10 Things You: Need To Know To Use Crypto

10 things you
need to know
to use crypto
Changelly e-book for beginners
Crypto essentials for traders & investors
Free expert tips and trends
2019
About Changelly
Founded in 2015 Up to 5 000 transactions daily
150+ cryptocurrencies listed 350+ partners using API
1+ million visitors monthly 2500+ affiliates
How it works
1 2 3
Choose the crypto you want to buy Confirm the transaction and sign in/ Send the exact amount to the
with any other crypto * sign up with an email only to save the address provided and check the
history of your transactions purchase on your wallet within
minutes
* for fiat-to-crypto the flow is different
Intro
Investing in cryptocurrency exposes to a novel and promising, yet
highly risky, technically challenging and requiring knowledge and
focus on details asset class. There are several ways to purchase and
store crypto assets.
Although cryptocurrencies were originally intended to be a tangible/

hard asset class based on technical specifications (predefined fixed
emission with no further expansion or contraction), reality is a bit
more complex as prices fluctuate wildly based on market conditions
and user sentiment.
Bitcoin is seen as the industry forerunner and has the highest brand
value, while its analogs have more practical use (i.e. payment, funds
transfer). Bitcoin existed even before the modern cryptomarkets -
one of the early and notorious transactions occured on May 22, 2010
when Laszlo Hanyecz paid 10,000 Bitcoins for 2 pizzas.
3 https://changelly.com/?utm_source=ebook&utm_medium=social&ref_id=blogebook
Later, Bitcoin became a method of payment for Silk Road, a dark web
marketplace for drugs, which helped its popularity in certain social
circles. Another key BTC milestone was the launch of Mt. Gox crypto
exchange in Tokyo. All that iconic and damaging PR helped crypto
industry go mainstream and the genie was out of the bottle. Сrypto
industry as we know it today, took years to develop, with the last push
coming in 2018 making crypto assets easily accessible all over the
world. New crypto exchanges and services are popping up daily and
serve all kinds of investors. There are one-stop services like
Changelly which offer instant coin or token swap, OTC (over-the-
counter) market, and public exchanges.
Trading crypto assets has become easier in some aspects and harder
in others - almost all reputable exchanges will require going through
a comprehensive KYC procedure that includes providing proof of
identity such as a valid passport and participating in a live chat
interview. Also, trading crypto is subject to AML which restricts
withdrawals and may call for additional verifications. Yet, all these
rules and limitations could be easily bypassed by someone with
malicious intent and enough knowledge and experience. The world of
digital assets evolves constantly and offers a wide range of products.
Research and Due Diligence as well as good understanding of
technology will help users keep crypto assets safe and secure.
Changelly will help you easily get into it with this handy e-book.
Part 1. What are you buying?

Ownership and Control: A Special Notice
In 2018, most digital assets were out of Regulators’ reach, i.e. they
could not be seized, frozen, or revoked. However, centralized or semi-
centralized control of the assets is welcomed.
Tokens based on Ethereum can be frozen or revoked, and this has
happened to a handful of projects, such as Bancor and Kick Coin.
Those projects froze funds taken by a hacker and regenerated the
missing tokens. Other tokens may also be frozen or revoked, which
some believe is a positive feature, while others see it as a chance for
centralized control.
Depending on the objective for buying crypto assets, it is best to be

aware of the potential of token freezes. For most mined coins, there
is no chance of coin freezing. For projects like EOS, there is a
procedure that may freeze accounts under special circumstances.
Other tokens, like PAX, have a way to block funds, especially when
required by law.
When you send in cash to acquire a crypto asset for the first time,
what is it that you are getting? Even regulators are now uncertain
what is the definition of sending and receiving Bitcoin or other assets.
When you are making a purchase of crypto coins or tokens, usually
you are setting off a series of transactions, which end up as a final
balance of assets and a form of ownership ensured by technology,
including applied cryptography.
In most general terms, when buying crypto assets, you are receiving
as a unique record in a ledger, and that record is encrypted and
stored in a distributed manner across many computers across the
globes. When using an exchange, or an exchange service, the first
phase of your purchase will show the balance of coins or tokens
displayed as a database entry. Initially, your tokens will be held by the
exchange, usually in a common hot wallet, and will become officially
yours only when you receive it after a withdrawal.
Exchange Wallet: Your personal balance of coins and tokens, which are
stored by a third party. Also used for storing funds of an exchange,
which is an easy, but relatively insecure way to store crypto assets
Once you withdraw the coins or tokens, depending on which asset

you have purchased, the ownership consists of several features. First
is the ownership of a private key, which gives access to the balance of
assets.
The second element is the balance of assets itself. In Bitcoin, this

balance is known as Unspent Transaction Output (UTXO), a special
transaction that re-sends the unspent coins from every transaction.
Other coins, such as Ethereum, use the account model, which traces
the balance changes in every wallet.
UTXO vs. Account Model: The UTXO model is intuitively understood as

paying with cash, and receiving the unspent amount as banknotes of
different denominations, or change. The account model for crypto
transactions works like a bank account, where a single sum is altered.
Hence, when you are receiving a crypto asset, either the Account gets
funded, or you have an UTXO record.
But how do you access this balance and transact? The balance itself is
kept on the blockchain, but you can alter the distributed ledger by
using the private-public key technology.
Private Key: A cryptographically protected phrase which unlocks the

balance of a cryptocurrency. A private key is a tiny set of symbols that is
paired with a public key to set off algorithms for text encryption and
decryption
In the end, the ownership of crypto assets is a lengthy process that

ends up when the final transaction is made from the originating
wallet - an exchange, an individual - into your wallet, to which you
hold the private key.
The record of the balance of digital assets can always be viewed

through a blockchain explorer, a tool created to preview transactions.
Preserving the transaction hash, it is always searchable and
accessible. Buying digital assets leaves a semi-anonymous trace on
the blockchain, which is in no way related to your name and identity.
However, buying the coins is not anonymous, and exposes your

identity, bank accounts, and in some cases, personal documents. We
will discuss the issue of privacy later in this book.
Part 2. Types of Crypto Assets

