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Cryptocurrency for Beginners
Guide to the Most Common
Cryptocurrencies and Altcoins
Table of Contents
Introduction
Chapter 1: Brief History of Cryptocurrency
Chapter 2: Investment in Cryptocurrency
Chapter 3: Different Forms of Cryptocurrency
Chapter 4: What Should You Know About Investing in Cryptocurrency?
Chapter 5: Risks & Rewards in Cryptocurrency Investment
Chapter 6: How to Safeguard your Cryptocurrency?
Chapter 7: Popular Crypto Coins and Exchanges
Conclusion
Introduction
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I want to thank you for purchasing this book "Cryptocurrency for Beginners-
Guide to the Most Common Cryptocurrencies and Altcoins."
The primary objective of the book is to give you a brief understanding about
cryptocurrencies and also help you understand the different strategies and
aspects you will need to take into account before you invest in a
cryptocurrency. This book will also shed some light on the functionalities of
cryptocurrencies and the benefits of investing in virtual coins. These virtual
or digital coins only gained popularity in the year 2017. New
cryptocurrencies were launched into the market, and it was because of this
that the number of people investing in cryptocurrencies increased by a large
number.
Many investors now want to explore the cryptocurrency market because they
know they can make money. That being said, it is important to remember that
cryptocurrencies are still in the nascent stage. The Bitcoin is one of the most
popular cryptocurrencies, and it is said that this coin can substitute gold in the
near future.
As an investor in cryptocurrencies, it is important for you to understand that
there is no difference between investing in the stock market or in
cryptocurrencies. It is important that you take all the necessary steps to
understand what the coin is, how it works, the technology used and the
market value of the coin. If you want to be thorough, you should also learn
more about the investment benefits and the risks associated with a
cryptocurrency. You will need to deal with price fluctuations and market
volatility if you choose to invest in cryptocurrencies.
I hope this book serves as an interesting and informative read.
Happy reading!
Chapter 1: Brief History of Cryptocurrency
Cryptocurrency is not a recent phenomenon, and people started toying with
the idea of digital cash as early as the 1980s. DigiCash was the first-ever
digital payment company that existed long before the blockchain revolution.
It was founded by an American cryptographer named David Chaum in the
early 1980s. DigiCash issued a digital currency called Cyberbucks, which
was not controlled by a centralized bank.
How did DigiCash work?
DigiCash users had to convert their bank money into Cyberbucks, which
would be stored in the user's PC. Users could use Cyberbucks for making any
purchase. The user could also convert Cyberbucks into USD and save it in
their bank accounts. DigiCash was designed to allow users to make small
purchases on online retail stores. The idea, however, did not catch-up, and
DigiCash filed for bankruptcy in 1998.
The Rise of Cryptocurrency
A lot has happened since then- DigiCash model served as a foundation for a
lot of cryptocurrency makers in the world. During 2008, one of the most
reputed investment banks in the US, Lehman Brothers Holdings Inc. filed for
bankruptcy and shook people's trust in the economy and centralized banks,
which led to the formation of one of the most popular decentralized
cryptocurrency in the world- Bitcoin. Nakamoto got away with the third party
by publicly distributing the ledger called "Blockchain," which runs on a
complex algorithm. A network of users who are willing to devote their CPU
power, running the software would be called the miners and would maintain
the block chain collectively.
A decade later, Bitcoin has become one of the most debated financial assets
in the world. From an initial value of below $1 in 2010, Bitcoin is currently
valued at $6200.
Blockchain
At its most basic level, blockchain helps to take digital information, which is
the "block" and storing it in a public database is the "chain."
The distributed database that is present on a network across different
computers which constantly records new blocks or sets to it is known as a
blockchain. Each set of the block comes with a timestamp along with a link
to the previous block, making it a chronological chain.
Everybody in the blockchain network gets a copy of the whole database,
making it almost impossible to manipulate the information. These blocks are
encrypted in a way that everyone can access all the information but cannot
edit it. Blockchain technology offers an incredible advantage of not linking
any bank or card information, which has led to the success of many
cryptocurrencies in the market today.
What makes cryptocurrencies different from fiat currencies?
One of the most significant differences between cryptocurrency and fiat
currency is that the country's central government backs flat currencies and its
value is derived by the fact that the country's central government has stated
that it has value. Most countries operate in fiat currencies. Cryptocurrency,
on the contrary, is not controlled by any central government or financial
institution. They generally have a fixed supply; therefore, its devaluation due
to inflation is. Just as fiat currency, cryptocurrency can be used to buy
products and services.
Here are a few ways in which cryptocurrencies work differently from fiat
currencies:
Legality
The government issues fiat currencies and regulated by a central bank. Fiat
currencies are considered to be a legal tender and an official means of
conducting financial transactions. The government controls the supply of fiat
currencies, which affects its value from time to time.
Cryptocurrencies, on the contrary, are digital assets that are not controlled by
the government. The government does not control its supply or influence the
value of cryptocurrencies. Cryptocurrencies can be used for the transaction of
goods and services too.
Tangibility
Cryptocurrencies are intangible because they are digital money. Fiat
currencies are tangible, as they exist in the form of notes and coins. It can be
a problem to carry huge amounts of fiat currencies.
Exchange
Since cryptocurrencies exist in digital format and operate on codes and
algorithms, their method of exchange is only digital. On the contrary, fiat
money can be exchanged both- digitally as well as physically.
Supply
Fiat currencies have an unlimited supply, which is supervised by the
country's central authorities. Cryptocurrencies have a limited supply- there
will always be a certain set of coins that will ever be in supply. For example-
the total number of Bitcoins that will ever be in supply has been capped a 21
million.
Storage
Fiat money can be stored in a physical wallet or a digital wallet.
Cryptocurrencies can only be stored in digital wallets, commonly known as
cryptocurrency wallets. However, these wallets are considered to be very
safe.
