If you’re one of the 3 people who have read my content, thank you, and I apologize if most of my prose comes across like a foreign language. I must have inspired a few people, because over the last month I’ve had extremely fun and engaging calls with them about crypto. After yesterday’s mayhem, I decided to turn off the price charts and DeFi protocols to spend some time writing an article about how to take the first step into the world of cryptocurrency.
I have always enjoyed helping people be successful by empowering them to help themselves. Perhaps it’s because self-satisfaction is the most fulfilling and best way to build confidence. Nobody ever climbed the mountain alone, so I am here to pay it forward and help the crypto-curious get comfortable investing and understanding cryptocurrency.
I get it. It’s very daunting and probably feels like the early days of the stock market. In 2016, my initial impressions of Bitcoin were that it’s a science experiment created by some computer engineers who play MMORPG’s with each other online. Ethereum looked even more complex with terms like “smart contracts” and “programmable money.” The initial hurdle is difficult to clear and oftentimes the best metric to point to is historical price increase because it’s impossible to explain the technology in 30 minutes or less.
I assure you, there is A LOT happening on the blockchain and in research communities that spans most verticals, has created thousands of jobs, built generational wealth, and has the power to revolutionize finance and society. The purpose of this article is to answer some basic questions about how to get started. Keep in mind that none of this is financial advice.
Who am I writing this for?
I am fully aware only 5 or 6 people may ever read this, if I’m lucky. A close friend of mine from my former life in renewable energy told me ‘If you left your very successful career for blockchain, and plan on supporting your family, crypto is clearly a legitimate industry and significant opportunity.’ I humbly agree, and am here to be a voice of reason and objectivity in a lightning fast space with lots of uncertainty.
Blockchain is full of jargon like ‘trustless, permissionless, automated liquidations, DeFi,’ but what never gets mentioned is the importance of education. I am writing this for people in my personal and professional network, who trust me, who know me/have met me/worked with me, and believe there is a legitimate opportunity with blockchain. I have firsthand experience with the many revolutionary use cases occurring on the blockchain.
What do I want to achieve?
Primarily, I want to create a document to share with the crypto-curious. We are all very busy so it’s easier to scale with an article than having hour long conversations. However, I do want to inspire open dialogue and questions from you after you take the first step. I would be thrilled if you end up exploring and falling down the rabbit hole on your own.
When is a good time to buy?
This is a question I and many other crypto veterans get. Do you ask when the best time to buy stocks is? If you’re asking this question, you are either overthinking it, or don’t have enough conviction. My recommendations:
Only invest as much as you are willing to lose. Nobody knows if crypto is the Internet of Value, Amazon, or Pets.com. Speaking of which, it’s hard to compare with traditional financial products and companies because it’s a new asset class with fundamental metrics that are difficult to quantify. The blockchain is the substrate for the finance of the future and there is value in contributing to its security.
Consider your investment horizon - if you need cash in the next 6-12 months, it’s unwise to invest in risky assets. A longer term outlook, the current price isn’t relevant, it’s the expected return that matters
Research ‘dollar cost averaging.’
What hours are the crypto markets open?
Markets are open 24/7. Cryptocurrency is global and are currently an unregulated, free market. This will likely change over time, but requires an immense amount of collaboration as the blockchain has no borders.
There are so many cryptocurrencies. Which ones are the best?
My suggestion is to keep it simple and start with Bitcoin and Ethereum. They are the most secure and decentralized blockchains, have regulated market products (Chicago Mercantile Exchange, international ETFs), and are sitting on the balance sheet of many publicly traded companies (Microstrategy, Square, Tesla, Ark Invest).
If you prefer not to have exposure to highly volatile assets, there are ways you can convert dollars into stablecoins and earn much higher interest than what’s currently offered at your bank. I recommend the Dharma iPhone app to easily connect your bank to DeFi and yield 15% on stablecoins!
Where can I buy crypto?
Voyager is a zero fee crypto broker with a very nice iPhone app. They pay you interest if you hold your crypto on their exchange.
Coinbase is the largest, and now public, cryptocurrency exchange. Their fees are slightly higher, but they have deep liquidity and a solid reputation.
Binance, Kraken, Gemini, and FTX are also good options with diverse coins to choose from
I would advise against using Square, PayPal, and Robinhood because they don’t allow you to move your crypto off their platform, only buy/sell and hold.
How do I check prices and get other information about the tokens?
Most iPhone apps for the exchange you prefer has updated price information, and you can follow your balances there if you decide not to move your crypto to a personal hardware wallet.
CoinGecko provides comprehensive information about price, market capitalization, website, socials, and where you can purchase. It’s my go to iPhone app as well.
What’s the best way to store my crypto?
Get a hardware wallet like a Ledger Nano X, a Trezor, or a Grid Plus. This is the most secure way to hold and own your digital assets. When you hold your crypto on an exchange, it’s technically not your because the private keys aren’t in your hands.
For a more comprehensive understanding of this, read about how to safely and securely self-custody your digital assets (my article)
What can I do with my crypto?
A lot! Depending on what you acquire, you can hodl it, lend it on a centralized exchange, stake it, or use it in one of the many DeFi applications.
For DeFi, you’ll need to get a Web 3 wallet, like MetaMask, to interact with most protocols.
How do I fall down the rabbit hole?
Score! This is exactly the goal of my piece. First of all, do your own research. Trust, but verify. There are a lot of bad actors who want to scam or swindle people online, so it takes some time to understand filtering the signal through the noise.
Podcasts are great. My favorites are Bankless, Blockcrunch, Uncommon Core, Epicenter, and Hidden Forces
Twitter is full of engaging and honest crypto evangelists who post information, opinions, links to articles, and other alpha.
Reddit boards have excellent information too if you prefer long form engagement.
YouTube videos abound. Usually the topic you are curious about has a good 5 or 10 minute clip to answer your burning questions.
Ask questions via the above-mentioned social channels, or join the project’s Discord/Telegram. It’s easy to access developers, founders, and community managers.
Find your tribe and join a community! Just like any goal you’d like to achieve, or new topic you’d like to learn, you will need likeminded, supportive, and motivated folks around you to help. I have an extremely helpful and engaging Discord group.
Is it too late? Did I miss the high growth opportunity?
I don’t have a crystal ball, but the fact you’re just learning about it means we’re probably still early. A recent study showed 17% of Americans now own Bitcoin.
Bitcoin is 10 years old. Ethereum is 6 years old. DeFi is 2 years old but has over $100 billion locked across the various blockchains, mostly on Ethereum. The growth metrics are staggering. I will point you to CoinMetrics to see for yourself how daily active addresses, transactions, and network fees have grown.
Anything else I missed? Just ask!