I’ve been pretty vocal on Twitter about cryptocurrency. I own some of the stuff, I have fun with it and I get just enough questions from some of you that I figured I’d share all I know about Bitcoin with you today.
Don’t have a seat. This won’t take long.
First things first: I’m not a crypto expert. I have a limited understanding of blockchain and mining and the history of bitcoin and cryptocurrency, but I can’t explain the granular details to you and I’m not going to try. This post is nothing more than my experience buying and selling crypo. Take it for what it’s worth.
What I believe is this:
- Blockchain technology is here to stay, and will have a prominent place in the near future.
- I have no idea if Bitcoin, or any crypto currently in existence, will be a part of that future.
- Money can be made, or lost, very quickly when trading cryptocurrency.
Tales From The Crypto
My first crypto transaction was made on Oct. 6, 2017 when I bought $10.00 worth of Bitcoin, which was selling at that time for $4,390 (today it’s at $8,782). I was curious and wanted to see how the process worked.
It couldn’t have been easier and eventually I bought more. Then I started buying ‘alt coins,’ which are basically any crypto that’s not Bitcoin. Since my first purchase back in October I’ve bought more Bitcoin, Litecoin, Ethereum, Bitcoin Cash, Ripple, and Tron.
How To Buy Bitcoin & Other Cryptocurrency
The process can be complicated if you want to get into buying alt coins, so to keep things simple I’m going to focus on how to buy Bitcoin from Coinbase.
Digital Wallet
First, you need a digital wallet. Each crypto token you own needs its own wallet. If you buy Bitcoin, you’ll need a Bitcoin wallet. If you buy Ethereum, you’ll need an Ethereum wallet. You get the idea.
The easiest way to create a digital wallet is to create an account on an exchange; Coinbase is the most-well known exchange right now. It’s also by far the easiest to use and their mobile app is super intuitive.
Fund Your Account
Once you’ve set up your Coinbase account you’ll need to connect your checking account or a credit card to it. You’ll use legal tender to buy your digital currency.
As I mentioned earlier, you can buy fractions of crypto – you don’t need to buy whole bitcoin. My first purchase was for $10.00.
Wait
Once you click the buy button, you’re locking in your price, but it takes a few days for the crypto to hit your digital wallet. All you can do is wait.
Once the crypto is in your wallet you can do whatever you want with it. You can sell it to someone else. You can leave it alone and hope the price increases. You can trade it for other crypto. You can sell it back to Coinbase for cash. You can even shop with it; Overstock.com has been accepting Bitcoin payment for years.
HODL
HODL is a word you’ll see in the crypto world. It comes from a typo on an old Reditt thread. Someone was trying to say that they don’t day trade crypto, that they ‘hold’ it for the long haul, but this person accidentally typed HODL and it stuck.
If you’re going to HODL your crypto like me then I strongly recommend (as does almost everyone else) that you store your crypto in a cold digital wallet.
A hot wallet is what you get on Coinbase or other exchanges and it’s nothing more than a cloud-based digital wallet. Cloud based anything can be hacked.
A cold wallet is when your crypto is stored offline, in a drive. I use the Leger Nano S wallet because it was relatively inexpensive to purchase, was highly rated, is very secure, and was easy to set up.
My Crypto Portfolio
So exactly how much crypto am I hodling? That’s what you really want to know, right? 🙂
Today I own exactly five cyrptocurrencies: Bitcoin (BTC), Ethereum (ETH), Ripple (XRP), Tron (TRX), and Litecoin (LTC). At the time of writing (afternoon of 2/12/18) here’s what I’ve got, and what it’s worth:
| CRYPTOCURRENCY | QUANTITY | USD VALUE |
| Bitcoin | 0.27937863 | $2,735.67 |
| Ethereum | 2.002 | $1,714.06 |
| Ripple | 1,311.692 | 1,351.04 |
| Tron | 14,528.457 | 672.09 |
| Litecoin | 2.0 | 320.18 |
I’m no math whiz, but my calculator tells me this crypto portfolio is worth $6,793.04. Not too shabby … except that it cost me exactly $10,271.55 to acquire it.