The anonymity of transactions
While dealing with fiat currencies, the sender and receiver can easily be
identified by the legal authorities. However, in cryptocurrency, transactions
are anonymous and cannot be tracked. One can only track the flow of
transactions but not the sender or receiver's identity. This doesn't make it
unsafe, because the new law makes it mandatory for cryptocurrency
exchanges to verify every user's documents during the registration process
and this is done to avoid any fraudulent activity on the Internet.
Nature of irreversibility
Cryptocurrency transactions are irreversible. Once the miner has confirmed
the transaction and adds it to the blockchain, there is no way back out; it
becomes a part of the blockchain. This is done to ensure transparency. There
are ways in which you may reverse your fiat currency transactions.
Cryptocurrencies and fiat money come with their own set of features. While
there are many advantages of cryptocurrencies over fiat currencies, they still
have a long way to go. The coin market is evolving rapidly, and maybe we
will see a revolution in this space over the coming years.
Chapter 2: Investment in Cryptocurrency
The cryptocurrency market is getting a lot of popularity, the value of
cryptocurrencies like Bitcoin skyrocketed in the year 2017. A large number
of new users are joining the cryptocurrency market. The cryptocurrency
market has reported an increase of 100,000 in the number of users who are
investing in different cryptocurrencies. This has been happening since the
year 2018. One of the critical factors that define cryptocurrency prices is the
supply and demand factor. If the cryptocurrency has a high supply with less
demand from traders, its value will drop and vice-versa. The scarcity element
has been the biggest reasons for driving up the prices in the past.
Apart from this, the media can also influence the price of cryptocurrencies. If
a particular token gets a bad review, it can drastically affect its valuation in
the market, while good coverage can certainly increase the hype and price of
another token.
Change in the cryptocurrency pricing in the past two years
Since Bitcoin is the largest cryptocurrency, taking a look at it's pricing in the
past two years will give a good idea about the cryptocurrency market in
general:
Bitcoin started at around $1000 in the year and took a dip when China
announced to do investigations on the cryptocurrency exchanges in the
country. Since the majority of Bitcoin trading was happening in China, the
currency value dropped to $775 while the rest of the cryptocurrency market
was at $15 billion. Eventually, Bitcoin made some recovery by March 2017,
and when the Security Exchange Commission denied the go-ahead for
Bitcoin exchange, the overall market cap dropped $5 billion in just two days.
By April 2017, Japan declared Bitcoin as a legal currency and the price
jumped back to $1000, and the total cryptocurrency market cap went up to
around $26 billion. From there on, Bitcoin pricing kept steadily increasing to
close to $3000 until July 2017, while the overall market cap surpassed $100
billion. However, the price took a dip in mid-July 2017 due to the
Bitcoin/Bitcoin Cash split. Bitcoin recovered from this very quickly and
again soared at around $5000, while the overall cryptocurrency market cap
reaches up to $170 billion. By September 2017m China banned the Initial
Coin Offering and Bitcoin price dropped to around $3300, it recovered
quickly and the price skyrocket by the end of 2017. In mid- December 2018,
the price reached up to $20,000, while the market cap closed at $235 billion.
By January 2018, the Bitcoin price dropped back to $10,000 and reached at
$6000 in February 2018. Since then, Bitcoin has shown a downward trend,
with just minor recoveries.
Accuracy of cryptocurrency price prediction
Just like traditional stock markets, cryptocurrency markets don't guarantee on
price. Numerous factors influence the price of a Bitcoin, including:
● How many users adapt to cryptocurrency
● The type of protocols levied in governing cryptocurrency markets
● The use and capability of the tokens and their technology in solving
real issues.
How to invest in cryptocurrency
Investment is a continuous and iterative process, which requires a lot of
patience and knowledge for best results. Cryptocurrencies are a segment of
high risks and high returns, and one must do thorough research before
investing in the cryptocurrency market.
● Decide the total time you want to stay invested in the cryptocurrency
market
● Decide the amount you want to invest- invest only what you can
afford
● Prepare a list of cryptocurrencies you want to invest in. Ideally, 3-5
cryptocurrencies should be fine. The focus should be on a small
proportion. Once you are confident, you can increase/expand your
portfolio.
● Invest when there is a price dip. You can easily do some research and
analyze the price fluctuation of a particular coin and invest
accordingly. Investing in dips will ensure that you have purchased at a
low cost.
● Just like other markets, it always advised that you perform research
instead of relying on hearsay.
● Set your target price and even the exit price- do not exceed your
appetite for loss
Trading Strategy
There are two major trading styles that investors follow. One is when you
have looked at the data and come up with price prediction of the currency.
That typically means that you will buy at a lower price and sell at a higher
price, which is called the buy and hold strategy. The other strategy is when
you intend to buy during a price dip.
Buy and Hold
The buy and hold strategy is the most common and long-term investment
strategy. It assumes that the price will shoot up in the future, and you will be
able to liquidate your assets. You can always decide if you want to make a
lump sum purchase or make slow and steady investments over time. One of
the benefits of this form of investment is that the investor is focused on long-
term profits. Momentary volatility in the price doesn't affect the investor in
this case. The focus is to maximize profits in the long run. The flipside of
such a strategy is that one might miss the right exit opportunity and probably
face a higher risk by holding the coin for much longer than planned.
Buy the Dip
This strategy also assumes that the prices will rise in the future. Such
investors have full faith in the market and their research. Buying at a dip
lowers your cost of purchase and increases the chances of clocking in profits.
