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All you need to know about Cryptocurrency: Why and How to get Started

By now, I doubt this would be the first time you are hearing the word “Cryptocurrency”.  This word generally refers to digital assets that make use of cryptography to secure financial transactions, control the creation of additional units of the currency and verify the transfer of assets.

Bitcoin which I am also sure you have heard of is the first cryptocurrency to be created as an open-source software in 2009 by an unknown developer/group of developers, popularly referred to as “Satoshi Nakamoto”. Since then, over 4000 other cryptocurrencies such as Ethereum, Binance coin (BNB), Polkadot, Solana etc. have been created. These other cryptocurrencies asides Bitcoin are generally referred to as Altcoins.

You might be wondering why you should be involved in Cryptocurrency one way or another. Here are a few benefits of Cryptocurrency:

  • 1.       Decentralization: This means that they are not owned or controlled by any central authority such as government or group of individuals. A perfect example is Bitcoin. However, you must note that there are centralized Cryptocurrencies currently in existence.
  • 2.       Transaction speed: Taking advantage of modern blockchain technology, transactions on cryptocurrency networks happen in a matter of seconds unlike the traditional banking system.
  • 3.       Accessibility: Cryptocurrency can increase global financial inclusion by banking the unbanked. This is because the rigorous processes of opening a bank account are eliminated as all you will need to start using cryptocurrency is a “wallet”. Note that the transaction costs for sending money across borders are slashed to very minimal fees using cryptocurrency.

The current stage of cryptocurrency has been largely compared with the early days of the internet. The estimated user growth of cryptocurrency correlates closely with that of the internet. Following a similar trajectory, it is safe to say that we are still early, and now is the best time to learn about, and invest in cryptocurrencies.

“How to get started on Cryptocurrencies”:

The simplicity of getting started on cryptocurrencies is so much so that you can do it while seated in your toilet. It simply involves downloading software, an application known as a “Crypto Wallet” from the App or Google Play Stores depending on the device you are using. This wallet app is where you can do all your crypto related transactions such as send and receive as well as store Crypto assets. This is closely related to your traditional mobile banking app.

One very important thing to note is that there are many options as regards to what crypto wallet to use. Obviously in as much as there exist the credible ones, there are also lots of scam wallets. Here are a few suggestions on which crypto wallets are best to transact with:

Blockchain Wallet: When creating a wallet on https://login.blockchain.com/#/signup, you will only be required to put in an active email/password.

Link to app: https://play.google.com/store/apps/details?id=piuk.blockchain.android

Next, you’ll receive a mail asking you to verify your email. Attached below in the mail will be your wallet ID. Safely copy it down in a thick book as it serves as a username to login to your blockchain wallet. When logging in next, it’ll be required alongside your password.

Trust Wallet: To create a Trust Wallet, download the Trust Wallet App from the official Android Play Store or Apple App Store on your Smartphone.

Link to app: https://share.trustwallet.com/3BDm2ri

Click “Create a new wallet”, and then backup your wallet’s seed phrase. These are 12 words that will help you recover your wallet if you lose your device. To backup, write them down in a thick book and store in a safe place (water and fireproof). Making multiple copies and securing in different safe locations is highly advised, should you lose one.

Never share your seed phrase with anyone. After backing up your seed phrase, you will be required to put in the right seed words in order to have access to your wallet. Once you do this, click “Done” to access the wallet you just created.

Coinbase Wallet: To create a Coinbase wallet, simply download the app for whatever device you are using (App Store or Play Store). Click on “Create New Account” and pick a unique username for it. Next, click on “Create a new wallet”, then accept the terms of service by checking whatever necessary boxes. Select between Touch ID or Passcode to protect your account. For passcode, you’d have to create a 6-digit passcode to prevent unauthorized access. Just like any non-custodial wallet, you’ll be given a 12-word recovery phrase which you must write down in the correct order (case sensitive) in a safe book. Doing this immediately will prevent you from forgetting.

Note that these are not the only secure cryptocurrency wallets out there.

Now that we know why getting into Cryptocurrency will be a pretty good idea and how to go about getting started, how do you send and receive cryptocurrency?

To receive bitcoin/any other cryptocurrency:

  • 1.       Go to the “receive”/ “request” section of that particular cryptocurrency in the cryptocurrency wallet you are using.
  • 2.       Copy the wallet address (usually a string of alphanumeric characters)
  • 3.       Forward the copied address to whoever is to send you the desired Cryptocurrency (e.g. Bitcoin).

To send out Bitcoin/any other Cryptocurrency:

  • 1.       Click on “send” from your wallet (In a situation where you can’t find it, first click/select the cryptocurrency you wish to send, there you will find the “Send” button).
  • 2.       Specify the Crypto you wish to send out (If you find the Send button on your wallet first page)
  • 3.       Paste the receiver’s address.
  • 4.       Specify the amount of the desired Cryptocurrency you wish to send and you can hit the send/ok button.

A bitcoin wallet address cannot be used to receive “Ether” (Ethereum) and vice versa. However, an Ethereum wallet address can be used to receive other cryptocurrencies built on the Ethereum blockchain. Using a bitcoin address to receive any other cryptocurrency will lead to loss of funds.

Tip: Investing in cryptocurrency does not involve sending your money to anyone/platform to do business and give you percentage returns. You simply buy a certain cryptocurrency with your local currency or other cryptocurrencies like bitcoin, ether…and hold them in your cryptocurrency wallet. You can sell them back to your local currency if/when the value increases overtime to your satisfaction. The idea is to pick cryptocurrencies backed by good fundamentals. Don’t let anyone deceive you. You are completely in charge of your money. The only risk involved is with the volatility (which is never a problem if you are holding a good cryptocurrency long term) and losing your private keys–they represent access to your account. Pen them down carefully in a safe book and guard them in a waterproof/fireproof safe.   Volatility is what actually makes crypto-trading/investing a profitable venture.   

 

Related articles:

How to Buy and Sell Cryptocurrency

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