As Bitcoin started to gain mainstream fame, there was a tendency of
calling any digital asset “a bitcoin”. Assets were conflated with one
another, rarely making a distinction. This made many users blindly
buy up everything in sight, believing the asset to have very similar
qualities to Bitcoin, just by virtue of being based on cryptography,
containing a blockchain, and a distributed ledger.
There are many ways to classify digital assets. There is a basic
distinction between coins and tokens - coins exist with their own
blockchain, while tokens exist on another blockchain, and do not rely
on separate mining.
Coins include Bitcoin, Litecoin, DASH, Monero, ZCash, and many

others. Coins have a simple role of serving as money - a liquid asset
for exchanging it for goods and services. Coins have no additional
functions or use beyond serving as “digital cash”.
Proof-of-stake coins are a special class of assets that do not require

the process of mining to achieve cryptographic protection. Those
types of coins rely on individuals holding a certain amount of coins,
while providing viable hardware that performs cryptographic
computations, but at a rate much lower compared to minable coins.
In effect, owning the coins gives the right to secure the network and
receive rewards. Proof-of-stake can be complete or partial. Some
coins rely on both mining and staking for increased security.
Anonymous coins are a special subset of coins that allow for

obscured transactions which hide sender and recipient.
Coins by Mining Algorithm
Coins could also be classified based on the mining algorithm used.
There is a notable distinction in families of coins, and the choice of
mining algorithm can affect the usage, popularity and market price of
a coin.
Bitcoin is a SHA-256 coin, mined by one of the most complex

algorithm. Bitcoin is mined predominantly by ASIC, specialized
machines that are optimized for performing the specific types of
mathematical transformations in the SHA-256 hash function, and
generate multiple numbers until the right block number is
discovered.
Litecoin, Dogecoin, Viacoin, and others are Scrypt-based coins.
There is one large family of coins using the CryptoNight algorithm. Of

these, Monero is most famous as well as Bytecoin. There are multiple
other CryptoNight coins, which now defunct, but are at one point
dominated the market.
The Ethash algorithm is used most notably by Ethereum and

Ethereum Classic.
The Equihash is an alternative mining approach, which allows mining
using graphics cards. Equihash is used by ZCash and ZenCash.
Other coins include mining algorithms such as Keccac, X11, Dagger-

Hashimoto, and others. Knowing the hashing algorithm and the
parameters of a network give an estimation of how safe a coin is, and
potentially how valuable it could be, based on the computational
work done. The larger the network and hashrate, the more
established the coin is.
Tokens by Mining Algorithm

Tokens are a class of digital assets that aim to derive their value
based on their usefulness. Tokens are not mined independently, but
their transactions are secured by the mining of the underlying
network asset. Tokens can be based on almost any network, and
there are a handful of Bitcoin tokens. But the most popular version is
Ethereum-based tokens.
The reason is for those tokens were used as a form of crowdsourced

financing, known as an Initial Coin Offering, ICO or a token sale.
Tokens are usually acquired by participating in a crowdsale, or can be
received for free in bounty programs, faucets, and airdrops.
A select group of tokens belonging to more prominent projects is sold
on exchanges and exchange services.
The way tokens are stored and used depends on the network on
which they exist. For Instance, Ethereum tokens require using
MyEtherWallet or any other reliable wallets with the ERC20 option
(but also having a small amount of Ethereum to move and transact
the assets). There are also NEO-based tokens, and tokens from the
Waves network, as well as Stellar and a handful of other projects.
Each token requires compatibility with the storing service and
synchronisation of the main wallet with the network, to display and
move the token properly.
The exchange mechanism for tokens is similar to that of any other

altcoins. However, tokens have various kinds of cybersecurity risks
and are often on the temporary maintenance, disabled or not listed
on exchanges at all. Tokens based on Ethereum also have a feature of
being traded on decentralized exchanges, by using smart contracts.
Non-Fungible Tokens
The usual approach to tokens is that they are fungible, i.e. serving a
certain task interchangeably. This rule applies to tokens using the
ERC-20 standard, named after a proposition to build on top of the
Ethereum network.
However, there are other types of tokens, known as ERC-271. Those

assets are unique - each token is valuable itself. The usage of those
tokens is to represent so-called crypto collectibles. Collectibles are
images that are unique, and the token signifies ownership of the
image. Examples include the CryptoKitties game, as well as other
cards and characters.
Non-fungible tokens are not traded on exchanges, but only through
informal platforms. Those assets also have their own forms of
speculation, as rare digital collectibles sometimes reach exorbitant
prices. However, those types of tokens are not considered a solid
investment and are not seen as a part of a crypto investment
portfolio. They are extra speculative, only based on the perceived
value of collectible images.
Part 3. Types of Wallets

A wallet is a piece of technology that is being constantly synchronized
with the blockchain and reflect the final balance of coins and tokens
that you own. It also secures your holdings by using private-public key
cryptography.
Private Key: A cryptographically protected phrase which unlocks the

balance of a cryptocurrency. A private key is a tiny set of symbols that is
paired with a public key to set off algorithms for text encryption and
decryption
Each digital asset has a specific type of wallet and a unique type of
addresses based on encryption. There are multiple-asset wallets, but
each communicates with a separate blockchain.
Types of Wallets
Full or core wallets: Those are the most secure wallets, usually
holding a copy of the entire blockchain. Since this may require
significant memory and time resources, use of full wallets is rare.
Core wallets should be downloaded from trusted websites, as there
have been instances of faked download links with wallets that can be
emptied.
Light wallets: Wallets that do not contain the entire blockchain

history, and are suitable for older coins with large distributed ledgers.
Multi-asset wallets: wallets that hold several assets, and can

communicate with several blockchains. Those include Exodus and
Jaxx, and others.
Online wallets: A wallet accessible through the browser. Offers full

ownership of private keys. This type of wallet is highly insecure,
subject to phishing attacks or using a fake site to steal the unlocking
file or passphrase.
Hardware wallets: Devices that store private keys and communicate

with computers, while never providing users with the access to the
private keys.
Paper wallets: A printout of the private-public key pair. This type of

wallet is used for “cold storage” and could be unlocked later.
When buying any crypto asset, having a secure wallet with backed-up
private keys in advance is a must. The final step of owning crypto
assets for long-term storage is to transfer the funds from the
exchange into the wallet.
With instant exchange services like Changelly, a wallet address is

necessary, so that your exchanged funds could be successfully
delivered to the destination point. Those services do not hold funds in
custody but attempt to reach the user immediately.
We will discuss various types of exchange and trading services later
on in detail.
It is highly important to have a wallet ready. Withdrawing funds to a

wallet is the safest way to store your funds.
Backing Up a Wallet: A wallet is one of the most unforgiving pieces of

software you will use. Forgetting the private key or the derivation phrase
for the private key means a total loss of the wallet. Forgetting a wallet
password is also deliberately made a fatal loss: wallets do not renew
passwords.
Therefore, the best practice is to back up the wallet info in several forms.
User can write down, copy, or print the 12-word seed phrase or the
private key. Store them safely in several locations.
Write down and copy passwords, PIN codes and any other information.
Back up all files, wallet files,or any other information, on several memory
devices.
Transaction process also requires attention. Since most crypto assets