One of the biggest risks in such form of investment is when the price dip is
an indication of something severe. If the market is crashing, you could
probably end up making huge losses instead of profits. It is always a good
idea to have a stop-loss price before investing
Chapter 3: Different Forms of Cryptocurrency
The cryptocurrency market is growing exponentially and all you know, the
next big digital token might be released tomorrow. While Bitcoin is the most
commonly know cryptocurrency, there are many other popular currencies on
the horizon and are doing great in the market. Let's take a look at the other
forms of cryptocurrencies:
Litecoin (LTC)
LiteCoin was launched in 2011 and was among the initial cryptocurrencies in
the market after Bitcoin. It was founded by Charlie Lee, an MIT graduate and
former Google engineer. One of the main differences between the Litecoin
and Bitcoin is the total number of coins that each of these cryptocurrencies
can produce. While Bitcoin can never exceed 21 million coins, Litecoin can
produce up to 84 million coins. Litecoin can handle higher transaction
volumes than Bitcoin.
How is A Litecoin different from a Bitcoin?
Let us look at how a Litecoin is different from a Bitcoin.
Speed
Litecoin uses the same open-source code as Bitcoin with a few differences.
One of the major differences in the speed of the transaction. Litecoins can
generate coins almost four times faster than Bitcoin; it can perform
transactions far more quickly and has, therefore, gained more popularity in
recent years.
Number of Coins
Litecoin has a limit of 84 million coins, while Bitcoins max out at 21 million
coins.
Market Cap
Even though the market value isn’t as high as Bitcoin, Litecoin is still one of
the best five cryptocurrencies in the market. These rankings vary depending
on the number of coins in circulation and price.
How to Buy Litecoin
If you want to own some Litecoin without mining, you can do so by
purchasing it on any of the well-known exchanges such as Coinbase. You can
buy Litecoin using fiat currency.
Ethereum (ETH)
Launched in 2015, Ethereum has become another popular cryptocurrency
alternative to Bitcoin. Ethereum is a decentralized software platform that
enables developers and programmers to run the code of any application.
Bitcoin uses a technology called blockchain, and Ethereum uses blockchain
technology to allow the creation of applications that can be used in the cloud,
can be protected from manipulation and much more. Ethereum uses a token
called Ether, which is used for navigating on the Ethereum platform and is
used by most developers to run and develop applications inside Ethereum.
How is Ethereum different from a Bitcoin?
Bitcoin was launched to be a currency, but Ethereum was designed to
develop software using a token called Ether. Ethereum is considered to be the
diamond of cryptocurrencies because of its wide usage in the developer
community. A lot of apps are developed on Ethereum, and a lot of big
financial companies are getting involved in this space. As a result, it has
become more valuable in the market.
Ethereum is also way cheaper than Bitcoin at the moment, and it is currently
trading at around $318 per unit.
How to invest in Ethereum?
It works just like any other cryptocurrency, and you can use Coinbase as a
digital wallet to purchase Ethereum. You can use your fiat currency to
purchase Ethereum. Investing in Ethereum is risky and lucrative at the same
time. Unlike Bitcoins and Litecoins, companies are widely using Ethereum.
However, just as any other form of investment, you must carefully evaluate
your risks and invest after doing thorough research.
Zcash (ZEC)
Zcash was developed and launched by top cryptographers in 2016 by
research scientists from MIT, John Hopkins, Tel Aviv and UC Berkeley.
Zcash is an open-source cryptocurrency, but unlike other cryptocurrencies, it
ensures that your transaction data remains completely confidential.
Information about the sender or the receiver is not leaked. You will also not
find any information about the transaction anywhere on the web. The content
is encrypted using an advanced cryptographic technique.
How is Zcash different from Bitcoin?
Zcash and Bitcoin have a lot in common, but the biggest difference is the
private transactions. Bitcoin doesn't offer any privacy since everything is
stored in the public blockchain, but Zcash allows its users with data
protection.
Currently, Zcash is valued at $49.84 per token with a market cap of $291.25
million.
Ripple (XRP)
Ripple is an open-source protocol that aims to allow fast and cheap
transactions. It is a real-time global settlement network that enables banks to
make cross-border payments with low costs. It acts as a platform and a
currency- the platform has its currency called XRP, but anyone can use the
platform using RippleNet. Ripple doesn't work on the mining model, which
reduces the overall usage of computing power.
How is Ripple different from Bitcoin?
Ripple aims at distributing XRPs through business deals, by selling them to
institutional buyers - it is built on a unique model and so far is making a huge
success. It has become one of the most reputed platforms for digitizing cross-
border payments. Currently, Ripple is valued at $0.308 and has a market cap
of $12.69.
Ripply is an official organization, and some of the world's leading banks use
the platform's services. More the number of banks using Ripple as a
transaction platform, higher the value of XRP. If all the banks in the world
decide to start using XRP as a currency, it will significantly increase its
market share cap in the cryptocurrency world.
Shinecoin
Shinecoin was founded in 2017, which provides an Ethereum based
cryptocurrency. Shinecoin uses a model that is designed to increase the value
of your currency. Most cryptocurrencies in the market operate on free
markets and tend to have high volatility in their pricing. One of the most
common threats is that there is no way to mitigate the risk of price volatility
in the currency. Shinecoin works on a model or price plans and actively
works towards making the currency grow stronger.
As an investor in Shinecoin, you will be a part of the money creation process.
Once you buy Shinecoin, you are contributing to its value. Once your
community grows, and more coins are created, every member will benefit
from the currency becoming stronger. As of now, the results have been over
and above expectations. The value of the currencies has increased as per the
price plan, and all the members have been able to liquidate whenever they
wanted to. It offers its investors with an opportunity to improve their
financial situation. To learn more about the Shinecoin, visit
https://shinecoin.com/ .
Shinecoin mechanism
Shinecoin works on the factor of trust and greater financial incentives.
Shinecoin tokens are built and stored in an Ethereum platform and wallet
respectively and all the dealings are executed on the blockchain network for
Ethereum. As this community grows and the supply increases, the value also
increases as per the predicted price plan.
