This article explores Frequently Asked Questions (FAQs) from our Facebook Group: Master the Crypto: Advanced Cryptocurrency Knowledge. Please do ask any questions on cryptos that you need help with and we’ll include the answers here!
1) Question: How do you buy cryptocurrency?
You can buy cryptos at any exchange. The easiest way and safest (in a legal sense) is Coinbase. Just go to https://www.coinbase.com/ and create an account. Link your account with your credit/card or bank account and you’re good to go! (See more: Crypto Guide 101: Choosing The Best Cryptocurrency Exchange)
We’re also in the midst of releasing a comprehensive guide on how to get started investing/trading in cryptocurrencies, since we understand that the crypto world is very intimidating, especially for starters. We’ll keep you updated!
2) Question: Cryptocurrencies keeps crashing and then rising. Is there cause for concern?
Cryptos are eerily volatile, and the challenging part is that they’re so correlated that it’s hard to hedge against cryptos within crypto land. However understanding their fundamentals as well as technical analysis (reading charts) could protect you from BTC/ETH’s adverse swings. (Read more: Dangers in Cryptocurrency Investing)
If you want to learn fundamental analysis, you will have to read the white paper of coins that you want to invest. It will explicate all the details about the coin its purpose and how it works. A word of caution, white papers are highly technical and would be hard to understand for the masses. As part of assessing market sentiment and understanding fundamentals too, you can also install reddit in your mobile and join crypto subreddits (like /r/EthTrader or /r/CryptoMarkets/). (See more: A Guide To Fundamental Analysis In The World Of Cryptocurrencies)
For technical analysis, you can learn from various online sources the basics. A good example is Investopedia : http://www.investopedia.com/university/technical/
3) Question: Crypto world is going from above my head 😐 Is it possible for a life science student to understand this stuff? What is it all about ?
The whole purpose why we made this group was to build a community where anyone can (and should!) understand and invest in the complex world of cryptocurrencies.
Cryptocurrency is a virtual representation of any for of value, be it money or assets, and the underlying technology is called Blockchain. There are hundreds of coins that solves specific problems or makes our lives better. The exciting part about this revolutionary technologies is that it will likely impact how we do things in the future, that’s why there’s so much potential. Especially so if you’re keen on investing. The returns you may potentially make is far more significant than any Investment alternatives out there.
I would love to share with you more about the industry and how to start. We’re currently working on a comprehensive guide for anyone to invest, and we’ll keep you updated once it’s ready! In the meantime, please feel free to ask away!
4) Question: Is it possible to invest in cryptocurrencies from India? I’m looking forward to get started.
The beauty of cryptocurrencies and its underlying technology is that anyone from anywhere around the world can take part, due to its decentralized nature. So you can start by opening a bitcoin account in India. From my quick research, there are a few exchanges that you may consider:
Buying Bitcoin using your domestic currency is always the first step. If you want to buy other alternative coins such as Ethereum, you can open another Crypto exchange account in USA, where you can buy other high-potential coins using bitcoin. (See also: Bitcoin’s Civil War: How and Why?)
5) Question: Anyone know where to get tick by tick, or at least, by the minute, trade data from the main exchanges globally for the top 10 currencies by market cap? Preferably, data since inception but, at the minimum, 6-12 months of data would be great.
a.Brave New Coin Digital Currency Indexed EOD: https://www.quandl.com/data/BNC2 Contains historical global price indexes for a number of cryptocurrencies
b.Brave New Coin Liquid Index: https://www.quandl.com/data/BNC1 Contains the first true historical price for bitcoin, built specifically for institutional use. History goes back to 2010.
6) Question: Which exchanges would you suggest for security? Which ones to avoid? How to tell a good one from a bad one?
A rule of thumb is that no exchange is fully secure. Exchanges can close in an instant and you could lose all your coins. The best way to secure your coins is to keep them in a specialized wallet that only you control. (See more: Guide to Cryptocurrency Wallets: Why Do You Need Wallets?)
In terms of the best exchange, I personally recommend Poloniex due to it having the largest liquidity (better price discovery) as well as a clean and simple user interface. However, they’re prone to lags and there are some concerns over the lack of transparency on the founders. The most “legally aligned” exchange should be Coinbase/GDAX (under the same company). However, it takes a long while for your fiat to be transferred.
In terms if telling a good one from a bad one, you can read the reviews online and decide which is a better option that suits you. Since the industry is quite new, there’s always possibilities of a lack of regulation and scams. Please look at our article here to enhance your security measures: Guide to Cryptocurrency Security: Activating 2FA)
7) Question: Poloniex won’t work for New Yorkers and a handful of other states too apparently. What other exchanges should I use?
Opinions on Coins & Exchanges
1) Question: Anyone has thoughts on ETC vs ETH? Both as a platform and investment opportunity?
