Get started trading crypto currencies

Finance, Taxes, Banking, Insurance and Retirement
1
Hi,

I am creating this tutorial for those who want to get started trading crypto currencies. If there's a real interest, I can upgrade the instructions to become a little bit more serious (such as including GDAX and other platforms).

On 09th January 2018, 2 decent options are Coinbase and Binance.

In fact, Kraken and Bitfinex are not accepting new users until mid-end January 2018 because they don't have the infrastructure to support so many users yet. Coinbase does not have it either, yet they let in new users...

Why these 2 platforms?

Coinbase is a secure online platform for buying, selling, transferring, and storing digital currency. In January 2018, they only deal with 4 cryptocurrencies (BTC, ETH, BCH, LTC). It's a relatively safe platform, and conveniently allows SEPA transfers to send in/out your fiat currency (Euros). "For non-U.S. customers, funds are held as cash in dedicated custodial accounts" . (Source: https://www.coinbase.com/legal/insurance )

Binance is one of many exchange which deals with numerous crypto currencies, including great ones (XRP, Ripple) and other not so great or more risky (FUN, Funfair). On Binance, one can only exchange crypto currencies for other crypto currencies. It means one can not use euros to buy some XRP for example. It's required to have ETH or BTC and exchange them. Their fees are relatively low, they offer double authentication for a minimum of account security.

Binance will allow you to exchange BTC, ETH, USDT (Tether) and BNB for plenty other crypto currencies.

There are numerous other exchanges, the most popular with decent security, solid choice of cryptocurrencies, decent reliability... are usually not accepting new registration at this time (at least for Bitfinex, Kraken...).

So the 2 options above are offering some flexibility, and are relatively secure. Maybe they are not the best but they can be good enough as an introduction to understand the basis, prior to move on to more complex plaforms like for traders (Gdax, Bitfinex...).

Therefore, I explain here how it can be done:

1) Register on Coinbase:

https://www.coinbase.com/join/5a09bc488794cf00e466a726

Disclaimer: it's my referal link, here what it gives:

"Using digital currency is more fun with friends! You can invite your friends by sharing the provided link. Once your friend buys or sells $100 of digital currency or more, you will both get $10 of free bitcoins "

It can take a few days, including the verifications and sending the money. The good thing is, you can send euros using SEPA, it's free to send in Coinbase. To take out your euros, again it's SEPA and there's a fee of 0.15 euros.

(fees are listed here: https://support.coinbase.com/custome...ticles/2109597 ).

At this point, we can assume that you have euros inside "coinbase".

Then you go into "Buy/Sell" and buy, choosing the amount and crypto of your choice (BTC, ETH, LTC, BCH...).

Since Binance will allow you to trade the main cryptocurrencies for others, it's required to get either BTC or ETH, if the intention is to acquire other cryptocurrencies on Binance.

2) Register on Binance:

https://www.binance.com/?ref=17571607

Disclaimer: It's again my referal link.

3) Send/receive the crypto from Coinbase to Binance.

This step is very important, because as indicated, Coinbase is very often down when there is a significant move, meaning you are unable to even login into your account. As an example, I suffered from one of many outage, and I was unable to sell when I wanted. I "lost" 2500 euros due to that.

Now, thanks to the crypto currency low transaction fees, it's almost free to do that. In fact it's a "network fee" and it will be indicated to you at the time of transaction.

Say we are going to send ETH (Ethereums) from your wallet in Coinbase to your wallet in Binance:

Coinbase: Account/ETH Wallet/Send.

Info: I don't have any ETH in coinbase on that screen capture, I sent all to Binance a while ago

Binance: Funds/Deposit/Withdrawals

Then on the line of ETH Ethereums, "deposit".

It will give some links and information.

You can even simply capture from the "QR Code".

IMPORTANT: Send only ETH to this deposit address.Sending any other currency to this address may result in the loss of your deposit.

Notice: Coins will be deposited immediately after 30 network confirmation (it takes about 5 minutes)

Input the information in Coinbase and send.

4) Trade

You should have your ETH in Binance, and are ready to trade them in the exchange.

Sample of cryto currencies and their increase (last 24hours):

5) "Cashing out"

When you want to convert back your money in fiat currency, you do the opposite process.

Send from Binance to Coinbase. Then convert into Euros, and send a SEPA back to your account.

Remember the warning and sending only the relevant cryptocurrency in its proper wallet, do not send BTC to a ETH wallet for example.

It's an overall tutorial, it should give you the basics to get started!

Advice: I'm definitely not a professional so I merely share my experience to get you started!

-In my opinion it's worth to try investing in Cryptocurrencies because of the real revolution in brings in numerous environments (finance, banking property, insurance...)

