Everyone is talking about crypto these days. The FOMO is real. And you might even have this feeling that the opportunity cost is really high if you don’t invest in it. Whatever your thoughts are, I am here to help you to get started in your crypto journey.
Important: This article is not about financial advice
Understanding The Risks Of Crypto
First of all, if you are someone who invests in stocks, bonds, gold, etc. it is gonna be completely different when it comes to cryptocurrencies.
If you look at stocks, the price of a stock depends on a company’s ability to sustain and create profit in the long term. People want their money to work for them. And so they buy stocks that they trust and hold them for the long term.
But when it comes to crypto, we have seen people becoming millionaires in a day. We have seen a very high ROI like 20000%s. And maybe that is what drives more people into the space.
But what we should understand is there is another side of this coin that most don’t understand and that side is filled with so many scams, instant pump & dumps, rug pulls (NFTs), etc.
Cryptocurrencies are highly volatile, unlike stocks. Moreover, they aren’t backed by any hard assets.
Simply put, the rewards are too high and so are the risks of losing everything in a single day.
I am not trying to be a pessimist or disappoint you. But “truth is truth” and it needs to be told. The good news is as we go along we are seeing some more currencies like Bitcoin, Ethereum, Solana, etc are more likely here to stay. So, at least we can bet on a few currencies that are less risky (or look like less risk involved).
Ok, but what’s the first move when getting involved in crypto?
Learn About Cryptocurrencies
What is a blockchain? If you don’t have at least a basic idea of what it actually is, you haven’t even started your crypto journey. The first thing is to build a strong foundation.
Research on all the topics like blockchain, Ethereum, bitcoin, how & why it was invented, the blockchain trilemma, etc. If you don’t have a basic idea of these things, you shouldn’t invest at all. The point here is to read about these technologies so much that at one point you know whether to trust them or not.
For example, I’ve invested in a few cryptocurrencies, but Bitcoin was not part of it. I never understood gold. And so I never understood Bitcoin, completely. At the same time, I do believe that Bitcoin is gonna go up (currently it’s at 47,14,789 INR). But I am not interested in it, at least for now.
So, how do I learn and at the same time keep up with all the happenings in the crypto space which is moving faster than light?
Well, first of all, start with Twitter. Follow as many people as you can in the crypto space, basically start with the founders and developers of these technologies. And then start following topics like “Cryptocurrencies”, “Bitcoin”, “Ethereum”, whatever you are looking to research on.
That’s for Twitter.
There are a lot of well-written articles about these blockchain technologies. Search for “What is” for each technology that you are interested in.
And then there are many youtube videos too. One such channel is Whiteboard Crypto where they explain all the basic concepts of crypto.
Yes, you probably won’t understand everything. That’s what happened to me. But at least you’ll get something. I invested in Polka Dot just because of one word “Interoperability”. And know nothing about all the other things that are involved with that.
So, it’s ok if you don’t understand the whole ecosystem. You are just investing money in it, not developing the tech. Learn as much as you can.
After Mark Zuckerberg announced “Meta”, the price of some metaverse tokens hit the moon. And if Elon Musk tweets again about DogeCoin, it’s gonna go up. There are a lot of pumps and dumps that are happening every day and will quite often.
But it’s always better to aim for the long term. What’s gonna be the price of ETH after 5 years? Is Polka Dot a good investment? Well, again search for the answers (Google and Youtube) like these to get a rough idea.
You can never understand the tech, full. You can never predict the price. But you can trust on somethings. I didn’t invest in Bitcoin because I didn’t see any use cases and there are many arguments that it’s not gonna be used for payments. I bought Eth because of the use cases (Smart contracts, NFTs, and, Defi). And I invested in Polka Dot because the founder is also someone who co-founded Ethereum along with Vitalik Buterin.
So, sometimes you trust the underlying tech, sometimes it’s based on adaption as a whole aka use cases, or sometimes I bet based on the team behind the tech.
Learn. Analyze. Trust. Think Longterm. But, invest only the amount that you can afford to lose. I am saying this again: “The ROI is high. But so is the risk of losing everything because someone tweeted about it badly.”
How To Buy Cryptocurrencies In India – Bitcoin, Ethereum, etc.
I use CoinDCX to buy cryptocurrencies (WazirX and CoinSwitch Kuber are also popular crypto exchanges in India). But CoinDCX lists only some popular currencies and tokens which is why we are gonna using Uniswap later if you are interested to buy cryptocurrencies that are not listed like $OVR, $DERC, etc.
First of all, let’s get started with CoinDCX. Make sure you use this invite link to download the app, so that we both get 100 INR worth Ethereum. After that, once the login process is done, add your bank account and get your KYC done. We need to add a bank account so that you can transfer money from the bank to the CoinDCX wallet, and only then you can start investing in cryptocurrencies.
Click on the price section (bottom) and from the all coins list, select whatever coin you want to invest in, and click on the watchlist so that you can have a separate list for all the currencies that you are interested in.
Once you have the watch list, make sure that if the prices of the currency that you want to buy are low (last 24hrs), check on the full data of the currency and if you think it’s low, buy it.
Oh! You haven’t even added your money yet. Go to your account section and add the amount from your bank account via available payment options (Bank transfer, UPI, Mobikwik).
That’s it! Once the money was deposited in the wallet, you can buy as many currencies as you want.
Ok, wait!! What if the token I want to buy isn’t listed in this app?
For example, I’ve 0.1 ETH in my Metamask wallet and I have connected that with the Uniswap website. And then I bought some DERC (It’s a horse racing play to earn game tokens) by swapping ETH.
Once the swapping is done, you can check these tokens that you bought will get added to your Metamask wallet.
I hope I have given some clear insights on how to invest in crypto using the tools and mindset. Let me know if you have any questions (comment below) and I’d love to answer or at least will find the answer for you if I don’t know.