Starting Your Crypto Journey
The technology that powers cryptocurrencies has the power to alter our human journey and support a multitude of humanitarian issues. In order to understand the blockchain-- you have to use it.
Several core pillars of our society are collapsing, shifting, and redefining themselves. Centralization is becoming a hindrance to economic growth and the endless printing of dollars to support the pandemic-ravaged economy is causing confidence in fiat currencies across the globe to wane. While I support the massive government spending necessary to help the citizens navigate the current economic collapse, at some point, inflation will come knocking.
We can explore those statements in depth later, but for the sake of this article, I want you to know that embracing cryptocurrencies is part of our adaptation to the inevitable shift of our economic systems to digital currencies. Before we hash out the details of purchasing your crypto (pun intended), let’s step out for two seconds and look at the big picture.
Decentralized Currencies Lift Us All
Our economic systems are old and antiquated. To participate in wealth accumulation, one must play the game of “The Centralized Man”-- bankers, compounding interest, fiat money backed by nothing but “trust” in government, and gatekeepers at every turn. For a large portion of the global population, participating in the existing monetary system and accumulating even small amounts of life-altering wealth is not possible. Millions and millions of people are locked out of the ability to deposit a few dollars into a savings account to accumulate any type of wealth. That’s simply reality.
Now shift your gaze a bit. You’re most likely reading this in a developed country where banking accessibility isn’t a huge issue for you or your community. Look across the ocean to a small village in Africa. Ten years ago, a farmer in this village had no means to access a bank account. It simply didn’t exist in his village, nor did he have the paperwork necessary to open an account when he visited the big city once or twice a year. Even if he could open an account, how could he make regular deposits? It wouldn’t be safe to store the small amount of currency he earns selling produce to his fellow villagers under his mattress and then travel the 2 days across volatile regions with cash to deposit to his bank. It’s simply not practical or possible.
Five years ago, our farmer’s life shifted. Someone in his village introduced “DevCoin” (not a real coin), a cryptocurrency recognized throughout parts of the African continent, including his country. His neighbor showed him how to set up the DevCoin wallet app on his phone, he gave the man some cash in exchange for the equivalent digital coins (DevCoin) and our farmer gained an instrument that functioned as a bank account. As long as he kept his account number for that coin wallet safe and secure, he could make digital deposits and purchase goods with his phone. The next day, a customer stopped by his vegetable stand and purchased 10 ears of corn. Our farmer opened his DevCoin wallet on his phone, showed her the “Receive” QR code and she opened her DevCoin wallet, clicked the “Send” button, and scanned his QR code with her phone’s camera. Done. His money was now safe in his account, attached to his hash number in his digital wallet, and he could simply leave it securely on the DevCoin blockchain.
A month later, our farmer traveled to a neighboring village that was slightly larger with more shops. He had a busy month at his vegetable stand and was able to carry his earnings with him safely in his digital wallet. He walked into the home goods market and purchased lightbulbs, wood, nails, and pipes to make improvements to his home and his farm stand. Purchases like this weren’t possible several months ago because he was not able to accumulate any wealth or travel safely with his money. He returns to his village and installs lightbulbs in his modest home for the first time in years. He was able to begin installing indoor plumbing into his home and repair the cracks in the walls from last winter’s storms.
All because, for the first time in his adult life, he was able to accumulate wealth using an instrument that functioned as a bank, but without the gatekeepers of traditional banking.
Our story illustrates the game-changing nature of the underlying technology of cryptocurrency. Yes, crypto is a form of monetary exchange, but the true value of this tech is the underlying blockchains crypto is built upon. The blockchain itself can not be hacked, altered, or removed once a transaction occurs. I don’t need to trust that the person buying my goods or the third party service (think PayPal) will uphold their end of the bargain and transfer the money to my bank account.
When you purchase goods from me using crypto, the transaction happens fast and is immutable. Now, the computer where I keep my digital wallet can be hacked and the money stolen or I can lose my hash number where my coins are attached to me and there’s no way to recover them. That’s the risk. Without your hash number, you don’t own your coins.
I could write an entire book explaining that last paragraph. For now, just know that when you purchase any cryptocurrency, you will be assigned a hash number that is yours only and the coins attached to that hash are also yours-- unless you lose that hash number.
