Bitcoin For Dummies

How To Buy Your First Crypto

Golden bitcoin coin in fire flame, water splashes and lightning. Bitcoin Gold blockchain hard fork concept. Cryptocurrency symbol in storm illustration with peer to peer network background.

So you finally decided to get on the Bitcoin bus? Excellent decision.

Bitcoin was originally created by the mysterious Satoshi Nakamoto, who outlined the technology in a 2008 white paper. No one knows if Satoshi is an actual person, or a team of people but bitcoin is a very simple concept: digital money that allows for secure peer-to-peer transactions on the internet.

Some of the key features:

Bitcoin is decentralized: any two people, anywhere in the world, can send bitcoin to each other without the involvement of a bank, government, or other institution. Making taxation next to impossible. 😁

Every transaction involving Bitcoin is transparent and kept on record on the blockchain, which is similar to a bank’s ledger, or log of customers’ funds going in and out of the bank. In simple terms, it’s a record of every transaction ever made using bitcoin.

The Bitcoin blockchain is distributed across the entire network. No company, country, or third party is in control of it; and anyone can become part of that network.

There will only ever be 21 million bitcoin. This is digital money that cannot be inflated or manipulated in any way.

It isn’t necessary to buy an entire bitcoin: you can buy just a fraction of one if that’s all you want or need.

You may have seen bitcoin recently causing waves in the media due to large increases in value. Bitcoin is still in early adopter phase, which means only a small percentage of the global population is using bitcoin. Thats great news because it means that you can still get in on the ground floor. Bitcoin has just begun to approach its baseline value. Once Bitcoin reaches saturation… that is, once the general public is educated about what bitcoin is and also using bitcoin we will see what the base value is. Some analysts expect Bitcoin to level out at $500,000 per bitcoin once it hits mass adoption.

Right now there seems to be a lot of volatility in the bitcoin market, the price fluctuates somewhat but these are just growing “pains.” Take a look at the last 5 years of growth, every time bitcoin adjusts downward the media is full of headlines about “bitcoin crashes.” I laugh every time I see these headlines and immediately buy more bitcoin.

Bitcoin 5 year growth as of 2/6/21
Bitcoin 5 year growth as of 2/6/21. Click the photo for todays charts.

 

So I want to make clear something that tends to confuse crypto newbies. There are exchanges and there are wallets. Most exchanges offer wallets in their software, but you don’t need to create an exchange account to have a wallet. Your exchange account is similar to an investment account with a stock brokerage firm. You fund your account and then tell your broker what stocks you want to buy. Crypto exchanges work the same way. As I mentioned before, I stay away from exchanges because I don’t want my crypto transactions reported to the Federal Government. Check out this video to learn more about my point of view regarding crypto and government.

Ok let’s get down to business… first thing you need to do is download a wallet. Exodus is my favorite wallet for both IOS and Desktop. I have tried a bunch of wallets and I just love the look and feel of Exodus. Its interface is intuitive and user friendly. Check out this quick tutorial on how to download and set up Exodus. (This is in no way a sponsored post, I just really love Exodus 😂)

Make sure you write down your back up phrase ON PAPER and put it in a safe place like with your birth certificate or other important documents. Way back when Bitcoin was $5 I bought $50 worth. I had it in my wallet on my iphone 3. I didn’t write down my key and my iphone crashed. Needless to say I lost those 5 bitcoins which would be worth about $200,000 as of this writing. Learn from my mistake. WRITE DOWN YOUR BACKUP PHRASE! I could have bought a damned Tesla! 😭

Ok now you have your wallet set up… how do you buy bitcoin?

The two main ways you can buy bitcoin is through an exchange or via private sale. I have never bought from an exchange. Firstly because crypto currency exchanges are subject to “Know Your Customer” regulations, which means the US Federal Government requires these companies to collect information about you and report your crypto activity to the IRS so you can be taxed on your gains. I have no intention of giving the Federal Government a single penny they can put towards buying bullets and bombs. I ONLY buy private sale.

Ideally I prefer to purchase from people I know. There needs to be a certain trust factor. Im going to be sending someone money and expecting on faith that they send me the crypto. So networking with other crypto enthusiasts is essential, not only will you find others to trade with, you will learn a lot from the others in these groups like Crypto Trading Agora on Telegram.

So you have found someone to trade with. Make an agreement with them about how you will send them USD. Usually through apps like Paypal or Venmo. Now you want to give them your receiving address so they can send the bitcoin to your wallet.

Open up Exodus. Usually it opens to your Portfolio screen. Tap the crypto currency you want to receive.

You will notice on either side of the screen an up and down arrow. The up arrow is for when you are sending bitcoin. The down arrow is for when you want to receive bitcoin. Hit the down arrow.

On this next screen you will find a QR code as well as a long string of numbers which is your receiving address. When you are trading crypto in real life you can have the person scan your QR code. If trading virtually you can tap the number string and it will copy it to your clipboard so you can paste it in your chat with your seller.

Once you have provided the receive key to your seller you can sit back and enjoy the sound of your wallet collecting beautiful, decentralized money!

One of my favorite things about crypto currency is the excitement. Most peoples relationship with the U.S. Dollar is strained at best. Most people feel they never have enough dollars, we are often worried about paying our bills and so we experience a lot of resistance when it comes to the U.S. dollar. In my view money is just energy. You take your time and energy and put it into labor or an investment and turn that labor into money. It’s a measurement of the value you have created. When it comes to cryptocurrency people who use it are excited to do so! We are excited that the government cant tax or steal it. We are excited that its the future of money we can participate in now. We are excited by the freedom that decentralization brings. There is so much positive energy surrounding crypto currency. Its a beautiful thing! Enjoy your new bitcoin.

If you want to learn how you can spend crypto currency click here.

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