The purpose of the price plan is to have some stability by avoiding swings in
the price. Shinecoin is working actively to grow the strong community- the
community has grown at a great pace leading to an increase in the value of
the currency as per the price plan.
Chapter 4: What Should You Know About
Investing in Cryptocurrency?
These are some of the most known/upcoming cryptocurrencies in the world.
With more than 30 additional options, it is getting tough to choose the best
type of currency for investment. The cryptocurrency market is growing by
leaps and bounds, and a new user will always on what is the right coin for
investment? How much should one invest and what are the necessary
measures to be taken before placement?
Here are a few things you can keep in mind while you are investing in
cryptocurrencies:
Only invest the money you can afford to lose
One of the most important things to remember before investing in
cryptocurrency is that you only need to invest money that you can afford to
lose. If you lose that money, it should not affect your day-to-day life. Do not
take loans to invest in cryptocurrency. Investment in cryptocurrency needs
time and patience. The cryptocurrency market is very volatile, and you can
either gain/lose money depending upon the market situation. If the markets
are down, your return on investment might be longer than expected. It is
always better to invest the money you can afford to lose.
Do your research
Do your research instead of blindly trusting people. Do not invest in
something you don't know anything about. You don't need to be an expert in
it, but you must give yourself some time and research.
Diversify your investments
This is a thumb rule of investment - do not lay all your eggs in one basket.
Diversifying is key. It reduces your risk. If the cryptocurrency market is
crashing down, you must be rest assured that at least other investments are
yielding you some returns. The goal is to minimize your risk as much as
possible.
Exchange platforms
Use a cryptocurrency that allows you to buy popular cryptocurrencies like
BTC or ETH.
Be aware of scams
The cryptocurrency market is a bit more complicated than normal markets,
and you have to watch out for scams. Invest only in coins you have read
about.
Analyze the market cap
While you are investing in a cryptocurrency, make sure you do thorough
research on its valuation, and it's the total market cap. Do not rely on its unit
value, and you must know the progress rate of the currency as well. This can
be done in 2 ways:

1. Calculate the total capitalization (market cap). This can be done by

multiplying the unit value of a token by the total number of tokens
in circulation.
2. The increase in capitalization since its ICO. A cryptocurrency that
has fallen well since its ICO may prove to be a bad investment.

Track your investments

You must always track your portfolio from time to time. It can be a difficult
task to track each of your investments, but it's absolutely important.
Chapter 5: Risks & Rewards in Cryptocurrency
Investment
With the growth of investors in the cryptocurrency market, it has become
important to understand the risks and rewards involved in investing in the
Cryptocurrency market.
Risks of Cryptocurrencies
Here are some of the potential risks you may face while investing in
cryptocurrency:
Decentralized Status
One of the biggest pro can also turn into a potential risk factor for investors.
Cryptocurrency has no backing by a centralized authority. Although it makes
it a free-flowing economy, it can also pose a lot of risks, resulting in legal
complications.
The value of digital currencies is dependent upon the value of its owners and
investors. Investors could be left in a lurch if a complication with such a
transaction arises, as there is no backing of any central authority to the
currency value of cryptocurrencies. Another risk involved with
cryptocurrencies is to do with the particulars of transactions. In the case of
electronic money, a trusted institution is involved in settling claims. Since
none of this is applicable in cryptocurrency transactions, a legal confusion
between two parties is highly likely.
Business Registrations
Many upcoming businesses are using digital currencies as payments. A lot of
businesses need to obtain license to carry out certain business activities, but
due to the complex legal framework of these currencies, this area is very
gray.
Fraud and Money Laundering
Digital currencies can open a whole new avenue for criminal organizations to
commit fraud and money laundering. If a cryptocurrency trade gets hacked
and the holdings are stolen, there is no way of recovering the funds. Although
developers and startups related to digital currency are focusing on creating
secure means of holding digital coins and tokens, it hasn't completely
eliminated the legal risks
 High volatility
Cryptocurrency markets are highly volatile compared to other markets.
Immense prices fluctuations are daily phenomena that make a cryptocurrency
a risky form of investment.
Inadequate users
If the cryptocurrency does not have an adequate number of users, the
currency value will drop quickly.
Lack of support from the global markets
Many countries do not support cryptocurrency. It has been taken down by
Russia and is banned in China as well. Some of the most popular financial
institutions have shown its opposition against cryptocurrency.
Rewards in Cryptocurrency Investment
Cryptocurrency Investment can yield high returns if you invest in the right
currency at the right time. Bitcoin investors made a fortune during 2017 - it
was a time when no one could go wrong with investing in Bitcoins.
High Returns
Cryptocurrency investments offer very high returns since they are digital. The
value of these currencies fluctuates very often, and investors can make a good
amount of money in a very short period. Even if you plan to buy and hold, it
will yield good returns in the long run.
Easy of transfer
Since cryptocurrency is entirely digital, the transfer of currency between two
parties is relatively easy and quick. It is also very secure because of
blockchain technology. The transaction fees charged for the same is also very
minimal.
Transparency
The blockchain technology uses a public ledger, which is available to all its
users. Every piece of information becomes a part of the chain and cannot be
tampered with. This makes the network highly secure and trustworthy. Every
transaction is verified and stamped before adding it to the blockchain, and all
the investors are aware of what is happening in the network, making it one of
the most transparent markets for investments.
Huge returns
The investments in cryptocurrencies are high, and if you had investments a
certain amount during the initial phase of the coin offering, chances are you
have already booked a huge profit in a very short span of time. That's the
magic of investing in the cryptocurrency market. Of course, these
investments can be very risky too, but if you track these investments well and
conduct enough research, you can mitigate your chances of loss and make
huge profits.
Chapter 6: How to Safeguard your
Cryptocurrency?