still use long alphanumeric strings for an address, it is easy to make a
mistake typing the address.
Always double-check the address!
Address Checking Pro Tip: Check the first four and last four letters of
the address. A coincidence with another address is highly unlikely. Also,
make it a habit to check a few letters and numbers in the middle.
The reason is that a copy-paste mistake can happen. Additionally, the
clipboard-kidnapping software could paste another wallet address in
place of the correct one.
To be even more certain that the coins you’ve just purchased will
arrive, there is another golden rule: test the wallet with a small
transaction. For some crypto assets, a small initial transaction works
to activate the address operational and include it in the blockchain.
Always test the wallet first and avoid sending significant deposits to a
newly created address.
A newbie also may need to be aware of full node wallets, which are
not necessary in most cases, since they contain the whole history of
the blockchain. The entire Bitcoin blockchain is humongous, having
grown from around 60 GB in 2017 up to 173 GB as of June 2018.
Storing that kind of data is a serious load to consumer electronics, so
light client wallets are a must, at least for Bitcoin, but for other
relatively large networks with older coins. Ethereum nodes are
notoriously arduous to download, and most users avoid holding the
whole blockchain history.
Always test the wallet and address with a small transaction. This way,
you can be certain you are sending to the right wallet, and the network
has spare capacity and fees are reasonable.
Bitcoin and altcoin wallets also adjust the fees for the transaction.
Take note of the transaction fee at the moment - in the case of
Bitcoin, Ethereum and other well-known cryptocurrencies, there are
days of high transaction load, when fees may rise to extraordinary
levels, so the sent amount won’t be enough to cover it
Also be aware of exchange fees for trading and withdrawal - they are
usually relatively low but will be reflected in the final amount.
Part 4. Ways to Purchase Crypto

There are several traditional payment options available to buy crypto.
Depending on the experience level of users, there are various tiers of

exchange services and marketplaces.
The simplest, most user-friendly ones do not require any crypto

trading experience. The asset has a single price, which the user
accepts - there is no placing of orders. Behind the scenes, the service
operator will facilitate the transaction and send the balance of coins
to the user’s wallet.
Exchange services often offer crypto as an alternative to fiat

payment method. The other option is to switch between a more
popular coin and a less popular one. Those types of services usually
levy a higher fee, up to 5% of the order, and may offer prices that
differ from the market. The reason is for a trade-off between
simplicity and order fees. The service takes up some amount of
market risk, in order to offer a quote price to the end buyer.
One of the most accessible exchange services is Changelly with a 0.5%

all-in exchange fee.
Exchange services will often require a know-your-customer (KYC)

procedure that has different tiers of verification, based on the depth
of information they receive about the customer. Each level of
verification has its own user privilege status. A basic account may only
allow the purchase of small amounts, while a full verification may
allow for selling substantial sums each day.
Know your customer - KYC
Exchange services may impose limitations, and part of the process

depending on the willingness of banks to service the client and
complete the transfer of funds. A warning must be made that it is
possible a client’s bank may refuse to send funds to pay for crypto
transactions.
A wire transfer or a bank transfer is the simplest, but also the

slowest approach.
Services as Neteller and Skrill, subject to limitations and AML transfer
ceilings depending on verification, also offer more flexible options.
However, the most demanded option is buying Bitcoin via PayPal,

but since PayPal transactions can be disputed, buying Bitcoin outright
through the service has been limited. However, the way to buy crypto
coins is through intermediary tokens. At one point, the most popular
approach was to buy Second Life Linden Dollars, through the VirVox
exchange. PayPal payments are also accepted through LocalBitcoins,
though this is the riskier options. In general, paying with PayPal must
go through an intermediary form of credit, which is later exchanged
for the coins.
Once again, crypto transactions are irreversible, without the goodwill

of the counterparty, which has every right to refuse returning the
coins or reversing the transaction. On the other hand, traditional
payment options, which are widely used in e-commerce, have always
offered the refund option.
This is also one of the reasons why credit cards are restricted for
purchasing Bitcoin or other digital assets.
Debit cards are a better option, although some services are requiring
3D security debit cards, issuing a special security code for extra
verification.
On rare occasions, it is possible to buy crypto assets with cash on

hand, but those cases involve in-person transactions.
OTC Exchange Services

An alternative way to exchange crypto assets is to use formal or
informal OTC markets. Those range from using well-established
intermediaries like Bitcoin Suisse for large OTC purchases and sales.
Changelly OTC is also a service for large-scale customers.
Localbitcoins is one of the most popular OTC services, directly

connecting buyers and sellers by country and city. This option is
considered risky, although there is a system of feedback for honesty.
The service uses an escrow account to move the funds, and excludes
the usage of credit cards, because a Bitcoin transaction is irreversible,
while a credit card transaction can be disputed. On Localbitcoins, this
type of scam has seen sellers of Bitcoin left both without their coins,
and without their cash transaction.
Localbitcoins offers wide quotes, depending on availability.

Other OTC services include informal exchanges through social media,
and also include an escrow service that releases the coins and
payments. Those services are only available for a limited number of
assets and are not recommended for large sums, as scams are highly
possible.
Investment Apps, Broker Platforms and Investment

Vehicles
There is a way to buy into the price fluctuation and bet on crypto
not owning the asset in the manner explained above, by holding it
into a wallet with a private key. One easy and popular way to invest in
crypto assets is to go for mobile apps such as Circle, Abra or
TabTrader
Those apps do not directly connect to the blockchain, which would

not be feasible technologically. Instead, the tokens and coins in
circulation are held outside the system and only reflected as synthetic
digital assets. While the risk for this type of buying is higher, it is a
faster and more convenient way to invest or trade.
Broker platforms are a fast and dynamic type of marketplace, which

brings together speculators and people with experience from all
markets.
Broker Platform
The third option to acquire crypto assets by proxy is to invest in

funds, which carry a portfolio of assets. Alternatively, it is possible to
buy exchange-traded notes (ETN) based on Bitcoin and Ethereum,
through the Nasdaq Nordic exchange. Investing in the Grayscale
Capital funds also gives exposure to a small portfolio of assets, but
buyers do not own the private keys, hence the assets are held and
disposed of by the fund manager.
Here we will focus on direct approach to transacting crypto by
studying the tech behind it, leaving the other options as additional
information for comparison.
Part 5. Centralized and

