The DOs and DONTs of investing in Cryptocurrency

LoLth

A thread for users to post their advice / observations.

How should a newcomer to the topic choose a cryptocurrency to invest in?

How would an investor even start a risk assessment?

What hardware should a miner look at sourcing to start?

Prebuilt or custom/self build?


etc

Please post your opinions here to help the community. those wishing to discuss a particular aspect should create a new thread and post a link to it from here (this way the advice stays in one place and easy to read while the side discussions can take place freely without any restrictions of staying on the topic of basic/beginner information)

DeVore

DO learn what public/private key encryption is and how blockchain works... you are going to need to understand the operation of both to get anywhere (and to secure your investments!).

At a very very (very!) high level... here's something I wrote for the Institute of Directors in Ireland's blog on the two fundamental concepts behind Cryptocurrency.

https://www.iodireland.ie/news-events/blog/bitcoins-and-blockchains-directors

Dardania

Hopefully this is a helpful addition, but if not no worries if it’s deleted:

If you are a traditional world investor that wants to dip your toe in the world of bitcoin, there’s an ETF (actually an ETC) regulated in Sweden that tracks bitcoin:

https://xbtprovider.com

They charge 2.5% annual fee for this service (including doting bitcoin etc) and it’s available via DEGIRO etc.

Bigmac1euro

I found this guys videos very very helpful to understand the market,
If this advice is slightly off topic feel free to delete

He also provdes free courses for learning how to understand crypto

https://www.youtube.com/watch?v=zZ-KTx2ty18

enda1

DON'T Panic sell!
DO Buy the dip!

TheJackAttack

DeVore wrote: »

DO learn what public/private key encryption is and how blockchain works... you are going to need to understand the operation of both to get anywhere (and to secure your investments!).

At a very very (very!) high level... here's something I wrote for the Institute of Directors in Ireland's blog on the two fundamental concepts behind Cryptocurrency.

https://www.iodireland.ie/news-events/blog/bitcoins-and-blockchains-directors

What's your prediction on the future of the blockchain? 
Personally I think smart contracts are going to re-develop how the world works!

Dohnjoe

Don't put in more than you can afford to conceivably lose

Don't leave coins on exchanges

Don't move very large amounts in one go


Do make a plan before you buy and stick to it (rational buying over impulsive buying)

Do research the coin you will buy

Do print out and save records of your purchases (if you are going to pay tax on it down the line)

pro_gnostic_8

Dohnjoe wrote: »

Don't move very large amounts in one go

I kinda know your reasoning for this -- the possibility of making an address error etc when transferring a large amount. It probably does make sense to take very small amounts for safety reasons.
However, people should be aware that carrying out micro-transactions can be expensive in the long run. You are paying a transaction fee per each transaction. And equally significant, a lot of folk don't realise that when you do eventually "spend" that bitcoin you are paying an even higher fee because the Spend fee is calc-ed on the number of outputs that make up that Spend. I.E., if you withdraw ten amounts of, say, €20 worth of BTC from the exchange, then to spend that total of €200 in one go entails a tx fee based on the number of outputs (10 X €20's).

DeVore

TheJackAttack wrote: »

What's your prediction on the future of the blockchain? 
Personally I think smart contracts are going to re-develop how the world works!

I own a fair chunk of ETH and NEO

Smart contracts have the possibility to change some sectors significantly but it will take time. There is a lot of old infrastructure that needs to be replaced, adapted, dumped, reinvented before smart contracts can really come into their own. There are vested interests who wont want that to happen and may resist it but eventually they will co-opt the system in fear of being completely replaced by it. Same as is happening with Bitcoin, the financial institutions fight it but some are adopting it now because they fear NOT being in on the ground floor.

ETH *could* be the next level of transactional internet infrastructure or it could be Web 2.0 or Java and be overly weighed down and never reach its original potential. Given that these things are driven by smart, incentivised individuals or single companies, I think the former and I'm willing to bet some of my hard earned money on it. But its not this year and not next year either... those years will see proofs of concept and some (painful) growth.

Sorry, this is kinda off topic.