In recent news, a crypto exchange QuadrigaCX found Gerald Cotten passed
away, and the clients were unable to access $190 million worth of Bitcoins
and other funds. Such kind of news can be alarming for all investors.
Gerald’s wife says that the passwords to the storage are unknown to her,
which leaves investors with nothing. Not just that, the continuous risk of
hacking of digital currency exchanges is another major threat to investors.
Bitcoin and other top currencies have always been a target for hackers. Since
these currencies are unregulated by any government authority and very little
legal course of action can be taken, hackers are figuring their way out to hack
these accounts without leaving any digital trace behind. Here are some tips
that investors can keep in handy before investing in cryptocurrency.
Choose a secure wallet
Investors have tons of wallet options from many companies that offer some
shiny and attractive features. However, one must be careful of any virus or
malware that might go undetected. Many cybersecurity experts have spoken
about the risks involved in choosing the wrong wallet. You must always
ensure that you choose a regulated exchange with safety mechanisms in
place. QuadrigaCX faced liquidity issues for months, and little bit of research
would know this. There are no proper legal frameworks for these exchange
companies; most of them are startups and do not go through regular audits
from a well-known financial regulator. From governance, risk management
and compliance standpoint, these loopholes can be very risky for investors.
One must do thorough research before they invest in a wallet.
Do your research
Cryptocurrency wallets use a secret to authenticate the user according to
research experts. This secret is usually encrypted with a password. If the
password is lost or forgotten, then, the crypto coins in the wallet are lost.
There are tons of wallets available in the market- hardware, software and
even paper wallets, and each one comes with its pros and cons- one must do
their research before choosing this. According to researchers, a normal
hardware wallet, that stores a user’s private keys are considered to be the
most secure form of wallet. However, if this type of wallet is lost, there is no
way of recovery.
Stock your digital coins in cold wallets
You can store your coins in hardware devices such as a USB or hard drive
and avoid storing it on online. The idea is that cryptocurrency investors
should be able to see or feel their money. We have already learned a lot from
the QuadrigaCX situation. Apart from that, there is always a threat from
hackers and scams on online exchanges and wallets. The chances of your
currency being stolen are high. A USB Device usually has buttons that ask
the user to confirm or cancel a particular transaction by touching the device-
this ensures that no hacker will be able to record your keystroke.
Never put all your currency in the same place
This is a piece of very common advice and as good as saying that one must
not lay all their eggs in a basket. If one day, an exchange is lost due to any
unforeseen circumstances, you will be protected if you have spread out your
investments across different exchanges. You will minimize your loss in this
way. It may sound very time consuming, but it will also offer you higher
financial security.
Store your private keys
As an investor, you should avoid keeping the same, simple password that you
use for social media. It is advisable to use two-factor authentication methods.
Always make sure that you use more than one key to authorize your
transaction; this will reduce the risk of fraud and scams to a great extent. It is
the same way you would do transactions with a bank account
Back up your private keys
In the event of losing your private keys, you must have a back up ready. It is
better to be safe than sorry. Make sure you back up your cryptocurrency stash
as often as possible- especially when there is transaction done. Make sure you
store it both in a hardware wallet and the cloud so that if one service dies, you
won't lose all your money in cryptocurrency.
Passwords
Make sure you have a very strong password. It should be something that
cannot be cracked easily. Most passwords will create 64 characters, number,
uppercase and lowercase characters. Hackers use advanced password
crackers to hack these accounts. The more varied your password, the better it
is and the longer it will take for someone to crack your password.
Use a secure form of network
Don’t use a public Wi-Fi or hotspot when it comes to doing transactions. Do
transactions only on networks you own and trust to avoid any malware threat.
Make sure you do it on your desktop or laptop. Investors who use multiple
devices on any network are always on a greater risk of losing their money
due to some attack. You don’t want to risk yourself to a malware attack and
lose all your money in the game.
Keep your investment information private
Do not talk about your accounts and investments. When it comes to money,
you can’t trust anyone. Hackers are always stealing your data from social
media and other online forums. Make sure you don’t give out any
information online without any trust. The most important thing is to avoid
talking about your investment activity on social media sites.
Do small trades
Don’t jump into making huge trades at once. If you are new, start with small
and avoid risking yourself too much into it. If you make a huge trade, you are
at risk of drawing more attention since hackers are always targeting the rich
ones. It is advisable to make smaller trades and avoid as much attention as
possible.
How to handle a cryptocurrency crash?
During a crash, the market might go through some of the following events:

1. Exchanges will be stuck or slow due to immense traffic

2. Your cash withdrawal can be halted because of high demand
3. Your brokers might file for bankruptcy
4. Fake websites can take up the opportunity to lure you into a shiny
withdrawal offer scheme.
Here are the following things you need to do when you go through a
cryptocurrency crash. Before that we will need to look at some preventive
measures that you must take before a crash:

1. Keep a stop-loss price in mind and make your exit if the

 cryptocurrency reaches that point.
2. Open your account only with a verified exchange platform
3. Always stay updated on the market situation
4. Make sure you spread out your investment to minimize your risk
Let us now look at some measures to be taken during the crash:

5. Firstly, stay positive and don’t just lose all your hopes. Encash
your currency into fiat currency as soon as possible.
6. You can also convert your currency to some other well-known
currency and mitigate your loss.
7. Person-to-person transactions can also be an option, but this can be
very risky, and you need to make sure you have done some due
diligence over here.
Chapter 7: Popular Crypto Coins and Exchanges
While there are thousands of options in the market, and you might get lured
by a fake website, it is important to be mindful of choosing your coins and
exchanges. These decisions can have an impact on your finances; careful
measures must be taken. It is very important not to get sidelined by the noise
created in the cryptocurrency world and avoid the hype as much as possible.