Decentralized Exchanges
Centralized exchanges offer the option to buy and hold, or continue
to trade crypto assets. Those types of exchanges are the best option
for intermediate to advanced users and require an understanding of
placing orders.
Centralized exchanges are operated by a business entity, and make

their profit by charging trading fees. Trading fees vary, depending on
the type of asset and the size of the transaction.
Some of the most prominent centralized exchanges include:
HitBTC
Binance
Bittrex
Bitfinex
OKEx
Poloniex
Bithumb
Huobi
Centralized exchanges can be divided into two categories — those
accepting fiat and crypto-only exchanges. With exchanges that accept
fiat, either in dollars or in other currencies such as Korean won or
Japanese yen, the ability to deposit funds may also be limited,
depending on the level of account verification. Exchanges are also
subject to trading limits.
Centralized exchanges operate in all parts of the world. In general,
the world of crypto trading is global. However, for easy use, some
marketplaces are more user-friendly, and more fit to the English-
speaking world. It is also a good idea to stick to the better-established
and larger exchanges, which have a good track record. Smaller
exchanges hold the risk of being hacked, as well as withdrawal
problems and lack of good customer service.
Some exchange services, in fact, use centralized exchanges to execute

customer orders. Other services store funds in a wallet until they run
out of reserves.
Not all digital assets are listed on all exchanges. Some coins and
tokens only trade on specific exchanges, especially early on. With
time, their representation on the markets increases, with more
markets and pairs added. Some older digital assets, which have
boomed in previous years, are in fact more difficult to be found on
the best current exchanges. Inversely, newly created projects manage
to make their way into the most dynamic marketplaces.
One of the reasons is for that older digital asset projects were often a
grass-roots effort, with no concerted goals to increase penetration
and trading. However, exchanges have evolved, and the increase in
the number of digital assets have made them selective regarding new
listings.
Therefore, from 2017 onward, exchanges almost always levy a listing

fee and very rarely list an asset for free. Binance is an exchange
known for its relatively high listing fees. Assets are also listed for free
in the Community Coin of the Month voting program. However,
smaller projects and lesser-known coins and tokens usually have a
hard time finding their way into the most liquid exchanges.
Keeping this in mind, a potential buyer must be aware of the risks

due to low-activity trading and the need to use previously unknown
and untested exchanges.
A Cautionary Tale: In 2016 and 2017, a new digital asset started to be

distributed through a faucet. The asset was known as Rai Blocks and was
later renamed to Nano. The coin is most famous for starting with a price
of around 10 cents, and within a few weeks finding itself with a price of
around $36. However, during that time, Rai Blocks was traded on small-
scale, obscure exchanges. One of those exchanges was Bitgrail, an
Italian marketplace. Those who got Rai Blocks early through the faucet
deposited it to Bitgrail since there were no good wallets around to hold
the coins.
Unfortunately, the wallet of the exchange got hacked, incurring losses of

17 million coins, worth $170 million at the time of the theft.
Always keep in mind that exchanges may be hacked, and new assets
with still untested wallets are even riskier.
The best approach is to use the Exchanges for trading and, then
transferring most of the coins to a secure wallet.
Centralized exchanges work by choosing to sell or buy coins and

tokens at a price that you have some flexibility in determining. For
most exchanges, the quoted prices may be denominated in another
crypto coin. This means that the intuitive dollar price may have to be
recalculated in that crypto prices. For example Bitcoin prices are
usually denominated as a fraction of BTC, as in 0.01 BTC. Otherwise,
for low-priced coins, the price is denominated in Satoshi, which is
1/100,000,000 part of Bitcoin.
Coins could also be traded against Ethereum, Litecoin, and other

coins, depending on the adoption and penetration of the asset. We
will discuss the matter of liquidity and trading pairs later on in detail.
Decentralized Exchanges (IDEX, EtherDelta)
Decentralized exchanges are a type of marketplace which utilized the

technology of projects like Ethereum, Stellar, etc. to facilitate trading
without central authority. Those exchanges require more confidence
in using crypto assets, and the liquidity is usually lower. Decentralized
exchanges allow the user to keep total ownership of their funds, and
the coins or tokens are only sent for trading through a wallet, which
the user controls completely.
Volumes of trading on decentralized exchanges are significantly lower

compared to centralized marketplaces.
A Word about faucets
Faucets have existed since the dawn of Bitcoin - a service paying out a
small transaction of coins. At the beginning, early faucets gave as
much as 5 Bitcoins per registration. Now, the payout is a few Satoshis.
But an early tester of crypto coins could try faucets as a way to test
the usage of wallets and the sending of funds. Bitcoin, Litecoin,
Dogecoin, Bitcoin Cash are all available through the Moon faucets.
The Coinpot microwallet is used to store the coins, and also carries
Dash coins. The microwallet, after collecting a minimal balance, can
send it into a regular wallet.
Faucets may also appear for smaller coins or new projects. The Nano
coin was distributed through a faucet, under the name of Rai Blocks,
and early adopters managed to get valuable assets for free. Searching
out such faucets is a matter of scouring crypto-related social media
and forums such as Bitcointalk.
Faucets rely on web advertising and usually require solving a captcha.
They are just a way to test crypto coins and in the long run may be a
waste of time. Still, faucets can be a fun learning experience.
Part 6. Anonymity, Account
Verification and KYC
Initially, Bitcoin trading was largely anonymous. Later, improved
security was added by the exchanges.
In 2018, most exchanges, whether carrying fiat or crypto only, require

a verification of the identity, in order to access higher limits for
trading. The reasons are manifold but mostly follow official
requirements, mirroring the activity of financial institutions.
KYC requirements or Know Your Customer, make cryptocurrency

trading connected to one’s name and identity. Identity verification
starts with a phone number, and for higher trading limits, may
require the presentation of a valid passport.
Passport Warning: When performing KYC, not all passports are treated
equally. Depending on nationality, only an ID card or a driver license
could be requested. For other nationalities, an international passport is
required.
Unfortunately, some users have been banned from using exchanges

such as Bittrex. Passports from certain countries have been banned. The
countries include Cuba, Iran, North Korea, Syria.
US-based buyers have to check each asset they need to buy, as some
are banned for US citizens, and some projects prefer to limit the sale
to non-US citizens only. The reason for this is that some digital assets
may be considered securities and the issuer to fall under legal ban for
selling unregistered securities. It is still uncertain what kind of coins
and tokens would fall under the definitions of securities, but it is
better to be on the safe side.
It is possible to buy small amounts of crypto assets with just a phone
or email verification. However, there are even fewer chances now to
buy crypto assets with absolute anonymity and limitations apply.
Additionally, the Changelly service, while semi-anonymous, can

require more thorough KYC for selected transactions, especially if the
amounts of funds and the trades are suspicious.
It is always best to complete KYC and lift the limits of the account
before engaging in more active trading. This means that more coins
can be withdrawn into wallets, as there are sometimes limits to
moving Bitcoin or other assets, depending on the exchange service. It
is best to always be aware of withdrawal limits, in order to avoid
having funds locked on an exchange.
The Importance of 2FA

In 2018, most exchanges are reasonably secure, although hacks are
happening occasionally. One essential security element, that is on the
user side is 2FA or two-factor-verification.
Exchanges like Binance always stress the importance of that step.