I’m currently down -$3,478.51, or -33.87% ROI.
Damn!
The scary part is that I’ve been WAAAY up in crypto and I’ve also been down quite a bit more than where I’m at today. The swings are violent and frequent. I joke that owning crypto is conditioning me to better handle any future stock market corrections.
In case you need it … pic.twitter.com/ZQbV3z2aqY
— I Dream of Fire (@I_Dream_of_Fire) January 19, 2018
Risky Business
I’m sure you know that crypto is risky and volatile. If you’re looking for a simple and safe investment, then you should index and chill. With cryptocurrency, I’ve seen my investment triple and I’ve seen it get cut in half … in about a one month period. It’s not for the faint of heart so if you decide to get yourself some of this fancy schmancy digital currency, don’t spend more on it than you’re prepared to lose. If I lose my ten grand I’ll be sick, but it won’t sink our ship.
Personally I still feel like I’m going to see some nice returns in 2018, but like I said at the beginning of this post, I don’t know squat about crypto. #fingerscrossed
Chime in!
Do you own any crypto? Do you think crypto is an investment (speculative or not?) or is it a complete scam?
12 replies on “Tales from the Crypto”
I bought Bitcoin only to exchange it for Ripple (XRP) and Stellar Lumens (XLM) because I believe both of these solve a current problem and therefore is an asset in my mind.
I am going to reassess them in a year from now and see where things stand. It was just enough money to not lose any sleep over, so we’ll see what happens a year from now.
If anything else, it is fun to watch the development.
Waiting a year will have tax benefits for you as well, due to short/long-term capital gains taxes.
It takes nerves of steel to ride that crypto coaster. Well, maybe not with a small percentage of your net worth, but $10,000 is nothing to sneeze at, either.
Sometimes I think, “What if I had bought some Bitcoin when I first heard about it years ago?” The answer is if I bought it at $1, I probably would have sold at $10 to lock in the 10-bagger. So I don’t lose any sleep over what could be seen as a missed opportunity.
Wishing you success and a turnaround in valuations. I’ll be watching from the sidelines.
Cheers!
-PoF
It’s great to dream about what might have been re: striking it rich with Bitcoin, but I’m with you – I would have sold out LONG before the price ever reached a life changing number. Looking forward to joining you on the sidelines someday. 😀
Thanks for sharing your experience! My hubs has dabbled a bit, from what I gather it was a very complex buy process. But maybe he just didn’t like the waiting part
😛 what you bought could triple or halve in value before it actually got to you haha Best of luck long term! Hope we both bet on the right ponies. BTW great image! IDreamofFire did a fantastic job.
I hope your husband’s dabbling has paid off handsomely for you two! Buying alt coins gets complicated because it requires you to create wallets on multiple exchanges and, usually, an alt can only be purchased with Bitcoin or Ethereum, so that coin must be purchased first. And yes, I Dream of FIRE did an awesome job (he created it jokingly, but I liked it so much that I used it :))
I’ve got those nerves of steel PoF mentioned when it comes to our lithium stock (over $20K invested) but I run from digital currency. I just don’t understand how it’s valued as an investment. It’s like investing money on money. But, I am happy to learn about the cold digital wallet. That’s a smart move. Good luck!
Thanks, Mrs. G. While blockchain has several uses, one of the best use cases for cyrpto investors is as a store of wealth, just like gold or silver. The big problem, obviously, is the volatility and the newness of the stuff.
Looks like you found yourself a white knuckle way to liven up that boring “set and forget” journey towards financial freedom!
I think blockchain will end up playing a useful in things like title registers (shares, property, etc) that need to be both correct and verifiable. I think it will also fade into the background until it becomes (mostly) invisible any file system is today.
The crypto part I’m not so sold on, as I’m unconvinced the world needs yet another medium of exchange. Will be interesting to see how it all plays out.
Good luck Ty, and enjoy the ride!
lol – indeed I have! I’ll keep my fingers crossed and will keep a sharp eye out for my exit point.
Great Article! I’ve definitely been a big fan of ripple and Dent for 2018! Here’s to the future of Crypto and remember to HODL!
To the moon! 😀