire history of the transactions made using a respective cryptocurrency to be seen by anyone. The public ledger also allows for the balance of any account to be visible by all on the network, though the identity of the owner is kept anonymous.
Cryptocurrencies are able to accomplish what a bank offers while also offering anonymity and decentralization. Each entry on the network is represented by a respective number of coins (it is different with every currency, as each has a different value, total supply, usage etc.). Coins are generated using a computer program that works to find the next block in the blockchain.
The people who run this program are called miners. The mining of the coin secures the network and confirms transactions. The blocks found by miners are solved by programs that are essentially cryptographic puzzles that are solved to discover new blocks. The hash connects, or chains, the new block with all previous blocks, creating the ledger and securing the transaction. This is where the term blockchain was derived from.The value of each cryptocurrency comes from their respective networks and the value in which the members of that network decide to trade the coin at.
Benefits of Cryptocurrencies
Irreversible Transactions: After a cryptocurrency is sent from one location to another and the transaction is confirmed, the transaction is irreversible. This acts as a form of fraud protection as there is no chance for chargebacks to occur.
Anonymity/Decentralization: Rather than a centralized bank, cryptocurrencies are stored in offline wallets that can only be accessed using the computer in which the wallet is downloaded on. These wallets may also possess a security code that is only known by the owner. Wallets are represented by randomly generated address that can be changed repeatedly, thus making it nearly impossible to link a wallet address with an identity. Though a public ledger of transactions on the network can be viewed by anyone, these ledgers are not connected to any single person’s identity directly. Different altcoins have varying levels of anonymity. Each wallet is essentially its own bank in charge of how and when its currency is spent.
Globally Accessibility: Entries on the network are broadcast over the Internet immediately and a confirmed in a short period of time, generally just a few minutes.
Security: Cryptocurrencies are very secure. The use the latest cryptographic techniques, which are essentially very complicated math equations, in order to maintain a high level of security.
Controlled Supply: These currencies have a finite number of coins that will ever be created and once all have been produced no more can be made. Counterfeiting and double spending of coins is also made more difficult because of this. This is unlike cryptocurrencies fiat counterpart, which can be printed at will by the government who owns the fiat.
Where to Start: Purchase Bitcoin
To purchase any altcoin other than Bitcoin one must first purchase Bitcoin (BTC), which can be thought of as gold in the digital currency world. Just as the value of fiat currencies revolve around gold, the value of digital currencies revolve around Bitcoin.
Where to Purchase Bitcoin: Coinbase
In order to purchase Bitcoin, sign up for an account Coinbase
Bank accounts allow for much larger deposits, but tend to take up to two weeks for the bank to process the transaction. Be sure to pay attention to the value of Bitcoin when purchased, as Bitcoin tends to fluctuate in value. So to get started just use your bank account or your Debit/Credits card which processes in a matter of minutes, but usually has a purchase limit of only $200 to $300.
Now What: Join A Crypto Exchange Now that Bitcoin is owned, the next step is to register for one of the public exchanges that sells many of the Altcoins. There are over 900 Altcoins now and most of them are on Cryptopia. I use Cryptopia it' s great click here to use my referral code by clicking on the image below.
Once registered for one of the exchanges the next step is to transfer the Bitcoin (BTC) that was purchased on Coinbase to the exchange. This is accomplished by going to account balances on the respective exchange and generating a Bitcoin address.
Each site has a slightly different process to create a deposit address. Cryptopia: Hover Over Username > Balances > BTC > Deposit.
Once the address is created, withdraw the Bitcoin from Coinbase. Make sure to send it to the exact address that was generated by the exchange. Failure to do so will lead to the loss of the Bitcoin with no chance at recovery.
To do this, follow the steps below.
Coinbase: Accounts > Send > Enter Address Generated From Exchange > Enter Desired BTC Amount > Send Funds
Almost There: Buy Altcoins of your choice
Once the Bitcoin has been successfully transferred to one or more of the exchanges, it is now up to you to purchase your choice of cryptocurrency and what you believe is (the) proper price. There is no right or wrong answers here, just be sure to take the market price, listed buy orders, and listed sell orders into consideration. All digital currency prices will fluctuate, so it is up to you to read the charts and graphs produced by the exchange.
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