Beginners Guide 1 /

 

Understand Risk so You Won’t Have to Worry.

Getting started in crypto presents newbs (that’s you) with an unfamiliar and uncomfortable situation. Crypto does involve taking some risks. If the alarm bells are ringing, don’t ignore them. Understand these risks and you will have a lot less to worry about.

The bottom line is that most people who don’t understand risk will fail to account for it.

Seems obvious enough.

We’ll help you to understand the risks and manage them accordingly. None of this is too difficult and there are plenty of good resources available. We even started a list of them here: Resources)

Get ready to move forward with confidence.

The only time you lose – is when you don’t learn from your experience.

– Chuck Norris

 

Our Loss is Your Gain. 

First off, let’s get something important out of the way – we’ve been through the best and the worst of times investing in crypto.

Some of us lost a sizeable percentage of our crypto holdings in the QuadrigaCX fiasco that happened in Canada a few years ago. Some of us have lost funds because an IT person had access to a password stored on a server. We’ve even had hardware wallets and books of handwritten passwords go missing. And then there’s Celsius Network…

All of these things are just as bad as you’d think they’d be or maybe worse.

It’s always going to be painful to admit to making mistakes. But here’s the takeaway: it is not going to happen again. 

I’m not worried. None of us are worried that this could happen again. Now that we understand ownership and self-custody, there’s no reason to be overly exposed to these kind of risks.

Loss and theft are preventable.

 

Getting started in crypto looks like a lot like this:

And it tends to repeat as things in crypto change constantly and quickly – from market performance, improvements in technology, to the latest news and of course changes to regulation.

Get ready for a wild ride with plenty of ups and downs.

Frequently Asked Questions

Let’s address a few of the most common fears and concerns; let’s clarify the real risks.

Here are some the most frequently asked questions we get from people considering buying their very first BTC or ETH.

See if any of these sound familiar.

I’m not sure I'm ready to “Be My Own Bank".

That’s fair enough.

Being your own bank is just another way of saying you have self-custody of your assets. Instead of someone else taking care of them for you, you can have the control and the responsibility.

You can also choose a middle ground; simply buying and keeping crypto on a custodial (centralized) exchange is what a lot of people do.  You can do this if it makes you more comfortable and the crypto exchange will be like a lot like your regular bank account.

There are plenty of crypto exchanges to choose from — these ones are all good places to get started:

The bottom line:
Owning and managing your crypto is going to involve a bit more effort. We think self-custody can be more rewarding and less risky, but it’s not for everyone.

 

 

Everything is really all up to me?

Yes. This is mostly true.

With great power comes great responsibility.

Now, you’re not going to be editing source code or launching NFT collections to begin with. Buying and storing crypto comes down to managing passwords and using the right tools.

If anything goes wrong it’ll be all my fault because of something I didn’t quite understand at the time.

This is definitely possible, but it’s unlikely and preventable.

First of all, you’re reading this (high five emoji). If you continue with our step by step approach you’ll understand the most important concepts right from the beginning.

You’ll be way ahead of the people who don’t take the time to do this. People like me back in 2016 for example.

Going through these first 4 Basics Guides will help ensure that you’re doing all the right things, in the right order.

When you make decisions they’ll be well informed.

Keep reading…

 

Could I lose everything by losing my phone or forgetting my password?

Not likely. You will have a Recovery or Seed Phrase stored securely and with it you can always recover everything.

If you have the recovery or seed phrase somewhere safe, like in a safe, it doesn’t matter if your phone ends up at the bottom of the lake.

You’ll just get a new one and sign in again.

Now it worth noting that this Recovery Phrase prevents you from losing a device or if a device gets stolen, but what it exposes you to is the possibility that anyone who finds this can gain access to all the crypto you hold in that wallet. They’d just “recover” your wallet with your seed phrase and probably transfer it to another wallet that you can’t access.

You need this phrase to be keep safe and secret.

Password management and security are extremely important. It’s worth getting and using one for crypto and all your online activities and logins.

Related: The Best Password Managers

If my passwords were discovered or lost, I'd lose everything.

Kind of.

If you lose your Recovery or Seed Phrase to a “Self-custody” or Private crypto wallet you’re in trouble.

For a private wallet — it will depend largely on how well you store your passwords and how careful you are. You can always restore your wallet using your Recovery Phrase. But so can anyone else if they find it.

On the other hand, if you hold your crypto on a centralized exchange, there are security measures in place because that account is held by a 3rd party and registered to you. 

If you buy crypto and keep it on a crypto exchange (Eg. Coinbase), consider what someone else would need to do to get it:

  • Your phone/laptop already has a PIN or biometric unlock (face, fingerprint).
  • You can use a Password Manager app to create and store long and highly secure passwords.
  • Your crypto wallet also has a PIN or biometric unlock.
  • To send funds from your crypto exchange wallet will require a Two Factor Authentication (2FA) code which means a temporary password is generated and required to authorize any sending transactions.
  • Even a thief, or someone who finds your unlocked phone, would still need most if not all of these things, before they can spend or send any of your crypto.
  • A thief essentially needs your active cooperation (in other words something more like a physical attack).

Don’t brag about crypto holdings or gains and no one will think to target you.

 

I don’t have the time or energy to be a day trader and react to these sudden market changes.

Most people don’t want to do this either and there is no need to.

You can always just simply buy and store crypto and not think even about it. We like to call this HODL mode.

You will not need to focus all your attention on analyzing 24 hr crypto charts and trying to perfectly time trades. It isn’t good for you and it is seldom profitable to chase trends or react to sudden market movements. By the time you see it happens it’s usually too late.

Crypto is very volatile compared to the traditional stock market but if you zoom out a few months or years – the number tends to go up.

Time in the market is better than timing the market.

Don’t try to pick the obscure meme coin and invest more than you can afford in the hopes it’ll make you rich overnight. It’s not going to work out. Invest what you can afford. Do your research. Be patient.

As you learn more about crypto and investing, you might want to become more active.

Thats’s great if that’s what you do, but it isn’t necessary.

 

I’ve missed my chance to get into crypto sooner. If I’d done it back when I first thought about doing it…

Ok sure. But nobody cares about something you didn’t do.

You shouldn’t either.

Absolutely everyone can make the case that they could have bought a bunch more of crypto XX waaaay back when they first heard of it. Then sold it at the all time high.

For example, I could have easily bought this neon green Lambo if I’d just bought a few Bitcoins back in 2015.

It’s not like it didn’t think about it – I just didn’t do it!
Then again I could very easily have lost those BTC by now too.

The key takeaways here are:

Focus on the future. Nobody knows exactly where things are headed (including us) and we are not offering any financial advice. 

However, cryptocurrency and blockchain technology appears likely to grow and to continue to be adopted more and more widely.  Not everyone agrees with this btw. Nobody knows for sure.

In our opinion, if you can afford to invest in anything right now, how can you afford not to at least consider this new digital asset class? 

If you’ve gotten this far congratulations.

Thanks for sticking with it. Hopefully you have a good sense of what crypto is and why it’s capturing so much attention. 

Next up we’re going to walk through Buying Your First BTC.

You’ll take dollars from your bank and exchange them for some Bitcoin.

By the way,  you don’t need to buy a whole entire Bitcoin. It’s not like a share in Apple or Tesla. You can buy a tiny little part of one Bitcoin to start off with.

 

Let’s go