Welcome Crypto Dummiez!
If you’re new here, this substack is focused on educating those that know nothing about crypto and blockchain tech. If that’s you then you’re in the right place!
By now we have covered many of the core ideas behind Bitcoin, Ethereum, and blockchain technology as whole. Today’s post is part of the beginners guide to getting started with crypto. How to buy your first coins, set up your first wallet, and how to store your coins securely.
With that being said, lets dive in!
Hardware and Digital Wallets
Before we can dive into the crypto universe and buy our first coins, we must make sure we have all the tool necessary at our disposal. First things first, hardware wallets and digital wallets.
Private wallets give the user full control over their private cryptographic keys, making this one of the safest methods to store your coins.
Hardware wallets are physical electronic devices designed to secure an individuals private keys from online methods of storage such as with a smartphone or tablet.
Some of the best hardware wallets out there are:
Trezor One
Trezor Model T
Ledger Nano S
Ledger Nano X
The differences between the two Ledger and Trezor models are minimal. As a beginner the Trezor Model One or Ledger Nano S should be more than enough to get started.
After securing your hardware wallet, you’ll want to setup a digital wallet that will allow you to interact with dApps on the blockchain.
The most popular and highly recommended digital wallet is Metamask.
Metamask is available as a browser extension and as a mobile app with built in web browser, allowing for easy access to your crypto assets and easy interaction with dApps on the Ethereum blockchain. As a bonus, you can also connect to your hardware wallet through Metamask to access funds stored in your Trezor or Ledger.
Next on the list is TrustWallet.
Trust wallet offers some of the same usability as Metamask, minus the browser extension.
Metamask and TrustWallet are the most popular digital wallets to date. They offer a built in browser, exchange to swap your coins for others, storage for NFT’s and collectibles and built in methods to buy crypto directly.
Setting up your hardware/digital wallet
The process for this will be quite similar for most wallets. The key here is to keep your seed phrase offline and written down somewhere safe where only you have access to it. When setting up your wallet for Trezor or Metamask you will be given a Mnemonic Phrase or, seed phrase. This is a list of 12-24 words to store your store your cryptocurrencies. It is proof of ownership over your crypto assets and you must never share this with anyone. Once someone gets a hold of your seed phrase they can steal your crypto assets.
Private Key VS. Mnemonic Phrase?
Your seed phrase/Mnemonic phrase represents an unencrypted private key. Your private key is made up of 64 hexadecimal characters and looks something like this:
Your seed phrase on the other hand, is a set of 12-24 words and is much easier to read and backup.
Ex:
Reminder: Keep your seed offline, preferably written down on a piece of paper as shown above and stored in a safe place.
Buying your first coins (Exchanges)
Now you have your hardware wallet and digital wallet set up. You’ve stored your seed phrase offline and in safe place.
What’s the next move?
It’s time to buy your first coins!
This is the easy part, many hardware wallets and digital wallets have exchanges and payment systems built in, you can buy crypto directly through your Trezor or through Metmask.
The next option would be buying from an exchange such as Coinbase or Binance.US
Coinbase
Binance.us
Coinbase and Binance are some of the most popular exchanges today. They offer you an easy to use platform to buy, sell, and trade cryptocurrencies. Just as Webull or Robinhood offer a platform to buy, sell, and trade stocks. After setting up an account and verifying some information you’ll be set to buy your first coins off one of these exchanges.
Reminder: There is nothing wrong with buying coins off of regulated exchanges. Just remember to transfer your assets to a hardware wallet or digital wallet. You do NOT want your coins sitting on an exchange. As BTB would say,
“Not your keys, not your coins.”
Once you have finished your setup and bought your first BTC or ETH, all that’s left is to transfer your assets to a hardware wallet or digital wallet where you will complete control over them.
This is the best way to secure your assets, I cannot stress this enough.
Best Practices
To summarize, before you can jump into the crypto universe, you need to make sure you have all the tools available to you. This starts with acquiring and setting up hardware and digital wallets to store your assets securely. It is extremely important to keep track of your seed phrase and store it offline and somewhere safe where only you have access to it. This is step one to securing your crypto assets.
Once your wallet is set up and your seed phrase is stored securely, you are ready to buy your first crypto assets!
This can be done through in wallet purchases through Metamask, Trezor, TrustWallet, Ledger etc. Coins can also be purchased through exchanges such as Coinbase or Binance.us. If you are buying your coins through a regulated exchange, it’s important to remember to move your coins off the exchange after purchasing. Storing assets in a wallet where you hold the keys is the most secure way to keep your coins.
Remember,
“Not your keys, Not your coins.” -BTB
Once you have purchased/moved your assets to a hardware/digital wallet you are all set!
You have completed the first step to getting started with crypto!
Today we went over the basics of setting up your first wallet and purchasing your first assets. We covered some best practices for securing your assets and retaining control of your coins. Hope this helps all of you who were confused on where to start and how to buy cryptocurrencies!
Next week will be our post covering the incentive model!
Hope to see all you crypto dummiez next week!