Getting Started with Cryptocurrency

Why all the ‘hype’ around cryptocurrency?

Cryptocurrencies are essentially digital currencies and have become attractive investments, because they often grow in value and can be exchanged for other cryptocurrencies, products or fiat (traditional, central bank issued currencies like dollars or pounds). Cryptocurrency coins or tokens exist as transactions on large, decentralised ‘databases’ called blockchains, shared out across many computers. As a result of some of the ‘older’ cryptocurrencies like Bitcoin and Ethereum showing huge returns, more people are being drawn into the world of crypto than ever before. 

Cryptocurrencies are decentralised – so essentially have no central controller or owner, like a bank or financial authority, overseeing and restricting participants. This is their main advantage over the tightly-controlled, centralised, surveilled, and debt-based financial systems we currently have.

Cryptocurrencies use cryptography (special protocols that limit how information can be viewed or manipulated). The decentralised aspect of blockchain technology means transactions are spread across the network, and must be verified many times, thus increasing complexity and security. 

Not all crypto is currency. Crypto, digital currencies and blockchains are constantly evolving, with new technologies, algorithms and software available almost every day. The concept of blockchain is increasingly being used and developed for applications other than currency or payments, such as smart contracts, supply chains, power grids, election votes, and so on. 

How do you get started in cryptocurrency?

In order to get set up to start trading in cryptocurrency, you would usually need the following in place:

  1. You will need to set up an account with one of the many fiat-to-cryptocurrency exchange platforms (we do not endorse any particular one, but some of the most popular sites are crypto.com, wirex.com, coinbase.com, or similar in your country). This often involves you providing some details and them verifying your identity (depending on which country you’re in), which could take anything from a few minutes to a few days.
  2. You must have a bank account linked to a debit/credit card which you can use to buy cryptocurrency with – some platforms allow you to link your bank card to your exchange account for convenience.
  3. You will need to install a digital wallet on your computer or mobile phone, or obtain a separate hardware wallet. This basically acts like secure file storage, but specifically for cryptocurrency. This is not essential for the process, as often the fiat-to-crypto exchange platforms will let you store your cryptocurrency there, but to be part of the decentralised revolution, you’ll need to move your cryptocurrency assets into your own wallets, away from the prying eyes of centralised and/or controlled platforms. If you want to be part of the UCT tokens revolution, you’ll need a Matic Mainnet configured Metamask wallet – view our tutorial videos here.
  4. It goes without saying that you will need a secure, stable internet connection.
Once you’re ready, you’ll need to decide which cryptocurrency you’d like to purchase. You can spend as little as a few dollars to larger amounts, depending on your budget and bank limits. The exchange platform you signed up with will often provide tutorials to guide you through the buying process on their platform. Once you’ve purchased your cryptocurrency, you have a choice to leave it in your exchange account (generally not recommended), or send it to your external online/hardware digital wallet (a better option, as then it’s in your control).

What about fees?

Note that there will usually be fees to purchase crypto at an exchange platform, and more fees to send it to your external wallet. When you transact with crypto (for example, send some to someone else’s wallet, or exchange one crypto to another), there are gas fees to pay – payable in the native token of the network. For example, if you’re transacting on the Ethereum Mainnet, you’ll pay gas fees in ETH. Or if you’re transacting on the Polygon / Matic Mainnet – which we use for UCT tokens – you’ll pay gas fees in MATIC (you can purchase ETH and/or MATIC from most exchange platforms).

Before you do anything else, here’s some good advice for ‘neophytes’.

  • Only use website links which you’re sure go to legitimate cryptocurrency exchanges or sites.
  • Don’t invest more than you can afford to lose – like any other investments, cryptocurrency can be risky and you could see large gains or losses.
  • Keep your digital wallet passwords and seed phrases secure, in more than one place, and in digital versions as well as on paper.
  • Learn as much as you can before diving in, so you know what you’re doing. This ‘Bitcoin for Beginners (2021)’ video (below) talks you through all things cryptocurrency, Bitcoin, and blockchains for beginners.
Comments are closed.