-For a start, invest reasonable amount (do not go crazy because you see +200% increase in 24 hours)

-Allow a few small transactions to understand the platforms (there are advanced features like "stop, limit", very powerful but not easy to master)

-Have a plan and stick to it. Otherwise there is a risk of panicking due to "masses moves" (when lot of users sell at once)

-Do not fear losing 20-30% in one day or even hours, if the currency is solid it will recover. Most of these moves are due to numbers of users panicking, for example in Litecoins I "lost" almost 40% shortly. A few weeks later it recovered and I even made +20% profit.

-Do some research on the crypto you want to invest in. Here is a very good source:

https://coinmarketcap.com/all/views/all/

Look the crypto, the percent evolution, the website...

-Use tools available to protect from emotions. For example use a "STOP" to better control a value dropping quickly. This way, it's easier to secure your position rather than having to make a decision while there are signs of market panic.

-Stick to the crypto with the most capitalization, a lot of "new crypto" can be traps to get your money (I summarized that, but the explanation is longer).

I personally believe in:

- XRP (Ripple) because it has the potential to replace the SWIFT banking system created in the 70's. Many banks are believing/investing in XRP, including UBS. Read their website: https://ripple.com/ .

- ETH because of smart contracts and also of the change which are going to happen (switch to Proof of Stake, blablabla).

- Monero (not doing great for now, but it adds a layer of privacy and transactions can not be tracked).

-Keep informed of the market, the news related to your cryptocurrency(ies) as sometimes important news are influencing the market and can create a "wave" of buy/sell (again, the long term matters but you might want to sell prior a drop in market values). For example, early January 2018, when "Coinbase" announced they were not going to add XRP (Ripple) to their exchange, the price dropped by 30%. Since it's a solid cryptocurrency with actual technological interest, the price did not collapsed and it recovered quickly, nonetheless it's a drop in price.

-For advanced users: Use the low cost of network transactions at your advantages to be flexible and proactive. For example, have a hardware wallet of given currency, and transfer your cryptocurrency on it, off the exchange, so that you can quickly and cheaply move it on another exchange in case there is a problem on that exchange preventing you to make transactions. Of course, it implies that you are securing it, keeping private keys, backups, etc...

Reading sources to keep informed: (to be taken with moderation, it's always someone opinion not accurate facts or future reading!)

- https://www.ccn.com/ (information, market values, trends...)

- https://coinmarketcap.com/all/views/all/ (market values, links to cryptocurrency pages...)

Here is my Public Ethereum Wallet address, if anyone wants to make me a donation (it's in ETH, Ethereums ) :

0xef5230A960B3D194d8e5d1f73BeF6AD8c83760Ac

You can even scan the QR Code:

Many thanks!

Give feedback on the tutorial, I can improve it.

2
You might want to highlight the fact that Coinbase can only trade four cryptocurrencies as of today (BTC, ETH, BCH, LTC).

If someone is interested in one of the other hundreds of cryptocurrencies, then Binance is required.

Also - on Coinbase is possible to buy cryptocurrencies using FIAT (=real old-fashioned money ), while on Binance you need a cryptocurrency to buy other cryptocurrencies (eg: you already need to have some Bitcoins or Ethereum to buy Ripple or Cardano).

3
I'm interested in best practices for maintaining multiple cascading wallets for various currencies.

Where do you store your keys? An app, a DB, a text file, or a piece of paper?

Which wallets are best for which currencies? Are there cross-currency wallets?

4
Thank you for this write up. 2 questions:

- where do you trade XRP and Monero? They are not available on Coinbase.

- is it possible to do a stop/limit trade directly at Coinbase? From what I heard, you need to enter it directly at GDAX exchange, which should use same credentials as Coinbase (but then it doesn't make sense to me why Coinbase doesn't support it directly).

5
Very good point, I added information in the direction you mentioned!

6
In case of the exchanges, the keys are stored and owned by the exchanges. Yes it means that they are in control of your currency. On the plus side, you do not need to manage backups, etc...it's a trade off. Which is why I somehow recommended for advanced users to send the cryptocurrency on hardware wallets.

It's still required to make some backups, for example on Coinbase you need to backup the private key where you want, they will display it on screen. You can copy/paste, write it down on paper, etc...

I think it's best to use the official wallets from each crypto currency, recommended on their website. For example, for ETHEREUMS:

https://www.ethereum.org/

Why? Because its the official, latest code, latest features, and it downloads the official full blockchain so it's up to date with the network.

Or, you can leave the crypto currency on the wallets on the exchanges, which can have inconvenience.

Having a local wallet implies great responsibilities. I already lost my BTC wallet that I have for years. Well, it was empty anyway, I was just learning numerous years ago

One could also buy those hardware wallets like "Trezor".

7
Does it make sense to use the exchanges for "transactional" wallets, then maintain a deeper layer of keys for longer range storage of larger amounts in a local wallet with more security ?