On topic: Research the team behind the coin, and the tech behind them too. Some coins are simply reskinned versions of say, Bitcoin or Eth and you might as well buy the original unless the new one has some key reason why its going to fit with a vertical market better.

Sabre0001

Is there a handy "how to buy your first coin" guide yet?

will56

Can anyone tell me if I'm doing this right.

Buying Eth/BTC/LTC/XRP on Bitstamp
Transferring BTC to Bittrex
Trading BTC on Bittrex for an altcoin

Assume Altcoin increases

Trade in reverse and cash out on Bitstamp for Euro

Is there a better way to do this ?

enda1

Kraken has about 3 times the BTC-EUR volume over Bitstamp

will56

enda1 wrote: »

Kraken has about 3 times the BTC-EUR volume over Bitstamp

True, but Bitstamp let me start with V Small amounts so I could get the hang of the system

ToxicPaddy

will56 wrote: »

True, but Bitstamp let me start with V Small amounts so I could get the hang of the system

I started on Kraken with €50, not a massive amount but was pretty straight forward to start out with.

Whelo79

Sabre0001 wrote: »

Is there a handy "how to buy your first coin" guide yet?

I second this. I can't get my head around the best way to go about it with wallets and encryption and all that stuff. I'm actually afraid I would end up losing it all stupidly somehow.

rickyjb

Bitstamp is very simple to start using if you want to dip your toe in the water. You can deposit directly from an Irish bank account with no fees and trading fees are relatively low (0.25%). Withdrawing back to your bank account only costs 0.90c per transaction.
Downside is it has a limited number of coins as listed above by Will56.
I was also very confused at the start and set up a wallet on blockchain before realising I didn't really need it if I just wanted to buy some coins. That said I've since withdrawn some bitcoin to buy something on fasttech so it has been useful.

pro_gnostic_8

Whelo79 wrote: »

I second this. I can't get my head around the best way to go about it with wallets and encryption and all that stuff. I'm actually afraid I would end up losing it all stupidly somehow.

You are quite right in being concerned about losing your coin -- more clever and experienced people than us have been conned, scammed, and thieved of their crypto assets.
You truly do need to become acquainted with protection and good practice before you even consider spending even a lowly €10 on crypto. Security is everything. You alone are responsible for you holdings as against fiat where your bank is responsible. I refuse to discuss Bitcoin with any of my friends until they educate themselves on security.

A brief outline I would advise to you:
Read up about wallets.
Do not store any crypto on a web wallet, a cloud wallet, an exchange wallet, or on blockchain.info. Do not ever store your coins on your PC.
Either use a paper wallet, or a hardware wallet. If going for a paper wallet, you should use an air-gapped computer to generate it or better still a computer that has never been connected to the internet. Alternatively to paper or hardware wallet, you could consider Electrum or Mycelium. I can't vouch for them, I have never used them.
All of this stuff is widely available to learn on Youtube or the net in general. Let Google be your friend.

After this, you can much more confidently approach buying your first crypto. As the poster above says, this step is quite straightforward.

ZeroThreat

pro_gnostic_8 wrote: »

You are quite right in being concerned about losing your coin -- more clever and experienced people than us have been conned, scammed, and thieved of their crypto assets.
You truly do need to become acquainted with protection and good practice before you even consider spending even a lowly €10 on crypto. Security is everything. You alone are responsible for you holdings as against fiat where your bank is responsible. I refuse to discuss Bitcoin with any of my friends until they educate themselves on security.

A brief outline I would advise to you:
Read up about wallets.
Do not store any crypto on a web wallet, a cloud wallet, an exchange wallet, or on blockchain.info. Do not ever store your coins on your PC.
Either use a paper wallet, or a hardware wallet. If going for a paper wallet, you should use an air-gapped computer to generate it or better still a computer that has never been connected to the internet. Alternatively to paper or hardware wallet, you could consider Electrum or Mycelium. I can't vouch for them, I have never used them.
All of this stuff is widely available to learn on Youtube or the net in general. Let Google be your friend.

After this, you can much more confidently approach buying your first crypto. As the poster above says, this step is quite straightforward.