Popular crypto coins to look out for in 2019
Bitcoin
Bitcoins are still the most popular form of currency in the market. Don’t
ignore it. It is considered to be one of the best forms of long-term investment
in the cryptocurrency markets. The pricing is quite steady, so one can invest
in a few Bitcoins. Very few Bitcoins are left in the market; make sure you
make your investments quickly. You can buy Bitcoins from any popular
exchange platform like CoinBase and store your BTC in a BTC hardware
wallet as well, which is easily available on the Internet. Bitcoins also have the
highest liquidity at the moment and is the best form of investment for
beginners; you will not face a lot of problem in selling your Bitcoin, as there
will always be someone willing to buy your Bitcoin. Since the price is so
volatile, it would require a lot of capital for someone to manipulate its price;
therefore, it is also a safe form of investment.
Litecoin (LTC)
Litecoin was launched to complement Bitcoin. It is a fork of Bitcoin with
very few changes and has been a successful currency for a decade. It has
made a huge success, and investors are always investing in Litecoin, making
it highly liquid. Litecoin also has a great market share in the overall
cryptocurrency economy. It is one of the most trusted cryptocurrencies in the
market as of now.
Binance (BNB)
Binance is a currency of Binance exchange and was launched in 2018 to
enable waivers on the trading fee for Binance exchange users. Binance has
been growing rapidly now and is about to launch a Binance chain as well.
Plus, Binance uses around 20% of its overall profit to buy back BNB and
create scarcity, thus increasing the value of BNB and rewarding its early
users. The plan is to continue doing so until they buy back 50% of BNBs
 Ethereum
Ethereum has always been bullish and is gaining wide popularity these days.
They are very ambitious and are going to make it big in the coming few
years.
One more thing to consider about Ethereum is that it is still being developed
and has some prominent developer’s around the world working on it.
NEXO
Nexo is the world’s first instant crypto-backed loans and is powered by
Credissimo - a leading Fintech firm in Europe. If you are an investor who
can’t part away with crypto and still wants equity, you can use NEXO. Nexo
loans are issues instantly when you collateralize your cryptocurrencies. Nexo
supports 40 plus currencies and gives real dividends to its token holders.
Monero (XMR)
Monero is a privacy-focused currency. The coin uses cryptography and
privacy logins to hide their users' identities. It is also known on the dark web
and is famous for its privacy measures. It is also highly liquid and is always
sitting at the top of the crypto market. It is a much more stable and less risky
form of investment.
Vechain
Vechain is a new blockchain solution provider that aims to leverage the
blockchain technology to build a trustworthy and distributed business
ecosystem which scalable. It was launched in 2017 and is focused on
implementing blockchain solutions. They have implemented blockchain
solutions successfully across several sectors and industries.
Shinecoin
Shinecoin was founded in 2017, which provides Ethereum based
cryptocurrency. Shinecoin uses a model that is designed to increase the value
of your currency. Most cryptocurrencies in the market operate on free
markets and tend to have high volatility in their pricing. One of the most
common threats is that there is no way to mitigate the risk of price volatility
in the currency. Shinecoin works on a model or price plans and actively
works towards making the currency grow stronger.
As an investor in Shinecoin, you will be a part of the money creation process.
Once you buy Shinecoin, you are contributing to its value. Once your
community grows, and more coins are created, every member will benefit
from the currency becoming stronger. As of now, the results have been over
and above expectations. The value of the currencies has increased as per the
price plan, and all the members have been able to liquidate whenever they
wanted to. It offers its investors with an opportunity to improve their
financial situation.
Ripple (XRP)
Ripple is a blockchain technology company that aims at making cross-border
payments cheaper and more secure. A lot of financial institutions use Ripple,
making it trustworthy software. However, the markets for Ripple have seen a
lot of volatility, and it would be safe to invest in Ripple only if you are
looking to wait for a longer duration
Best Cryptocurrency Exchanges
You can buy, sell or exchange cryptocurrencies for digital currency or fiat
currency. If you are looking forward to trading professionally, you can use an
exchange platform to trade. These platforms offer access to an array of
trading tools that you can use for trading. You will have to verify your ID and
open an account with them before that. There are many websites available in
the market where you can do occasional, quick trades without opening an
account as well.
Different types of exchanges
Trading Platforms
These platforms connect buyers to sellers and charge a fee to the user for
each trade. There are broadly two different types of exchanges:
Direct Trading
These platforms offer direct trading options to individuals from across the
globe. Individuals can trade directly with another individual. These platforms
don’t have a fixed market price. Every seller gets their exchange rate.
Brokers
These are exchange platforms where any user can buy a cryptocurrency at a
defined price set by the broker. These platforms are very similar to a foreign
exchange website.
What to look out for before joining an exchange
It is important to do thorough research before you invest in cryptocurrencies.
Here is a checklist for a first-time investor:
Reputation
Do a proper review of exchange platforms and currencies. Understand how
well they are doing in the market and ask questions on open-forum like
Reddit or Bitcointalk
Fees
This is very critical. Most exchanges have their fees mentioned on the
website but keep your eye on any hidden exchange fees. Understand the
process of transaction fees and withdrawal fees. Every exchange will have
their feed model, and it’s good to do a comparison research
Payment Methods
Every exchange platform has their method of payment. Make sure you know
what different payment methods available on these platforms are. If the
options are limited, it’s probably not the most convenient platform.
Verification Process
Most trading platforms will require you to submit some ID for verification
before you make any deposits or withdrawals. Some exchanges allow you to
stay anonymous too. It is a good idea to go with the verification process since
it will protect you and the exchange from scams and money laundering issues
Geography
Some exchange platforms and only accessible from certain countries and are
designed for specific users only. Make sure the exchange you are signing up
for offers all sorts of services in your country.
Exchange Rates
Every exchange platform has its exchange rate; you can save up a lot of
money if you do some research around that.