Using a mobile phone, a user receives a unique code which adds to
the strength of login authentication. Without this step, an account
could be hijacked and the coins could be traded without the owner’s
knowledge.
Part 7. Liquidity and Selecting

Crypto Assets
When choosing to buy a crypto asset, there are multiple issues to
consider, but perhaps the biggest one is how liquid the asset is, and
how readily it can be traded.
The liquidity of crypto markets is a complex issue. Direct purchases

with fiat by first-time buyers are rare, even at peak market prices.
Most of the trading volumes happen, as we discussed previously, in
crypto-to-crypto exchanges.
For that reason, newcomer buyers may have to resort to one of the
two options for exchanging and trading: on-ramp currencies or fixed
price coins, or dollar-pegged tokens.
On-Ramp Currencies: Those are usually large, established coins with a
good track record, safe and well-developed networks and several ways
to buy for cash. Bitcoin has always worked as an on-ramp currency.
Other popular coins include Litecoin, Dogecoin for niche pairs. Ethereum
is immensely popular in pairings with tokens and is widely traded as a
quote currency, but also used as an entry point into crypto assets.
The on-ramp currencies can also be more easily sold for fiat in the same
manner, ensuring the investment can be liquidated on time.
The risk of those assets is that their price also fluctuates, both in dollar
terms and against Bitcoin. In general, using Bitcoin as an entry into
altcoins is risky, and can lead to dollar gains, but losses of Bitcoin
positions. This has made many Bitcoin maximalists warn that owning
any altcoin is more or less meaningless since its price depends on that
of Bitcoin.
The less risky option is to use dollar-pegged, euro-pegged or other

stabilized currencies (stablecoins), and make trades with only one
asset fluctuating.
Dollar-Pegged Coins: Dollar-pegged coins are a relatively new addition to

the world of cryptocurrencies. Noticing the significant price fluctuation,
those stabilized coins use various mechanisms, so that their value in
trading conforms closely to the US dollar.
The most intuitive mechanism is to use funds stored in a bank, ensuring

that each token can be exchanged back into cash. The most famous case
of a dollar-backed token is TetherUS or USDT. The asset unofficially
claims to have bank account balances matching the amount of USDT
tokens, although there has been no official audit of the funds and their
origin.
Tethers can be found on exchanges and to a limited degree, to be
bought through the Tether website. However, selling Tethers is
extremely difficult, despite the promise they are backed by fiat. Through
the central website, exchanges have a long waiting period and funds are
not immediately available.
Tethers are considered essential to the trading of crypto assets, and

ensure about 20% of the liquidity on the markets. Tethers are present
on almost all major exchanges, which is an ideal situation to move into a
multitude of digital assets. Tokens or coins which have pairings with the
Tether are traded more actively and more intuitively.
Other fixed-price coins include TrueUSD or TUSD, as well as the recently

launched Gemini Dollar, Paxos, and a potential asset by the Circle app,
USDC. There are other minor dollar-pegged coins and tokens, as well as
assets linked to the euro and Chinese yuan. The best advice is to choose
the older, more popular coins. The usage of the dollar-pegged coin is a
tradeoff between market risk and the risk of the assets themselves.
Some believe Tether is not secure enough. The newer generations of
assets, the Gemini Dollar and Paxos, offer full compliance with New York
financial regulations, and offer more transparency and security.
The chief utility of fixed-price tokens is that they can be moved quickly
between exchanges. Unlike cash, which could take days and be met with
resistance and losses, especially for international remittances. Tokens
move through the blockchain, always leave a record and some dollar-
pegged assets are present on multiple exchanges. This means a trader
can easily move funds between accounts and arbitrage price
differences.
Fixed-price tokens can also be used during times of volatility, to store

funds and value in case there are expectations asset prices would
weaken.
Buying the tokens is possible through several mechanisms, including the

various project websites. Some of the sellers of tokens may require an
account and some form of user verification. Selling the tokens depends
on exchanges, markets, and pairings.
The third option is to use exchange-issued coins or tokens, to achieve

liquidity.
Exchange-issued tokens are a special class of digital assets, which exist

especially to facilitate trading on crypto-only exchanges. Those include
Binance Coin, Kucoin Shares, as well as lesser coins for niche exchanges.
The coins or tokens are used as a quote currency and support
numerous pairs. The best quality of exchange-issued tokens is that they
offer reduced or zero trading fees, as well as bonuses based on the
earnings of the exchange - as trading fees from other pairs are
distributed.
The market value of those coins fluctuated based on free-market

principles, but they generally keep their value, for being a source of
liquidity on the exchange.
For some, the exchange-listed tokens can be an investment, as they
reflect the success of the exchange. However, for crypto exchanges only,
it is extremely difficult to exchange the tokens into fiat. Usually, those
tokens are limited to a single market, and cannot be moved between
exchanges.
There is one more option to ensure liquidity and adequate funds, and
that is to use actual fiat. This approach is limited to a handful of
exchanges. Bittrex has started unrolling fiat pairs and fiat deposits,
although new accounts require special effort to get permissions to
deposit. Kraken is also a fiat-based exchange, especially accessible for
European customers.
The ability to deposit fiat funds depends on relationships between

banks and their willingness to allow a transaction related to crypto
exchanges. Banks will sometimes post a warning, but at other times,
deny service without explanation.
To avoid banking troubles, test exchanges with the minimum amount

of funds allowed, then transfer larger sums. Make use of the most
favorable banking laws and regulations, and the best approach is to
pick an exchange or an exchange service closest to your country, to
make use of business hours of customer support. Understanding
local banking policies and habits of work is also useful, so US-based
customers may be better-served by US-based exchanges, while
European Union marketplaces have a different type of regulation and
banking approach, using the SEPA Euro Area banking regulation for
faster, cheaper transactions.
There is a class of low priced coins and tokens, which may be

attractive for a small, speculative investment. During the peak times
of the crypto boom, there were many cases of such assets rising from
sub-penny prices to a few cents, enough to provide 1,000-fold gains
or more. However, even a small investment in such assets is rather
complex and involves using several trading pairs.
Exchanges that carry small, niche assets with low liquidity include:
Cryptopia
TradeSatoshi
HitBTC
LBank
CoinBene
There are also other alternative marketplaces, but it is best to search