Pro_gnostic - Depends on your coin type though, I have my BTC/ETH/LTC (which make up about 70% of my holdings) secured with a hardware wallet, but my neo is on the desktop neo gui wallet, and I also have small amounts of XRP, Vertcoin & ARK on desktop wallets.

Unfortunately there's no hardware support for this right now afaik.

pro_gnostic_8

ZeroThreat wrote: »

but my neo is on the desktop neo gui wallet, and I also have small amounts of XRP, Vertcoin & ARK on desktop wallets.

Unfortunately there's no hardware support for this right now afaik.

That is one of the reasons I don't dabble in these and other alts.
I won't touch anything that is not supported by Trezor. Perhaps that approach locks me out of some potential big gain on some obscure alt ............... but I do sleep soundly at night. :P

ZeroThreat

pro_gnostic_8 wrote: »

That is one of the reasons I don't dabble in these and other alts.
I won't touch anything that is not supported by Trezor. Perhaps that approach locks me out of some potential big gain on some obscure alt ............... but I do sleep soundly at night. :P

The likes of neo and ripple have large enough market caps to warrant them being supported though.

Dardania

Etherum available from the Swedish NASDAQ also for the last week: http://www.nasdaqomxnordic.com/etp/etn/etninfo?Instrument=SSE144581&name=Ether%20Tracker%20Euro%20XBT%20PROVIDER 

By the same guys that do an ETN for BTC: https://xbtprovider.com/

Ciaranimo

Whelo79 wrote: »

I second this. I can't get my head around the best way to go about it with wallets and encryption and all that stuff. I'm actually afraid I would end up losing it all stupidly somehow.

I found this guide to be pretty good, I'm still a beginner myself but it got me started!

https://howtobuybitcoin.io

SkySter

ZeroThreat wrote: »

The likes of neo and ripple have large enough market caps to warrant them being supported though.

Ripple is fully supported on the Ledger Nano S and NEO is in the works.

will56

Dardania wrote: »

Etherum available from the Swedish NASDAQ also for the last week: http://www.nasdaqomxnordic.com/etp/etn/etninfo?Instrument=SSE144581&name=Ether%20Tracker%20Euro%20XBT%20PROVIDER 

By the same guys that do an ETN for BTC: https://xbtprovider.com/

How does this work, I assume they're not operating as an exchange ?

Dardania

will56 wrote: »

Dardania wrote: »

Etherum available from the Swedish NASDAQ also for the last week: http://www.nasdaqomxnordic.com/etp/etn/etninfo?Instrument=SSE144581&name=Ether%20Tracker%20Euro%20XBT%20PROVIDER 

By the same guys that do an ETN for BTC: https://xbtprovider.com/

How does this work, I assume they're not operating as an exchange ?

correct - you buy it like you buy any traditional equity from a stock market. You need a brokerage account e.g. with De Giro. 
For me, who is highly apprehensive about screwing up a coin wallet, I am happy to outsource management to a third party, somewhat regulated by a recognised financial regulator.

pro_gnostic_8

"If you don't have possession of the private key, you don't own the coin".
These paper derivatives are something like rehypothecated gold -- you are holding nothing but paper. If the proverbial ever hit the fan, you could end up with nothing.
Worse, these instruments go against the philosophy and principles of crypto -- you can't "spend" them, transfer them, run them thru the blockchain. Crypto is intended to be disruptive of the stock market and the establishment system -- not to be a part of it.
Just an opinion.

Still Ill

Ok, just looking into this before possibly investing soon. Currently have a small amount of bitcoin (just a few hundred) on etoro. Just wanted to have a look at that to start with. I'm interested in buying some actual bitcoin to keep in a wallet along with some other coins. I've read that storing online and on mobile are the least secure methods, so would be more interested in desktop or hardware... So here's the question I have. What happens if you have one of these wallets and your hard disk/USB storage messes up? Are you just completely screwed or is there some sort of retrieval method?