8
1) XRP and Monero are listed in Binance.

Otherwise, in a general way, you can see the exchange of each cryptocurrency on their official websites, such as:

Ripple: https://ripple.com/xrp/buy-xrp/

Monero: https://getmonero.org/community/merchants/

Interestingly, none of them are showing Binance as an exchange .

It's a non exhaustive list, probably some kind of partnership list.

I traded both XRP and XMR for ETH in binance.

2) I don't think it's possible in Coinbase.

Coinbase is for basic users. Their fees are relatively not to great (Standard Buy / Sell 1.49%).

It works, it's not that complex and there are still some features like graphs, etc...

For advanced user there is GDAX which is owned by Coinbase and offers stop/limits, etc... It's in fact the same platform behind which means that when authentication fails to works on GDAX it fails on Coinbase too.

Their fees are lower than GDAX, and as you said, you can login to Gdax using your Coinbase credentials. If I remember you need to add some authorisations as it's kind of trading platform so added requirements.

I can only speculate that Coinbase has basic features only to reach more people, and that is why advanced user can use GDAX.

I honestly share that I did numerous mistakes such as converting in Coinbase instead of GDAX, giving them higher fees. I also did not understood limits and market prices, so I bought some crypto at a incredible higher price and sold at a incredibly bad price .

Which is why I recommended to try to learn the platforms prior to use them for significant amounts.

I found that Coinbase and Binance are a good combination for beginners and for intermediates.

9
It does.

You buy 10 ETH on Coinbase, they are stored in your wallet on coinbase.

You send them to your hardware wallet, locally installed on your computer.

It means if something happens to Coinbase, you have your 10 ETH on your wallet, locally. You can send them to Binance, for example and exchange them.

But I would be cautious calling that more "secure". Because, indeed, you are no longer dependant than "coinbase" in that case but:

-Can be hacked.

-Can make mistakes locally such as sending them from your local wallet to a BTC wallet (incompatible currencies) instead of another ETH wallet.

-You can lose computer or damage and without proper backup it's your total loss.

For me, I found that keeping the currencies on the exchanges (Coinbase and Binance) are acceptable. Indeed, I lost control when Coinbase was down and lost a lot of money (my profit shrinked and I could have made 2500euros more than the mere 900euros I earned). I know I do not have the infrastructure and backup to store locally*, at the moment.

Also, I "only" deal with few thousand euros, which is significant amount for me, but appears to be very little from these exchanges point of view.

So you have to make a compromise based on your situation!

*Ok the infrastructure is only about a computer, a decent connection to download the full blockchain locally, a few GB of space and some place to backup, maybe even on paper. I have an old unreliable PC and not much time to improve the situation. Most users probably have the infrastructure required!

10
Hi @CorsebouTheReturn, thanks for the great manual!

If I could suggest anything, is that's its a bit verbose, a bit long.

I have already seen someone recommend this combination (coinbase + binance), but they stressed out, that you should buy ETH on coinbase (not BTC), and then purchase further cryptos on binance . I guess in a loong guide like this, this crucial info can get lost.

Tell me, after I buy my cryptos on binance, can I send them to my hardware wallet directly?

11
Thank for the feedback. True, a tutorial with picture or video or anything more modern would be way better. I could do it but not at the moment. And EF is not particularly the best place for that, I'd have to create it externally.

In fact you can buy BTC in Coinbase using Euros, and then send them to Binance. In Binance you can trade BTC for other cryptocurrency, or ETH for other cryptocurrency.

See:

It's all about the "tab", they exchange BTC, ETH, USDT (Tether) and BNB. I will add that to the tutorial.

As for your question, you can always send/receive cryptocurrencies from your wallet in Binance, to any external wallet.

It looks like this:

As seen, there's a minimum of 0.1 ETH, though, not sure how to bypass that. I emailed support.

12
I don't really see the advantage of using an insecure system like Coinbase etc when Swissquote (a well-established bank with trading platform) now trades the 5 major Cryptocurrencies on your behalf using a much safer platform and environment https://en.swissquote.com/promotion/...SAAEgIeBvD_BwE

13
Can you define "insecure" for Coinbase?

As for Swissquote:

-I notice they say "Bitcoin" is XBT but the symbol is, I think BTC.

-The fee is a bit lower than Coinbase (1% vs 1.49%) but higher than GDAX.

-It has 5 good crypto, but you are unable to trade them for something else

( It is therefore not possible to realise transfers or acquisitions )

-It's only USD or EUR (like bitcoin), no CHF

I do not know that platform, surely there are plenty much better, I really specified Coinbase/Binance are a decent option for starting simple with more advanced possibilities.

