This is where your crypto is stored. A wallet will have an address associated with it. An address will look something like:
Bitcoin address: 1Q8mwuMQBL3YXXBFrfpUzVWjK94me21wvd
Ethereum address: 0xD13AB3120AED3EF556a7dc92Cb750431f9Fd4860
Ravencoin address: RHHJB39fW43YzxLm4zg6UnScYgM7LaZNNK
A wallet can be found on your exchange account, it can be a physical device or it can be a 3rd party service. Think of a wallet as a place where your crypto will be stored. Since crypto is virtual, a wallet may be a string of characters known as an address.
This is where you’ll go to buy and sell cryptocurrencies. There are fiat-to-crypto exchanges like Binance.us and Coinbase and crypto-only exchanges like Uniswap. In order to get started with buying crypto with dollars (fiat), you’ll need to setup an account on a fiat-to-crypto exchange.
As you can see, different coins have different address formats. Some have constants like Ethereum will always begin with "0x” while Ravencoin addresses will always begin with “R”.
Before we begin, let’s address some of the risks:
Often times when dealing with the various components of cryptocurrencies - wallets, exchanges, etc. there is no customer support if you lose a password, passphrase, seed phrase or private key so you’ll want to make sure you keep good records from the beginning since you are the one who will be in charge of your cryptocurrencies. This is known as being self sovereign. You’ll want to protect your crypto with your life.
Keep good records - emails, login credentials, private keys, seed phrases all should be kept in a place where you can easily access them so start by keeping records in a good place. I use a fire safe to keep a physical copy of my credentials and keep the key hidden. If you write down this critical information, be sure that your handwriting is legible. Ensure characters like 0 and O, 1 and l, etc. are distinguishable.
Create instructions for someone who may not be familiar with crypto to access it in the event of your untimely death.
NOT ALL CRYPTOCURRENCIES ARE CREATED EQUAL
Because I’ve worked on the inside of a few different cryptocurrency projects, I’m a little more jaded than most when it comes to investing in crypto. Here is what I look for:
Getting involved in crypto can be incredibly exciting. There hasn’t been anything in my lifetime that has offered such incredible gains while also intense volatility.
FIRST THINGS FIRST
Create a new email address for each exchange you plan to create an account at. I recommend protonmail.com for this. It’s very secure and free to use. I may choose a format like email@example.com (“mts” for my initials, “21” for the current year, and “binance” for the exchange). Be sure to create a new, unique password for each email you create.
Also, very important, don’t use these email addresses for anything other than for exchange registration. This will help minimize getting scammed.
Setup Exchange Accounts
Different coins and coin pairings will be offered on different exchanges. Creating accounts at multiple exchanges will allow you to be ready to buy a particular coin when it becomes available on a particular exchange. Below are the exchanges I recommend setting up accounts on:
If you want to start with the 2 exchanges I primarily use, begin with Binance and Coinbase.
You’ll want to enable 2 Factor Authentication everywhere possible. I prefer Google Authenticator (app). This will give you an added layer of security. To be even more secure, download the Google Authenticator app on another phone other than the one you’ll be accessing your exchange accounts with.
Coin Pairings and Pricing
On Binance.us, all coins are paired against USD while only some are paired against BTC. Let’s look at Ravencoin (RVN). On Binance.us, RVN is only paired with USD. This means you’ll need USD to purchase RVN. This is simple since you can link your Binance.us account with your bank account for easy deposits.
Different exchanges offer different coins and different coin pairings. For instance, currently, the only exchange accessible to US residents that offers a BTC pairing with RVN is Bittrex. This is why it’s important to have accounts setup at multiple exchanges.
Pricing is expressed in terms of both dollars and sats. For example, currently, Ravencoin is currently $0.133 or 0.00000268 sats. "Sats" is short for "Satoshi's" which is the smallest denomination of a Bitcoin. Think of it as a penny being the smallest denomination of a dollar. If you were going to buy RVN with dollars, it would cost you $0.133. If you were planning to purchase with BTC, it would cost you 0.00000268 sats.
Once you buy cryptocurrencies, you’ll need a place to store them. For the sake of simplicity I recommend leaving them on the exchange in your wallets there, provided that it’s a reputable exchange like the ones mentioned above. If you amass large crypto holdings, you’ll want to have a storage strategy to minimize risk. We can talk about that at a later point in time.
Just so you’re aware, other places to store crypto are hardware wallets and web wallets.
Setup unique email for exchange registration
Download Google Authenticator app (on secondary phone if possible)
Register at exchange
Verify identity and address at exchange
Link bank account to exchange
I've been involved in cryptocurrencies since 2015 and enjoy helping others learn about this exciting technology.