SkySter

Still Ill wrote: »

Ok, just looking into this before possibly investing soon. Currently have a small amount of bitcoin (just a few hundred) on etoro. Just wanted to have a look at that to start with. I'm interested in buying some actual bitcoin to keep in a wallet along with some other coins. I've read that storing online and on mobile are the least secure methods, so would be more interested in desktop or hardware... So here's the question I have. What happens if you have one of these wallets and your hard disk/USB storage messes up? Are you just completely screwed or is there some sort of retrieval method?

When you first setup a hardware wallet you are presented with 24 keywords which are used to generate your private keys. You must write them down and store in a secure location. These can be used to retrieve the keys on a replacement wallet should the original get lost. The protocol used for this is open source and is not vendor specific. So you could retrieve onto a soft wallet as a temporary workaround while you are waiting for your replacement to arrive.

Dardania

pro_gnostic_8 wrote: »

"If you don't have possession of the private key, you don't own the coin".
These paper derivatives are something like rehypothecated gold -- you are holding nothing but paper. If the proverbial ever hit the fan, you could end up with  nothing.
Worse, these instruments go against the philosophy and principles of crypto -- you can't "spend" them, transfer them, run them thru the blockchain. Crypto is intended to be disruptive of the stock market and the establishment system -- not to be a part of it.
Just an opinion.

I do agree with you, and even share your opinion - centrally regulated fiat currencies are frustrating in how they're controlled. My problem with adopting crypto is that it isn't as user friendly (yet) as what it is trying to disrupt. There are too many potential mistakes and pitfalls that new users can make, and frankly I don't have the confidence I can do it correctly.

pro_gnostic_8

Dardania wrote: »

My problem with adopting crypto is that it isn't as user friendly (yet) as what it is trying to disrupt. There are too many potential mistakes and pitfalls that new users can make,

You are absolutely correct ! Anyone who says that direct involvement in Bitcoin is straightforward deserves a caning. Even buying bitcoin has a degree of difficulty -- it's not easy and it's certainly not instantaneous. Storing it securely in offline wallets using Linux O.S. with Tails usb sticks etc is a nightmare for the non-tech savvy folks. I get that.

And you are also correct that buying into a derivative like above is easy and fast. It simplifies the path to participation of many people into crypto without the learning curve needed to become directly involved in bitcoin ownership. It comes as no surprise that, for instance, the shares of the Grayscale Bitcoin Investment Trust trade at a premium of 50% ABOVE the value of the Bitcoin that it is tracking. When the SEC eventually gives the green light to bitcoin ETF's in the U.S., it will explode the rate of take-up in Bitcoin. The millions of American Mom-and-Pop investors will have at last a painless entree into crypto.

So yeah, ETN's, ETF's and other derivatives have a purpose; they make the experience of exposure to crypto a safe and easy one. Just that it's not for me, I'm not happy with giving custodianship of my coin ownership to a third party. I also want the benefits that direct ownership allows -- the transference aspect, the borderless conveyance, the censorship-resistance etc etc.

We're both singing off the same hymnsheet, I guess. Derivatives will suit the new incomers to crypto whilst direct ownership will suit others.

Laviski

perhaps add this pic the covers all the basics?

smacl

Slightly off topic, but if your using your mobile phone to capture photos of your passport and utility bills for verification purposes, remember to delete them afterwards. Phones are easily lost or stolen and leaving this type of info on them leaves you overexposed to identity theft. Probably obvious to most, but I certainly wouldn't have any private keys stored anywhere on my mobile phone.

jon1981

Great piece on Tokens (must have knowledge)

https://news.earn.com/thoughts-on-tokens-436109aabcbe

wotzgoingon

Sorry for the N00b question but near the start of this thread someone said do not leave coins on exchanges which is what I have been doing. Where do I store them so?

h0neybadger

wotzgoingon wrote: »

Sorry for the N00b question but near the start of this thread someone said do not leave coins on exchanges which is what I have been doing. Where do I store them so?

In a hardware wallet.
Either on your PC (backed up!!)
Or a USB hardware wallet
Or a secure USB stick
Or a paper wallet.

Google any of the above. Different coins use different wallets.