The Best Cryptocurrency Exchanges
In today’s world, there are tons of platforms to choose for an investor, but not
all exchanges are good and trustworthy. It is important to choose a
trustworthy exchange platform, and the following list is curated based on
reviews and other criteria such as user experience, accessibility, transaction
fees, and most importantly- security. Here is the list of the ten best crypto
exchanges:
 Bitbuy.ca
Bitbuy.ca is a Canadian owner digital platform and was founded in 2013; the
company’s vision is to provide easy, dependable and secure access to digital
currencies. The customer service, use and quick transaction for deposit and
withdrawal have made this exchange one an investor favorite. The platform is
open for beginners as well as a trader and is one of Canada’s quickest
growing exchange platforms. Here are some of its pros and cons
Pros
● Very good customer service
● Quick registration and verification
● Fast processing of CAD deposits and withdrawals
● Low transaction fees
Cons
● Only available to Canadian citizens
ChangeNow
ChangeNow is an instant cryptocurrency exchange program that provides
unlimited crypto conversions. It is a registration free platform that’s been on
the market for over a year and has earned a good reputation for reliable
transactions and great services at affordable rates. There is no need to open an
account to process transactions above 170 cryptos, and for purchasing crypto
using fiat currency. The platform has stayed honest to its customers and does
not collect inflated or hidden fees. The timing of transactions is rather quick,
and the processing speed is less than 2 minutes.
Pros
● No need to create an account
● It has listed above 170 cryptocurrency coins
● It has no restrictions – there is no cap for highest exchange amount
● There are two cryptocurrency exchange flows: standard and fixed-
rate
● It is super easy and can be purchased with credit cards
● 24/7 support team
● Has a mobile application
Cons
● No leverage- it does not offer leveraged trading on cryptocurrencies
Coinbase
Coinbase is backed by trusted investors and is used by millions of investors
worldwide. It is one of the most popular brokers and trading platform in the
cryptocurrency market. The platform is easy to use, buy and store any form
of digital currency. Investors can purchase any cryptocurrency through a
digital wallet that is available on iPhone and Android devices from Coinbase.
● Pros: It has a good reputation, security, reasonable fees, beginner-
friendly,
● Cons: Not so great Customer support,
● Limited payment options,
● Supported in limited countries
● GDAX appropriate only for technical traders.
Kraken
Kraken was founded in 2011 and is the biggest Bitcoin exchange in liquidity
and Euro volume. It is a participant of the first ever cryptocurrency bank.
This platform allows the user to buy and sell Bitcoins and trade between
Bitcoins, Euros, USD, Canadian Dollars, British Pounds and Japanese Yen.
You can also trade other digital currencies like Ethereum, Monero, REP
tokens, Zcash, Litecoin, Ripple, Stellar and ICONOMI using Kraken. They
offer a lot of features along with margin trading. It is a great place for
experienced traders.
Pros
● Again- good reputation with decent exchange rates,
● Low transaction fees and minimal deposit fees
● Great user support, and is secured and supported worldwide.
Cons
● May not be suitable for beginners.
Cex.io
Cex.io provides a host of services for using Bitcoin and other
cryptocurrencies. The platform allows users to trade their fiat money with
cryptocurrencies vice-versa. If you are looking to trade Bitcoins
professionally, then this platform offers personalized and user-friendly
trading dashboards and margin trading. CEX also broker service, which
provides new investors with an extremely simple way to purchase
cryptocurrency at reasonable prices that are more or less in line with the
market rate. The CEX website is also secured.
Pros
● It is a good mobile product,
● Supports credit cards, friendly for novice users,
● Provides decent exchange rate, supported worldwide,
Cons
● Stringent verification
● Fees may change depending on the payment mode
ShapeShift
This is another leading exchange platform that provides various
cryptocurrencies to trade with. If you want to make instant and quick trades
without signing up to an account, you can rely on this platform. Shapeshift
users cannot make payments using debit cards, credit cards or any other
payment system. The platform has a no fiat money policy and only allows for
the exchange between Bitcoin and the other supported cryptocurrencies.
● Pros: Tons of Cryptocurrencies available for exchange, fast,
reasonable prices.
● Cons: Average mobile app, no fiat currencies,
Poloniex
Poloniex was established in 2014 and is a primary global cryptocurrency
exchange that offers a safe trading environment and a wide range of
cryptocurrency pairing and advanced tools with data analysis for investors.
Data analysis for advanced traders. Since it is one of the most popular trading
platforms with very high volumes, users find it very easy to close their
transactions. For makers, fees range from 0 to 0.15%, and for takers, fees
range from 0.10 to 0.25%. One of the unique features on the Poloniex
platform is the chat box that is constantly filled with user help. A user can
write almost anything- moderators eventually delete only the inappropriate
comments. It can sometimes be hard to distinguish the good advice from the
bad, but the Chatbox is a great tool that will keep you educated at all times.
Pros
● Fast account creation, Amazing features,
● High-volume trading and low trading fees
Cons
● Slow customer service
 Bitstamp
Bitstamp is an EU based Bitcoin exchange platform founded in 2011. The
platform is one of the first generation Bitcoin exchanges and has a loyal
customer base. It is one of the most trusted platforms throughout the Bitcoin
community and provides cutting-edge safety features such as two-factor
authentication, cold storage insurance and multisig technology for its wallet.
The support team is also very good and provides 24/7 support with a
multilingual user interface; therefore, getting started is relatively easy. Users
can start trading immediately after opening an account.
Pros
● Good reputation, very high-level security,
● Available worldwide with low transaction fees
Cons
● High deposit fees
CoinMama
CoinMama is a veteran broker platform, and any user can visit here to
purchase Bitcoin or Ether using cash via MoneyGram or credit card. It will
work great for you if you want to make instant purchases using their local
currency. The services are available worldwide, but it might be banned in
some countries. The platform is available in English, German, French, Italian
and Russian.
