4 Crypto Concepts for the Noobs. My experience of investing in crypto as… | by Zain Ahmed | Jul, 2022

My experience of investing in crypto as a beginner

Photo by Kanchanara on Unsplash

I have been a risk-averse investor throughout my investment journey. But with cryptos entering the market, I had been getting FOMO.

So I decided to explore and invest a small amount in crypto last month.

Allow me to share my experience and some basic crypto features that you should know before putting your money in Bitcoins, Ethereums or Dogecoins.

1. Blockchain & Cryptocurrency – The tech everyone’s talking about

Since this is not a tech blog and I am no expert, I will keep this simple. Blockchain helps decentralize money and transactions.

In layman’s words, banks and institutions help us validate our account balance, transactions, liquid wealth, etc.

In the world of cryptos, this validation comes from the people on the network.

Blockchain helps collect everyone’s vote to establish that you have done a transaction.

This, in turn, eliminates the bank’s or any central agency’s role in facilitating a transaction. Thereby, decentralizing the whole crypto world.

2. A Crypto Exchange

Just like the NYSE, Nasdaq and London Stock Exchange; the cryptocurrency shares are traded on crypto exchanges

To buy shares of your chosen cryptocurrencies, you need to register on one of the crypto exchanges out there.

I found it very easy to register on these apps, with my social identification credentials.

Since I am from India, I explored Coin DCX, Wazirx and Coinbase. I also created a Vauld account but could not use it due to crypto regulations.

There are around 500 exchanges worldwide.

Do some research on the crypto exchanges in your geography and finalize the best that aligns with your needs.

3. Cold Storage or Cold Wallet

This was something very techie for me. When you buy some currency shares through an exchange, they will be stored in the exchange’s wallet.

Given the volatility of cryptos, exchanges sometimes freeze withdrawals, pause peer-to-peer transfers or shut down totally due to losses.

This is where the cold wallet comes in handy. You can buy crypto on exchanges and transfer it to a cold wallet.

In addition to securing your crypto from volatility, it also protects your currencies from getting hacked.

Since these are offline vaults, they are much more secure than online exposed wallets.

4. Choosing the Cryptocurrency

Honestly, I am very new to cryptocurrencies. I tried to play safe and opted for two cryptos with the highest market share – Bitcoin and Ethereum.

Again, I am no expert and you absolutely do not have to follow what I did.

I was doing it for the first time with a very small amount. There is no solid research behind choosing Bitcoin and Ethereum.

Final thoughts

I invested $ 120 (INR 10,000) and it has been exciting to see that small amount go through a roller coaster ride.

10% profit in 7 days and standing today at 4% loss on the 14th day.

I would surely suggest everyone to try their hands on crypto with a small amount of money. It’s a great learning experience.

And before you do that, make sure you have understood the below 4 concepts-

1. Blockchain and crypto

2. Crypto exchanges

3. Cold wallets

4. Bitcoin, Ethereum and other kinds of crypto

And below are two bonus lines to pump you up –

Cause, At least as a rich man, when I have to face my problems, I show up in the back of a limo wearing a $ 2000 suit… and a $ 40,000 gold watch!

-The Wolf of Wall Street

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