out exchanges by the asset selected.
The coins and tokens with extremely low prices sometimes have very
low daily trading, as low as 3 BTC in 24 hours. This means that the
price can be swayed by Bitcoin holders with relative ease. Being able
to do a trade in such conditions is extremely difficult, and the 1000-
fold gains may be just on paper, or impossible to realize.
Part 8. Security Tokenomics
On Thursday, December 20th, in a mostly symbolic act, one
Democratic and one Republican United States Congressman
sponsored the “Token Taxonomy Act” to change what defines a
security and to add a definition for “digital token.” Since 1946, “The
Howey Test” has been used to determine whether a business venture
is to be regulated by the Securities and Exchange Commission (SEC)
and how it is to be taxed by the Internal Revenue Service (IRS).
As written, the “Act” stipulates that Initial Coin Offerings (ICO’s) are
subject to regulation as securities until each qualifies as a functioning
network. In their roundtable information gathering session, the
lawmakers were urged to further define cryptocurrencies as
commodities due to their on-platform utility functions, and further, to
switch cryptocurrency regulation to the U.S. Commodity Futures
Trading Commission (CFTC). The IRS would also be directed, by the
just submitted legislation, to exempt, as “de minimus,” the results of
any trades between cryptocurrencies as well as any capital gains
earned as a result of cryptocurrency trading.
Bitcoin (BTC) and the Ethereum platform’s ether (ETH) are not
securities according to the U.S. Securities and Exchange Commission
Chairman (SEC). William Hinman, SEC head of the Division of
Corporation Finance classifies BTC and ETH as “decentralized,” or not
centralized enough to be called a security. There is no decision-
making individual, body, or organization that decides what happens
with the funds raised, collected or otherwise gathered through
issuance of BTC or ETH tokens. A small group controls neither bitcoin
nor ether, by their designed decentralized natures and the ongoing
“proof-of-work” block verification competition between “crypto-
miners.”
Neither BTC nor ETH represents ownership of assets other than the
“hash” that tags the coin’s anonymous owner—a string of 64 letters,
numbers and characters. Bitcoin, ether and other cryptocurrencies
have value because their owners believe in their values, just as each
paper dollar bill has value because holder trusts its value. Those that
hold their ownership support the prices paid for those coins that are
made available by sellers or by the steady increase in supply from
“mining.” But the reverse of the buyer’s bid has been in place for a
year and fewer crypto-believers believe less and buy less.
ICO
Initial coin offerings (ICO’s), are securities according to Jay Clayton of

the SEC. “Every ICO I’ve seen is a security” Mr. Clayton said in
February. That quote was enough for most ICO’s to prohibit deposits,
purchases or participation by US citizens. The geographic residence of
both the owner and the issuer determine the body, agency or
commission that regulates how a security may be offered, registered
and traded. Any ICO, developers feared, if defined as a security,
would be subject to securities regulation by the United States
agencies or by any of the 50 state securities regulators.
Block.one’s EOS (EOS), which began its distribution in the summer of

2017, raised $4 billion (without a live product) by the summer of 2018,
without accepting money from United States citizens, and only
accepting ETH in exchange for the new EOS tokens.
STO
The problem with the SEC classifying tokens as securities is that a

token’s utility as a means of exchange of value within a digital
cryptographic economic environment—a tokenomy—is denigrated or
devalued. Every exchange of a utility token (UTO) would have then to
be reported, tracked, accounted for, and settled as if it were a stock,
bond or any other regulated security. Traditional securities can take
days to settle; whereas token transactions are settled in seconds.
Securitization would not only eliminate the near-instant time
efficiency of a blockchain exchange of value, but anonymous
transactions would be impossible.
STO’s are an attempt to access the market for cryptocurrencies

without running afoul of current federal securities or tax law. The
Security Token Offering (STO) proposes to place tokens on the market
that can be traded on exchanges and tracked by owners, buyers,
sellers, investors, accountants, taxpayers and tax-collectors. STO
issuers, owners and traders would be responsible, if the SEC requires,
for compliance with securities regulations and federal tax reporting.
Every cryptocurrency exchange of value could be subject to capital
gains or ordinary income tax. Just the burden of reporting such
activity could be very expensive.
Hybrid
Some new offerings include a dual-token model. One token, a

security, is traded on a cryptocurrency exchange and is publicly
quoted, as are stocks, bonds and mutual funds. Another token, a
utility, purchased with the security token upon entry, allows for the
exchange of value on the platform or in the tokenomy.
In the two-token model, the utility coin (UTO) is not classified as a

security and can, therefore, be freely exchanged for a real-world
value that has been “tokenized,” that is specifically described by a
unique identifier that acts as a deed, title, receipt or ticket. Utility
tokens can digitally represent, with a “smart contract,” a real-world
asset, service, access, or usage agreement. A tokenized asset can be
exchanged digitally, instantly and anonymously on the platform.
ShareRing, a platform for trading real-world assets, is a recent
offering that resembles the two-token model. ShareToken (SHR) will
be used as the STO on exchanges, while the second token, SharePay
(SHRP), will be used as the utility token for sharing services.
Bincentive also has a dual token system: BCNT which trades, and MST
(Margin Stable Token) which is fixed in value to the price of BCNT.
Congress must adopt new legislation, and adapt to a new and more
efficient means of value transfer between individuals, companies and
countries. Cryptocurrency issuers, users and developers would like
the SEC to limit its purview to tokens that have been issued as STO’s
and allow tokens that are not traded on exchanges—UTO’s—to be
transferred between users of certain “tokenomies.” If the SEC were to
limit its regulation to publicly traded coins as securities, the door
would be open for expansion of new insular token economies where
value is exchanged but is enumerated only in terms of the digitally
local UTO. Assets, services and usage traded in such an alternate
economic environment cannot be tracked or taxed in a fiat currency
economy. The taxman may yet lose money. The cryptocurrency
community would very much like the SEC and the IRS to look at UTO’s
as if they were foreign currency traded in a foreign country and no
business of the United States.
Part 9. Trading Risks and Mechanics

Despite the seemingly unlimited upside potential, one has to keep in
mind the risks involved in cryptocurrency trading.
Besides the usual market risk (asset price going down) a crypto trader
is exposed to non-market risks that don't usually exist in mainstream
markets:
1) Regulation risk - at this point in time, the crypto industry is still

largely unregulated, so the trader is not protected by a governing
body which means that crypto exchange policies are not enforceable.
2) Asset risk - trading in any asset could be suddenly halted and funds
frozen indefinitely if the coin/token is deemed to be fraudulent by the
Exchange.
3) Exchange risk - the Exchange can get hacked, shut down, or even
bankrupted by its owners, putting customer funds at full risk.
4) Crypto "storage" risk - not adhering to the basic common sense

internet security rules (lost or stolen wallet private key/password,
using unsecured wifi etc.).
5) Crypto "transit" risks - accidentally sending coins to the wrong

wallet address is irreversible and results in total loss.
6) Overnight risk - cryptocurrencies are traded 24 hours 7 days a
week, so it's physically impossible to monitor the situation at all
times.
The world of crypto assets is new and developing, and there are
constant surprises and losses, for various reasons. Technical, human
factor, unexpected bugs, as well as deliberate scams, are constant
threats for both new and veteran investors and traders. Not all assets
are created equal, and it is extremely easy to fall for cases of faked
tokens, scam token sales, or schemes promising quick returns.
It must be noted that crypto assets come with an implied volatility