CryptoNewbie

Dohnjoe wrote: »

Don't put in more than you can afford to conceivably lose

Don't leave coins on exchanges

Don't move very large amounts in one go


Do make a plan before you buy and stick to it (rational buying over impulsive buying)

Do research the coin you will buy

Do print out and save records of your purchases (if you are going to pay tax on it down the line)

Don't leave coins on exchanges? Can you expand on that?

CryptoNewbie

LoLth wrote: »

A thread for users to post their advice / observations.

How should a newcomer to the topic choose a cryptocurrency to invest in?

How would an investor even start a risk assessment?

What hardware should a miner look at sourcing to start?

Prebuilt or custom/self build?


etc

Please post your opinions here to help the community. those wishing to discuss a particular aspect should create a new thread and post a link to it from here (this way the advice stays in one place and easy to read while the side discussions can take place freely without any restrictions of staying on the topic of basic/beginner information)

Still getting used to how this platform works, so I hope I'm posting in the right place. My 2 cents worth is:
1. Invest only what you can afford to lose. This too is the advice of Vitalic Buterin (Ethereum developer), who recently tweeted this: "Reminder: cryptocurrencies are still a new and hyper-volatile asset class, and could drop to near-zero at any time. Don't put in more money than you can afford to lose. If you're trying to figure out where to store your life savings, traditional assets are still your safest bet." Buterin has been criticised for this tweet, that he's trying to causing panic but sentiment is causing many people to throw caution to the wind and in my opinion, that could have disastrous financial consequences.
2. Only buy in a dip.
3. There are as many scams trying to catch you out and steal from you, than there are decent people discussing coins. Second and third guess yourself before handing over your hard earned money anywhere.

CryptoNewbie

Helpful! Thanks.

smacl

As with any activity on modern computers, be very careful what you download and install. For example, just because something advertises itself as a free wallet like spritecoin, doesn't mean it isn't altogether nastier.

CasimiR

DO take profits

MarkLotek

https://www.boards.ie/discussion/comment/105017620#Comment_105017620

Any information should be checked, so as not to lose your money because of your own credibility.

madmoe

https://www.boards.ie/discussion/comment/117710557#Comment_117710557

Thanks

punch bob

Has anyone here sent their crypto gains about 5-6 digits to their bank account?

How did you prepare it with regards to the bank? Did you have to hire an accountant re tax implications?

wotzgoingon

https://www.boards.ie/discussion/comment/118132145#Comment_118132145

Send the cash or crypto to me first and I'll check it out for you.

All serious I think it's up to you to file the tax and if you don't the bank may look into why you had a large figure moved in account from a crypto exchange and may rat you out and you will be in worse trouble then.

FastFullBack

It cost me .0005 BTC to move .0091 BTC from binance to trezor Model 1.

So about $30 to move $600.

Are those fees normal?

el diablo

https://www.boards.ie/discussion/comment/118148712#Comment_118148712

That sounds way too high. Should cost you no more than $5 BTC network fees currently. Does it tell you what portion of that is Binance or Trezor fees?

Ixlandia

https://www.boards.ie/discussion/comment/118132392#Comment_118132392

Yep agreed. Best thing to do would be file the tax and simply be honest here. I would contact my bank prior to transferring large amounts in 5-6 figure range, let them know what you intend to do. Banks are required by law to report large transactions (I think over €20000) as per anti fraud/corruption legislation.

Pawinho

Don't trade your BTC

FIAT->BTC👍️

BTC->ALT 👎️

ALT->BTC👍️

BTC->FIAT 👍️

ALT->FIAT👍️

FastFullBack

https://www.boards.ie/discussion/comment/118149235#Comment_118149235

It look liked it was all binance fees

Panrich

https://www.boards.ie/discussion/comment/118171523#Comment_118171523

Fees vary wildly depending on the coin. I have transferred a lot of Tron coins to my ledger wallet from Binance for cents but the ETH fees mean that it’s not economical to move those coins at present. I only have a couple of hundred Euro and the fees were mental.

MarkLotek

https://www.boards.ie/discussion/comment/118132145#Comment_118132145

I have not yet withdrawn this amount of bitcoins, but I plan to. Did you hire an accountant after all?