Pros
● Great user interface, good range of payment options
● Available worldwide, quick transaction time.
Cons
● High exchange rates, a premium fee for the credit card, average user
support.
Bitsquare
Bitsquare is a peer-to-peer exchange that allows you to buy and sell Bitcoins
in exchange of fiat currencies or cryptocurrencies. They market themselves as
a truly decentralized and peer-to-peer exchange that is instantly accessible
and requires no need for registration. They never hold user funds, and no one
can exchange personal data here. The platform is highly secure and offers
multiple addresses, security deposits and purpose-built arbitrator system in
case of trade disputes. If you want to remain anonymous and trade, Bitsquare
is the perfect platform for you.
Pros
● Good safety and privacy features along with the availability of a large
number of cryptocurrencies
● Reasonable fees
● Accessible globally
● Perfect for advanced traders.
Cons
● Limited payment options, average customer support
LocalBitcoins
This is a P2P exchange platform with several buyers and sellers from around
the globe. With LocalBitcoins, you can contact people from your local area,
and deal Bitcoins in cash, PayPal or can deposit cash at their bank. The
commission charge of LocalBitcoins is around 1% for the sellers. The
platform takes a number of precautions to ensure trading is secure. They have
reputation rank system of all their users that is displayed publicly. In the
event of a conflict, LocalBitcoins’ support and conflict resolution team
intervenes and personally resolves these conflicts.
Pros
● Beginner, friendly and usually free
● Available worldwide
Cons
● High exchanges rates
LinkCoin
LinkCoin is a cryptocurrency exchange in Canada. LinkCoin processes
transactions autonomously using smart contracts.
It is also a functional website, along with an Android + iOS app, the platform
has the necessary technological infrastructure to meet the investment needs of
all its user. They have seven cryptocurrencies available for purchase as of
now. They also offer some of the lowest transaction fees in the industry,
which makes buying and selling cryptocurrencies as affordable as possible.
They accept in several forms.
● Pros: Very cheap to sell and free to buy, high privacy and security
along with lots of payment options.
 ● Cons: Limited volume
Binance
If you are interested in crypto-to-crypto trading, then Binance is one of the
best options. It is ranked as one of the most reputed cryptocurrency
exchanges in the world. Binance provides users with impressive offerings
clubbed with an extremely low trading fee. Even though Binance was a
young entry in the market, it is rapidly growing and holds a huge selection of
altcoins. The exchange also offers its coin, known as BNB. The standard
trading fee is only at around 0.1%, which can even be reduced further if the
payment is made within BNB.
● Pros: Very cheap to transact and is available worldwide.
● Cons: No fiat trading.
Gemini
Gemini is a fully regulated, licensed Bitcoin and Ether exchange. Their
regulatory standards are very similar to a bank. Gemini trades in three major
currencies - US dollars, Bitcoin, and Ether. This platform does not serve
traders with other cryptocurrencies. The platform is only fully available to
customers in 42 US states, Canada, Hong Kong, Japan, Singapore, South
Korea and the UK.
Pros
● Security & Compliance
● User-friendly along with great analytics
Cons
● Limited currencies, small community because of limited worldwide
availability
Huobi
Huobi is a San Francisco based exchange provider and is one of the world’s
largest digital asset trading and management service providers. Huobi is only
available to residents of China and USA barring the residents of Arizona,
North Carolina, Alabama, Connecticut, Louisiana, Georgia, New York,
Vermont, Hawaii, Washington, and all US Territories. Huobi provides a wide
variety of coin trading options (more than 50 pairings). They also have a
great support team as they offer their customers around the clock customer
support for free. Charges for trades in USD are .1% irrespective if it is the
maker or taker; trades between crypto-to-crypto are .05%.
Pros
● High end Data Analytics and reports
● Around the clock Customer Support for users.
Cons
● Only Available to Chinese and Some US Residents, USD is the only
Fiat currency supported by the platform.
In a nutshell
It is ideal for picking the right exchange currency platform for your specific
needs. It might be difficult and time-consuming but still a very important
process. Always pay attention to details like transactions fees, the reputation
of the exchange platform, security process and the services it offers to its
customers. Remember that you can diversify this further by investing in more
than one cryptocurrency exchange. This way, you can be a better judge for all
your future investments, and it will also mitigate your risk of loss.
Conclusion
We have finally covered all the basic aspects to look at before you invest in
the Cryptocurrency market. With this, the book almost comes to an end, and I
would like to thank you for choosing this book - Cryptocurrency for
Beginners: Guide to the most common cryptocurrencies and altcoins’
I hope that you found the contents of this book useful and that it educated you
on making sound investment decisions. The book covers everything you need
to know about cryptocurrency, blockchain technology, different types of
currencies and exchange platforms, and gives some tips on investments.
There is a chapter dedicated to explaining to you about investing in
cryptocurrency and all the things you need to take care of before you invest.
The primary objective of the book was to give you a basic tour of the
cryptocurrency world, and I hope that this book has served its purpose. The
book also provides a quick overview of the different exchange platform and
different currencies (altcoins). Some chapters have emphasized on the
following a particular strategy before investment.
As mentioned earlier, the book will only give you a tour of the
cryptocurrency world, and the respective investor must take up total
ownership of their investment and do thorough research from their end to
make sure their investments are safe and secure. You need to understand the
mechanism and technology that oils the cryptocurrency market. One must
follow trends and do a lot of research before making any form of investment.
Diversifying is key and has been mentioned in several chapters of this book.
I truly hope that this book was useful and has helped you answer a lot of your
questions around cryptocurrency. I wish you luck on your endeavors of
investment and carrying out your first-ever cryptocurrency portfolio tailored
to your needs and risk appetite.