warning, which in some cases could mean an immediate loss of 99%
of an asset value. Sometimes, a project could crash due to just one
piece of news, even if everything was going well up until that
moment.
There are several types of scams, as well as potentially risky technical

issues, which may come as expected or unexpected losses to any
crypto buyer.
To start trading crypto, register with the exchange of choice, verify
your identity and fund your trading account. After the funds have
been transferred, go to the trading terminal, select a trading pair in
the “Instruments” section and set up an order.
(HitBTC)
Click "Buy" to perform a trade.
You can always check the fees and the

history of your trades on the particular
market in the related section. Normally, your
cancelled and rejected orders are shown for
the last 24-hour period.
Part 10. Popular Scam Schemes
For brand new, as well as for old digital assets, downloading and
using the right wallet is extremely important. Use official wallets only
and for just created assets, it is best to wait and see if user reports
appear. It is possible that in the hassle and chaos of new coin creation
a wallet can be created with the code allowing the theft of funds.
There have been such reports and wallets for assets like Bitcoin Cash,
Bitcoin Gold. Be very careful when downloading a wallet from the
GitHub page of a coin. GitHub pages have various levels of access,
and in the case of Bitcoin Gold, an unknown person managed to offer
his own wallet version, which was accepted by the community. A few
days later, the balances of coins were missing, taken by the hacker.
BEWARE OF SCAM
The other dangerous scam is fake online wallets, accessible through

the browser. Those wallets steal funds in a similar manner.
Some wallets produce “tainted addresses”, which means that the

phrase from which the private key is derived is known. When the
derivation phrase is known, anyone can re-generate the private key,
and take ownership of the coins.
Pyramid, or Ponzi schemes
This type of scam has existed alongside cryptocurrencies for years,

starting almost immediately after the launch of Bitcoin. One of the
most notorious examples is OneCoin, an international scheme that
relied on new recruits to pay out higher tiers of the pyramid. OneCoin
collapsed in early 2017 when Bitcoin prices started to crash.
But the most notorious example was BitConnect, advertised as a

crypto lending scheme. BitConnect appeared in 2016, as a small-scale
crypto lending venture. But as Bitcoin prices rolled higher, the efforts
of BitConnect to popularize itself increased. The PR campaign
included large-scale events in rented halls, featuring iconic sales
pitches. At the same time in social media, especially in YouTube, with
high-profile promoters.
However, buying into BitConnect was extremely problematic. The BCC

coin was only trading on a single marketplace only, especially created
to facilitate investments into the BitConnect scheme. This meant that
no other markets accepted the coin, or there was very little trading.
Also, the price of BCC rose constantly, but the payouts were received
in dollars only.
When the BitConnect scheme collapsed in January 2018, the coin was
lightly traded on a handful of exchanges only. A few months later, the
coin was delisted, leaving users with a defunct digital asset that no
exchange wanted to deal with. BitConnect, along with the similar
DavorCoin scheme, was the biggest cautionary tale in the
cryptocurrency market, showing that not all coins and tokens are
reliable.
Faked exchanges
This is a relatively mere scam, in which a cloned exchange site steals

login credentials. It is a type of phishing scam, affecting the most
visited exchanges. It is always best to bookmark exchange login pages
and check the address bar before committing the password.
Faked ICO buying addresses
During peak ICO interest, all it took to purchase tokens was to

sending Ethereum to the designated address. However, since projects
were in a hurry, some saw their websites hijacked. A hacked injected
their own Ethereum wallet, in effect taking in the funds meant for the
ICO. Since then, the interest in token sales has waned. However, it is
best to double-test the address through other links and social media,
in case of investing into an ICO.
Phishing attempts
These types of common scams usually aim at two things. One is to

make naive user send a transaction, usually in Ethereum. The gullible
customer is enticed with a promise of a token bonus.
The other is trying to steal a user’s private keys. Usually, an email or a
social media personal message, through Telegram, Slack, or other
channels as well, will request the user log into his online wallet -
usually MyEtherWallet. However, the link is a cloned copy of the
wallet, with a slight change in the spelling.
To avoid this scam, it is best to have MyEtherWallet bookmarked, and
never search the wallet through Google.
Also be aware that MyEtherWallet does not need to verify anything

and ask for the private keys. No project will ask for anyone’s private
keys under any pretext, so all emails asking for the login file,
passphrase or anything else, should be automatically considered a
scam.
Fake Tokens
There is a minor class of scams that uses wording confusion to make

a buyer exchange his funds into tokens that only resemble an official
asset. The crypto world has platforms such as Waves and NEXT, which
offer a form of trading between tokens, coins, and of course, Bitcoin.
In this platform, Bitcoin is represented by a token - the real Bitcoins
are parked into a safe wallet. However, users have tried to generate
fake tokens of the same name or ticker. Recently, tokens with the
name of EOS have been presented as the real asset.
Be aware of the platform where the tokens were bought on. With
most exchanges and services this is impossible, but in some cases
new buyers may receive useless tokens.
Twitter Fake Giveaways
This is a notorious form of spam that Twitter has not been able to
eradicate completely. The usual format is that a fake account of a
celebrity will offer free Ethereum, but expects a deposit first. As a
matter of practice, the scammers ask for Bitcoins as well. Those
scams are pesky, and luckily, have not managed to lure in too many
senders. They are similar to earlier schemes promising to double your
Bitcoins but ended up stealing them.
Part 11. What Cryptocurrencies

To Buy in 2019
The hottest coins and tokens are in a constant rotation. Until the
summer of 2017, a handful of assets had achieved prominence, while
others fell out of favor.
In 2018, new coins and tokens spread quickly through exchanges and
were added to consumer-friendly exchange services. Almost all well-
established services, such Changelly, continuously are adding new
assets, and some of the brand-new coins that have created significant
hype.
Most of the newly arrived digital assets in 2018 existed initially as