Since this article is written for beginners, I’m going to recommend that you get started in crypto by using an app called CoinBase. Coinbase is essentially the gateway drug for many to enter crypto. To be clear, you kind of "own" the coins you purchase, but if they remain in the Coinbase app, you don’t have full custody of the coins. That’s a much deeper conversation and for the more advanced crypto user.
Start with Coinbase and in a few weeks or months, as your accumulation of coins grows in value, remove them from Coinbase and place them on a digital Ledger (a very safe USB device where you store your coins), a digital wallet, or in cold storage (disconnected from technology— write your hash number on a piece of paper or etch it into metal and place it in a fireproof safe or safety deposit box).
To use Coinbase, you will need to prove your identity (KYC) and attach the app to a bank account. I get that this is contradictory to our story above and to the “anonymity” that crypto inherently provides, but this is how we start.
Click this link to start your account and we both get a few bucks to play with. You’ll go through a secure identification process, called KYC and required for US-based apps like this, and you can attach your bank account. To be clear, this is a safe app, but I do not attach my main accounts to Coinbase (or any online payment portal, like Stripe or Square, everything is hackable). I use secondary accounts that do not access my full funds.
Please, please, please— use a real password with multiple letters, numbers, symbols that are not easily hacked. And if you place the app on your phone, you MUST keep that phone up to date! If your account is easily hackable because you used your kids' first names and birth dates, you will have your money stolen at some point.
Once you’re ready, simply buy a few coins within your app and get started. The app will walk you through the buying and trading process, and it’s designed for non-technical peeps to use easily. Coinbase only has a handful of the more solid and trusted coins listed in their buying portfolio. Just enough to get your feet wet. You can also do the "earn free coins" exercises in the app and I highly recommend doing so!
You do not need to purchase whole coins. Coinbase will let you designate how much you wish to spend in USD (also known as fiat) and will allocate the equivalent amount of your chosen coin into your portfolio.
Over time, you may find that accumulating different altcoins (alternative coins, also called shit coins for good reason) is something you wish to explore. In that instance, you’ll need to open an account with a “trusted” exchange, transfer your main trading coin (BTC or ETH) into the exchange from Coinbase, and then start trading. But don’t leave your coins in the exchange if you’re working in large amounts.
In an exchange, and a centralized app like Coinbase, your coins are stored in group wallets. If someone hacks into the exchange (which happens regularly on exchanges) and accesses the group wallet where your coins live, they can steal your coins. It’s very rare, but it can happen. Or, the company can decide to de-list a coin for whatever reason, and then you’re out of luck. We saw this in January 2021 with Ripple (XRP). Coinbase and several other exchanges delisted the popular coin because of pending SEC lawsuits against XRP.
You don’t truly own your coins until they are in your personal digital wallet or in cold storage. Again, this is too much information for the beginning, but understanding the very broad concept is necessary for your peace of mind and the security of your investments.
My basic rule of thumb is that if I’m working with less than a couple thousand dollars, I leave it in the exchange or Coinbase so I can easily move coins around and buy and sell as I wish. Once I surpass that, I move them to safer custodial locations. I use Exodus and MetaMask.
A simpler way to begin buying Bitcoin is to use the CashApp. Simply download the app, confirm your identity, connect a payment source and then purchase Bitcoin. I gave this a whirl last week and it took about 15 minutes. I then removed the BTC to my Exodus wallet so it’s safely in my wallet and my custody. I’m new to CashApp, but it was created by Square and I’ve used their products for many years to run my craft business.
I’m not here to give you investment advice and for the love of all things Holy, be mindful of how you invest in crypto and have a strategy in place to make logical non-emotional trading and investing decisions (easier said than done, I know). I entered this space in 2017 and worked for a blockchain dev shop in 2017-18 and saw the highs and lows of the massive crash in late 2017. People lost their asses. People also buckled down for the long haul and held their coins safely in their wallets and waited for the bounce. That last group of people who were mindful and deliberate— and believed in the underlying tech— are sitting very pretty right now.
It’s simple. The blockchain technology that powers cryptocurrency is a powerful and humanity-altering tech once it matures. That’s what excites me the most. The underlying technology and what is possible when decentralization becomes mainstream and how such a transformation can benefit humanity is my WHY for teaching blockchain to as many people as possible. Know your WHY for entering this space and let it guide your bottom line.
To see case studies and projects using blockchain to tackle some of the most pressing issues society faces, please visit Consensys and see past and present blockchain for social change projects.