(Taken from the article titled “What’s the Difference Between Ethereum and Ethereum Classic?”)
Ethereum started out as a single Blockchain (think of it as a single Lego tower that’s stacking up continuously). There are various applications that can be built on top of Ethereum, and one such application was a decentralised corporation called the DAO (Decentralised Autonomous Organization). The DAO operated like a hedge fund, essentially collecting funds to invest in the development of other applications. Unfortunately, the DAO got hacked, and a tune of over 50 million dollars was stolen.
At this point, the core developers had 2 options:
a) Allow the continuation of the chain, since the nature of Blockchain is that it is immutable, and cannot be altered
b) Reverse the transactions to prevent the hacker from profiting from the stolen funds.
It was unanimously agreed by the developing team as well as majority of participants in the system to choose the second option. Now to implement the second option, a hard fork is required. A hard fork is the splitting of the original Blockchain into 2 chains; the original one and the new chain. Ethereum Classic (ETC) is the original chain and Ethereum (ETH) is the new chain. The core developers, including the founder, went on and developed the new chain, and now when one talks about Ethereum they’re referring to the new chain. Those that sticked to the original chain (ETC) -a small community- was ideologically opposed to any change imposed on the Blockchain, since they argued that it’s nature should be immutable (not prone to change).
Is there any real differences?
In terms of functionality, both chains are the same since the originate from the same chain. It is more of a ideological difference. However it is important to take note that in terms of progress, the new chain would be more equipped with the latest updates and continual improvement of the system since the core developers are working on ETH, the new chain. From a user’s perspective it, it is vital to use a platform that has constant supervision and enhancement from the developing team. From a traders perspective, both coins can be appealing to profit from.
2) Question: Tell me a thing or two about Ethereum. Is Gemini a good place to set up an account and start trading?
Ethereum is a platform that allows anyone to create Decentralised applications (Dapps) or other types of tokens and coins on the Blockchain. Bitcoin is great at what it does best, which is to facilitate secure and transparent value transfer. However, Ethereum’s objective is to expand the use of Blockchain technology, not only limiting it to transferring values, but also fosters the development of other applications and technologies.
An simple analogy is that Bitcoin is like an app on your phone, while Ethereum is the app market, allowing developers to create any applications.
3) Question: I want some opinion from you guys for the following altcoins (a) Basic Attention Token (b) Steem (c) Quantum Resistance Ledger. I see definitely potential in those projects. What do you guys think? Long term I’m with ETH.
That’s a great list of coins you’re interested in! If I may, I would give a little insight on the fundamentals if the coins:
BAT: looks very promising since it aims to disrupt the digital advertising space. It looks like a long-term investment since acquiring adoption for BAT browser could take a while, and is fully dependant on the success of the team in making the idea a success. Proposing a complete adoption of its browser requires a strong propensity of benefit to users, which one could argue can be done through an extension of an existing browser (e.g. chrome). Theoretically, it sounds great: imagine getting paid to turn off your adblock. But diving down, there are still fundamental hurdles towards its viability such as dealing with fraud (bot requests etc.), and the traction of advertisers on board.
Steem: Quite complex coin structure, with a dual currency (steem+steem power) to incentivize keeping your STEEM coins in the system. That or you face high yearly inflation (which is quite crazy). Many have compared steem to a ponzi scheme since there’s no monetization model while content creators and editors gets paid a considerably large amount. But it could also be pointed out that social media sites like FB & twitter sort of started out that way with a high burn rate and no monetization. The great potential of steemit is that multiple social media platforms can be nnuilt on it, which if fulfilled could be big.
QRL: I have to admit, it’s a super cool name. Great idea to solve the threat of quantum computing. It seems that the coins utility is more of a value reservoir in the event quantum computing poses a threat to the industry. That’s quite a big contingency, as it assumes that other coins will not have the capabilities or discretion in changing their protocol/consensus mechanisms to defend from quantum computing. Hypothetically, it should be a good hedge for other cryptos.
4) Question: Can anyone shed light on Bitstamp? Just signed up and going through the verification process. How long does it usually take? Would you recommend using this to buy BTC and transferring or are there better methods ? Looking into ETH and XRP.
Bitstamp is good in that they have large trading volumes, which makes them very liquid. Liquidity is always a good indicator for an exchange as you’d get better prices.
The verification process varies for each application, but on average Bitstamp takes a week or two, sometimes longer. What I’d recommend is sending a support ticket/message and asking them directly to expedite your application.
XRP can be bought there but unfortunately, Ethereum isn’t available. What you can do is open another exchange account that offers ETH (Poloniex/Bittrex/Kraken) and purchase ETH using BTC, sent from your Bitstamp wallet.
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You can also join our Facebook group at Master The Crypto: Advanced Cryptocurrency Knowledge to ask any questions regarding cryptos!