Buying cryptocurrency ===================== .. post:: 2020-08-17 :tags: cryptocurrency, Bitcoin :author: Adriaan Rol I have always been very skeptical about cryptocurrencies such as Bitcoin. However, now that `printing money `_ is considered a valid response to the corona crisis, and is likely here to stay, I like the idea of having a currency of which there is a fixed supply. Previously I considered cryptocurrencies too speculative, mostly because I did not, and still do not, fully understand how they work. I am investing a small amount into cryptocurrencies as an experiment, where I intend to learn about these instruments, and potentially make a small profit. I found `Investopedia `_ to be one of the best resources on getting started with cryptocurrencies in general. Here I outline the process of buying my first crypto. .. TEASER_END What to buy? --------------------------------------------- The first thing to look into when considering cryptocurrencies is what to buy. In this context, I intend to make a long-term investment as this is the investing strategy I most believe in, partially because I have better things to do than watch the markets all the time. When getting more specific on the composition of my portfolio, I found `this `_ article from cryptopotato quite useful. It explains some of the basic things to look at when making a crypto portfolio. The key criteria listed in this article are the market cap, utility, daily volume and transactions, ongoing development, and market news and sentiment. The key takeway I get is that bitcoin is still the most important contribution in a well balanced portfolio at ~50%. I don't want to copy the suggested portfolio as part of the reason for me to do this is to learn about crypto currencies. One of the key recommendations I ran accross was to read the whitepapers of the different currencies I invest in. For now I'll start with Bitcoin and Ethereum as these are the most common names and will slowly expand my portfolio after that. I have added Litecoin and Ripple (XRP) as these are most suitable to use in actual payments. .. include:: plotly_figs/crypto_portfolio.rst How to buy it and how to store it? --------------------------------------------- There are a lot of discussions on security and trusting a company with your money in the crypto sphere. Most notably spurred by the story of `Mt. Gox `_. However, for beginners pretty much all resources point me towards `coinbase `_ as both an exchange and one of the most reliable wallet holders. As both my investment is small, and I am a beginner, I am going with coinbase.