tokens, but in the past months moved on to their own blockchains,
requiring additional wallets to store safely. Here is a short list of some
of the most in-demand tokens and coins, which are actively traded
and offered as investments:
EOS: A unique digital asset that officially launched its network in July
2018. Instead of miners, EOS is verified by block producers, which are
elected by all token owners who would cast votes. Casting votes locks
the coins for a short period. The EOS project aims to build a
distributed operating system, in which users pay for computational
power. EOS is highly dependent on Bitfinex trading.
TRON: Also known as Tronix, with the TRX ticker. TRON is a Chinese
project aiming to transform online entertainment and file sharing.
While TRON has no functioning product yet, the TRX asset has been
actively traded. TRX is also extremely volatile and subject to
speculation, going from sub-penny prices to above 20 cents, then
crashing again to 20 cents. TRON is predominantly traded on Binance,
though it is also distributed to other markets, including the Changelly
service.
Cardano: Also known as ADA, this project is a bit slow unrolling all the
promised functionalities. Cardano was attractive for offering a novel
form of consensus, but for now, it acts as an ordinary cryptocurrency.
Stellar: This up and coming coin became popular in 2018, as being
one of the networks with high speed and real-world applications. The
Stellar protocol allows for fast cross-border transactions of value.
Tezos: This is a wild card in the world of crypto assets, barely out of
the testing phase. Tezos also uses voting and delegates to secure the
network and has a strong community. However, its market price is
still in the price discovery stage, and it is rather difficult to acquire
Tezos, or XTZ, directly for fiat.
Ethereum Classic: This coin has been relatively long while on the
market, dating back to 2016 when the network split off from
Ethereum. However, the addition of ETC to the Coinbase helped
popularize it. ETC is reluctantly traded on Asian exchanges and is yet
to reach triple-digit prices, unlike Ethereum.
ZCash: It is a relatively new coin offering anonymous technology. This

asset is well-established with wallets and exchanges. ZCash is seen as
a leader in the technology of obscure transactions.
The above assets, as well as lesser known tokens and projects such as
OmiseGo, Basic Attention, have been singled out as worth the
attention of investors and traders. This selection is in no way an
investment advice, but an overview of the latest developments in
cryptocurrency and token markets.
Buying a digital asset is a multi-step process which could be mastered

with acquiring knowledge about and paying special attention to the
latest developments.
The process of buying crypto assets includes several steps:
Researching and understanding the coins or tokens;
Finding a suitable platform based on preferences and location;
Choosing a payment method, and the amount to be spent;
Ensuring a completed account with KYC procedures as required;
Setting up a crypto wallet for the chosen assets;
Buying the assets and storing them either at the exchange, for
immediate trading, or into wallets for longer-term storage.
The value of crypto assets is extremely volatile and unpredictable. In

fact, for some coins and tokens, the price movements are
premeditated and concerted market manipulation. Cryptocurrency
markets should be approached with extreme caution, and the best
approach is to not invest more funds that one can afford to lose.
It is the best to start with a small investment and follow the price
movements to get a feel of how a coin acts, before committing to
buying more. Services like Changelly offer a range of options to test
multiple assets, without the having to learn the trading tools.
In 2019, the importance of price-stabilized coins is also rising. New

types of coins are appearing, claiming to be backed by real-world
assets, or by foolproof methods of keeping their value pegged,
usually to the US dollar. For crypto newcomers, this looks like an
appealing opportunity to avoid risk.
Buying into crypto assets also means taking the risk of the technology
itself. While all blockchains are secured by unbreakable cryptography,
the systems still keep getting attacked or exhibit bugs and errors
which could lead to losses. Exchanges and wallets also allow for
vulnerabilities, and sometimes, the blockchains themselves are
attacked by malicious agents, attempting to double-spend funds.
While crypto coins and tokens allow for unprecedented personal

freedom, the sector is still new and making up rules and limitations
on the go. The best approach is to be cautious and rational, not
expecting immediate high returns, and to be prepared for high
volatility compared to other assets.
Handling digital assets also requires good safety habits of backing up

wallets, passwords and 12-word wallet phrases.
However with all the steps covered, cryptocurrencies might become

an eye-opening experience in trading and investment for the 21st
century.
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10 Things You: Need To Know To Use Crypto

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10 things you

Crypto essentials for traders & investors

Free expert tips and trends

Although cryptocurrencies were originally intended to be a tangible/

Part 1. What are you buying?

Depending on the objective for buying crypto assets, it is best to be

Once you withdraw the coins or tokens, depending on which asset

The second element is the balance of assets itself. In Bitcoin, this

UTXO vs. Account Model: The UTXO model is intuitively understood as

Private Key: A cryptographically protected phrase which unlocks the

In the end, the ownership of crypto assets is a lengthy process that

The record of the balance of digital assets can always be viewed

However, buying the coins is not anonymous, and exposes your

Part 2. Types of Crypto Assets

Coins include Bitcoin, Litecoin, DASH, Monero, ZCash, and many

Proof-of-stake coins are a special class of assets that do not require

Anonymous coins are a special subset of coins that allow for

Bitcoin is a SHA-256 coin, mined by one of the most complex

Litecoin, Dogecoin, Viacoin, and others are Scrypt-based coins.

There is one large family of coins using the CryptoNight algorithm. Of

The Ethash algorithm is used most notably by Ethereum and

Other coins include mining algorithms such as Keccac, X11, Dagger-

Tokens by Mining Algorithm

The reason is for those tokens were used as a form of crowdsourced

The exchange mechanism for tokens is similar to that of any other

However, there are other types of tokens, known as ERC-271. Those

Part 3. Types of Wallets

Private Key: A cryptographically protected phrase which unlocks the

Light wallets: Wallets that do not contain the entire blockchain

Multi-asset wallets: wallets that hold several assets, and can

Online wallets: A wallet accessible through the browser. Oﬀers full

Hardware wallets: Devices that store private keys and communicate

Paper wallets: A printout of the private-public key pair. This type of

With instant exchange services like Changelly, a wallet address is

It is highly important to have a wallet ready. Withdrawing funds to a

Backing Up a Wallet: A wallet is one of the most unforgiving pieces of

Transaction process also requires attention. Since most crypto assets

Always double-check the address!

Part 4. Ways to Purchase Crypto

Depending on the experience level of users, there are various tiers of

The simplest, most user-friendly ones do not require any crypto

Exchange services often oﬀer crypto as an alternative to ﬁat

One of the most accessible exchange services is Changelly with a 0.5%

Exchange services will often require a know-your-customer (KYC)

Know your customer - KYC

Exchange services may impose limitations, and part of the process

A wire transfer or a bank transfer is the simplest, but also the

However, the most demanded option is buying Bitcoin via PayPal,

Once again, crypto transactions are irreversible, without the goodwill

On rare occasions, it is possible to buy crypto assets with cash on

OTC Exchange Services

Localbitcoins is one of the most popular OTC services, directly

Localbitcoins oﬀers wide quotes, depending on availability.

Investment Apps, Broker Platforms and Investment

Those apps do not directly connect to the blockchain, which would

Broker platforms are a fast and dynamic type of marketplace, which

The third option to acquire crypto assets by proxy is to invest in

Part 5. Centralized and

Centralized exchanges are operated by a business entity, and make

Some exchange services, in fact, use centralized exchanges to execute

Therefore, from 2017 onward, exchanges almost always levy a listing

Keeping this in mind, a potential buyer must be aware of the risks

A Cautionary Tale: In 2016 and 2017, a new digital asset started to be