Hi, my name is Alice and I’m a cryptocurrency addict…
You by now have heard about Bitcoin and the dizzying amounts of money investors have been making out of this obscure asset class. Lately, cryptocurrencies have leapt out of the shadowy corners of the internet and it seems like everyone is talking about them. Major investment firms, hedge funds, celebrities, and billionaires are all getting in on the action.
Once I heard that Tesla’s Elon Musk had procured the modest sum of about 1.5 Billion dollars worth of Bitcoin, I decided to tiptoe my way into the exciting world of cryptocurrency and now I can’t stop.
How to Get Into Cryptocurrency
To say my first foray into cryptocurrency was overwhelming would be an understatement. Everyone knows Bitcoin, but there are literally thousands of other cryptocurrencies that all do different things. Deciding where to begin and what to buy is no easy task.
However, after doing a bit of research I realized the cryptocurrency markets are very similar to traditional stock markets.
You see, just like the stock market has blue-chip stocks, namely big Fortune 500 companies like Google, Amazon, and Apple, cryptocurrency also has blue-chip coins. These are the big stable coins that have the most investor interest and are likely to be the safest bet.
I kept my search to these blue-chip coins and narrowed it down to two candidates: Bitcoin and Ethereum.
What is Bitcoin?
If you have shied away from investing in cryptocurrency because you don’t understand the technology let me put that fear to bed right now.
Bitcoin is money. It’s as simple as that. You can buy things with it, you can send them to people, you can save them, and you can even earn them.
Bitcoin isn’t even really that different from the money you have in the bank right now. You see, your bank keeps a record of your account balance, money going in and out, and the transactions you do right? Well, Bitcoin does the same thing, however, instead of a Bank keeping the records, Bitcoin’s records are kept by hundreds of thousands of volunteers all over the world all connected to the Bitcoin network.
Bitcoin is money minus the Bank.
What’s more, there’s a limited amount of Bitcoin that will ever exist. Unlike traditional money that can be printed at will, there’s a fixed amount of Bitcoin that can be minted. This means that Bitcoin has become the number one hedge against inflation and why so many serious investors are adding it to their portfolios.
What is Ethereum?
Just like traditional stock investments should be diversified, cryptocurrency is no different. I didn’t want all my eggs in the Bitcoin basket so I chose to spread my cryptocurrency investment into Ethereum.
Ethereum is just like Bitcoin. It’s a currency that works the same way as Bitcoin, however, it has two cool tricks up its sleeve.
Firstly, the Ethereum network can run apps. By now you know cryptocurrencies are just money minus the bank. Well, imagine Facebook minus Mark Zuckerberg, or Uber with nobody in charge, or Airbnb without anybody running it. Ethereum can do all that and more.
Furthermore, Ethereum has a nifty little feature called a smart contract. A smart contract is a contract that can be created on the Ethereum network whereby a transaction doesn’t go ahead unless the conditions of the contract have been met. This means you can engage in transactions without having to trust if the person on the other side of the transaction is going to keep up their end of the deal. With Ethereum they have to.
How to Buy Cryptocurrency?
This was the fun part and also the scariest. Just like there is an infinite amount of cryptocurrencies you can buy, there’s also an infinite number of ways you can buy them.
I learned there are a few key issues you need to be aware of. Since cryptocurrency is money minus a bank, if you make a mistake or lose your coins, there isn’t exactly a number you can call up to fix the issue. You need to be a bit more careful with handling cryptocurrency.
For this reason, I chose to buy my coins through Coinbase. The US Government-regulated Coinbase.com is the largest site for buying and selling cryptocurrency and has the most users. It also has one of the most secure Cryptocurrency wallets meaning you can store your coins with Coinbase and know they’ll be safe.
Buying cryptocurrency through Coinbase was surprisingly easy. All I had to do was sign up for an account, confirm my identity, and transfer some money onto the site via one of their payment options.
Once all that was done, It was just a matter of selecting which cryptocurrencies I wanted to buy and how much of them I wanted. Then all I did was click the buy button and I became the proud owner of my very own cryptocurrency.
South Africa Cryptocurrency Platforms
In South Africa, you can use several local platforms that support a South African bank account and local currency (Rand).
Some of the popular ones include:
- Luno – available in over 40 countries, supports SA Rand, SA bank transfer, and is Africa’s biggest cryptocurrency platform. You can buy/sell and store BTC, ETH, and others.
- Paxful – This a peer-to-peer Bitcoin marketplace, also worldwide, and now supported in South Africa. You can covert SA rand into BTC.
- VALR – Available in South Africa and supporting SA bank accounts, VALR has over 50 cryptocurrencies supported on their platform.
- Coindirect – has competitive pricing, supports over 40 cryptocurrencies, 24/7 trading, settle payments/withdrawals in ZAR.
Where to now?
If you have wanted to invest in cryptocurrency, don’t let the technical jargon and the scope of the technology stop you. Cryptocurrency investing is not that complicated.
The hardest part of being a cryptocurrency investor is just how addictive these coins can be. We are currently in the middle of a massive bull market and prices keep going up. I find myself constantly checking coinmarketcap.com (a site that lists every cryptocurrency in existence along with their prices) to see how my portfolio is doing.
I’m even thinking of buying some Chainlink on Coinbase. Chainlink is a cryptocurrency that enables different cryptocurrency networks to talk to each other and is one of the hottest coins on the market right now.
If you’re thinking of dabbling in a bit of Bitcoin go for it. However, you have been warned. Cryptocurrencies are addictive. You could become so obsessed you turn into the next Alesia Haas, Toni Lane Casserly, or Elizabeth Stark.