How much should you invest in Cryptocurrency as a beginner?

 How much should you invest in Cryptocurrency as a beginner?

You have taken the red pill, now you want to try to invest, or you have already started investing in cryptocurrencies.

But where do we start? There are over 1500 cryptocurrencies on coinmarketcap.com and tons of exchange sites, and many technologies to understand. The crypto world can be too much for newcomers, and it takes a long time to research and figure out how to invest in cryptocurrencies and avoid costly mistakes.

Read also: 

Cryptocurrency guide: how to buy, hold, and trade

 

I will try to explain the basics you will necessarily have to learn, including which wallet to use and how to use them, how to trade cryptocurrencies, where to trade cryptocurrencies, what to look for in good projects, and general advice that I have personally learned by investing in cryptocurrencies. So no more chatter and let's get started with the Beginner's Guide to Investing in Cryptocurrencies.

Let's start | How to invest in cryptocurrencies

Here are the topics I'm going to talk about:

 

Wallets

Wallets are like bank accounts for your tokens. I'll talk about all types of wallets and how to use them.

Exchange

How to send money and take your first steps on the most popular exchanges.

Trading

How to start trading, and the things you need to know about the cryptocurrency markets.

How to check cryptocurrencies

Apps to help you understand your losses and gains and how to check tokens and prices.

Security

Advice on how to maximize security for your tokens, and how to avoid scams.

Common Mistakes Common

Mistakes You Should Avoid.

General

Advice that I have found useful in my experience between trading and research.

Resources

Useful resources to learn other useful information about these technologies and cryptocurrencies.

Wallet | How to invest in cryptocurrencies

Wallets are like bank accounts, and different types of wallets can contain different tokens.

 

To trade with any cryptocurrency, you must first have a wallet to hold them. For example, Bitcoins must be contained in a bitcoin wallet. Wallets are just what they seem, they are like a bank account.

 

How to get a wallet

The simplest way is to sign up for an exchange that allows you to buy, trade, and sell cryptocurrencies, the exchange allows you to generate a wallet for each type of token you trade with, even if you don't have any. Coinbase for example gives you a wallet for bitcoin, ethereum, litecoin, and bitcoin cash.

 

Crypto wallets don't actually contain anything, unlike a physical wallet

One important thing to understand is that wallets are simply a secure window through which you can view your transactions and records. Think of something like Gmail, where your wallet is your login account and password, but you don't physically receive emails, you just log in. Your tokens and transactions are stored on a blockchain, which is distributed across a large network. So they are always there, no matter if you lose your wallet. You simply won't be able to access anything without your wallet.

 

How to send and receive tokens between wallets

Each wallet has its own address, so if you trade with 3 different exchanges, you will have 3 different wallets and a different address for each exchange and for each token. Think for example of the URLs of different sites.

 

Wallet addresses are a long string of characters, called hashes.

To send tokens between wallets, you must first copy the recipient's address, and then paste it into the recipient field when you are sending the tokens. Here is an example of the screen of a send on coin base :

Wallets are specific currencies

It means that you can only send and receive tokens of the same type to addresses of the same type. This is very important to understand. In the world of crypto, you cannot send different coins to different wallets, otherwise, you will lose your money forever.

 

ERC-20 based tokens are the exception

To be precise, there are certain tokens based on the ERC-20 protocol, which can be contained in the same compatible wallet. So for example, if you have 2 ERC-20 tokens, such as apple coin and orange coin, you can send them both to an ERC-20 wallet

Different types of wallets

Online wallets are often the least secure, but they are certainly the most convenient for trading. If you have tokens on an exchange you can trade immediately. However, there are different types of wallets.

 

 Desktop Wallets

These are wallets that are created by the token developers

 

Mobile Wallet

These are wallet apps that you can download and install on your phone, they are most common for android phones

Online

wallets All exchanges paper Wallet

Paper Wallets are basically the printing of your wallet's private and public keys and a QR code that you can scan. A private key is a sequence of letters and numbers, which you, and only you should know, access your tokens. offer online wallets, to allow you to send and receive tokens. For example Coinbase or Myetherwallet.com. It is highly recommended to keep tokens offline to reduce the risk of hacks, phishing, and even the collapse of exchanges. Many exchanges have security systems, but there have been disasters such as the 2014 Mt Gox hack where 460 million bitcoins were stolen.

Physical Wallets

This is the safest way to store your tokens. Token wallets are completely offline. Physical wallets don't support every token, so you need to see if the token you want to keep is supported by the wallet.