In fact since all exchanges are taking fees, there are plenty of exchanges available. I would say finding reliable ones is also important. It can be done at a later stage once one get more understanding! For example, in your situation there's no way to send the currency to private wallet or something, so it's a missed learning opportunity and a 100% locking down your crypto currency on your particular website.

If I may add my "expertise" (I'm really new to the topic ) to your suggestion, I think it's also a very good option to trade directly EUR vs XRP...So it appears good for specific type of transaction only. I find the rest a bit limited in terms of flexibility. The fee is a bit high (but probably acceptable for newcomers, and it's a bit less than Coinbase).

14
It is a starter thread, and important to get the hang of the very basics, e.g., buying, selling transferring, etc. We can weigh out the merits of better alternative plateforms later.

I'm interested to know which news sources is best to use that broadcast relevant announcements. For example, and government actions related to the market, new ICOs, etc.

15
care to expand on this little tid-bid? thanks

16
Im interested to learn more, being a complete novice at anything to do with Crypto currencies or trading.

I have opened an Coinbase account.

Binace link just takes me to a load of Chinese type text about browsers?

Also what are reliable sites for information?

I have been reading different articles for the last few days, some predict doom and gloom whilst others say it will sky rocket!

17
Government actions are very specific and sometimes they don't even broadcast it outside the country boundaries... Like Polish government closed down a few exchanges in Poland, I doubt it got noticed worldwide and probably only had a minor impact.

Coinbase twitter message about not taking XRP did influence greatly the market, XRP price dropped since then, yet it's a relatively minor exchange.

In fact the ability of success of a given crypto currency project (like Ethereum, Ripple...) also relies on a good, fast, reliable communication. For the case with XRP on Coinbase, they failed to anticipate that eventuality and communicate in advance to avoid market panic.

I think very little companies are able to communicate properly in that regards nowadays, my humble observation.

I do not know a great source of information, if someone can provide some I will update the instructions.

I have browsed many but it's full of scaremongers, or people trying to start panic moves to get upper hand on the cryptocurrency exchange market.

There's also lot of speculations and fallacious theories based on pseudo analytics garbage.

So far, I'm only relying on my understanding on each projects and who are supporting them. For ripple, despite being frightened by the recent drops, it appears that the project is so great and supported by big banks, so I believe the market value of XRP will be decent. Having said that XRP is a bit different as the value of the cryptocurrency is actually not correlated in the same way as BTC, ETH... There's not really a supply/demand issue and it works differently, no mining involved, etc...

Also, since there are plenty of newcomers like me, it appears relatively easy to predict a drop in market prices after any "negative news" which are coming out on Twitter or specific media (linkedin, etc...). I would not consider any generic media (20min etc...) as they run on garbage and fear mongering all the time and most readers are too focused on bitching rather than actually buying any cryptocurrency.

18
I forgot to quote sorry, it was taken from source:

" https://www.coinbase.com/legal/insurance "

19
Exchanges such as Coinbase are unregulated, and as such they can basically do what the **** they want. If they decide not to let you sell your Bitcoin for any reason (eg: fluctuating prices)? Tough. They get hacked and you lose all your coins? Tough.

Swissquote in contrast is regulated, acts on your behalf and (from what I read in the T&C when I opened the account) will compensate and secure your investment against fraud.

PS: Nonetheless, good thread and well-explained guide, I always love it when people take the time to do this stuff so well done.

20
I do not know what's wrong with Binance link, it works here. Maybe try another web browser?

I even wonder if there are any reliable sites for information, it's like the far west out there

As for reading, you can not make a generalization! Each cryptocurrency is in fact a single project with different objectives, impact, etc... which are sometimes linked to their market value, sometimes not. Some crypto currencies have already sky rocketed, some have taken +500% in a day, some are slowly going up and some and going down.

Take XRP for example, which has a lot of potential but it's rather specific, it lost 2 digits % due to a dumb announcement, yet it's a very solid project. It is around 2.30USD at the time of writing, it could easily double in a short time. I doubt it will be like BTC which took +10000% or something in a few months/year because it works fundamentally differently.

Also it depends what your expectations are, if you intend to make +x % of your investment money it's definitely doable. If you intend to benefit from "sky rocketing" it's pretty hard and can be risky. In all transparency, I bought ETH when they were worth 300USD and panicked stupidly when their value dropped following coinbase outages successions are around 400USD. Now they are 1205 USD on the market

So you should rethink the situation as different projects, understand them and invest accordingly. If you intend to buy/sell on short term fluctuation it's also possible on the exchanges. I did +20% in Binance exchanging ETH for "FUN" (Funfair) following a dumb mistake, all in a few hours Unfortunately I only invested like equivalent of 80 euros.

For example, now, the XRP has taken +7.80% in the last hour (source: https://coinmarketcap.com/all/views/all/ ).