At the end of 2020 and into 2021, we entered into a bull run for cryptocurrencies. Some people remember back in 2017 when Bitcoin became a household name. That is when I became interested in Bitcoin, but at the time I had no idea how to buy Bitcoin.
I am in no way an investment specialist nor am I qualified to give investing advice. I just want to share my journey into cryptocurrencies.
You can look up the definition of cryptocurrency. In general, it is a currency that can be used to buy and sell goods and services. When I started exploring crypto, I learned there was more.
In addition to Bitcoin, there are also altcoins. An altcoin is any coin or token that is not Bitcoin. In 2017, there was a huge bull run that saw Bitcoin go from less than $1,000 to around $20,000 per coin. Then Bitcoin fell to just more than $3,000 per coin. Make no mistake, it is volatile.
Bitcoin is back in a bull run and it is worth nearly $54,000 per coin. Someone who purchased one Bitcoin back in 2009 would have seen growth of more than 675,000 times the initial investment. Compare that to Microsoft and Amazon with a lifetime growth of between 2,300 and 3,500 times the initial investment.
In 2018, I decided I’d buy Bitcoin. I had no idea what I was doing and ended up not making a purchase. I tried to sign up to a Bitcoin exchange. When the exchange wanted all sorts of personal information, I balked.
In 2021, I decided to try again. In January I found a couple YouTube channels with a focus on educating viewers about cryptocurrencies. One such channel was 99Bitcoins.
I learned that many legitimate exchanges get your personal information because they report financial information for taxing purposes. This means paying taxes which will keep me out of trouble.
The cryptocurrency owner is ultimately responsible to safely store Bitcoin and altcoins. There is no FDIC insurance on cryptocurrency.
There are a few methods for storing cryptocurrency. One is leaving it on the exchange where it was purchased. The pro is that you don’t have to do anything but the con is that you are entrusting the exchange to protect the coins. Another method is to use an offline wallet — called cold storage.
The offline wallet is typically a physical device that looks like a thumb drive. It is better security because physical access to the device is typically necessary to sell your cryptocurrency. I chose an offline wallet so I would control my own destiny.
There are a lot of exchanges where one can buy and sell cryptocurrency. One of the most popular is Coinbase. Gemini is another exchange that is considered one of the easiest to use for beginners. Both require authenticating your identity. After my research, I thought Gemini was the best exchange for me.
When I got into Bitcoin in January I was unable to purchase a full Bitcoin because the price was nearly $40,000. Purchasing a fraction of a Bitcoin is an option and that is what I did.
With today’s value of Bitcoin at nearly $54,000, my growth was a percentage of the $14,000 gain. Having not sold the fractional Bitcoin I own, it is possible I don’t realize the gain should it go down in value.
Cryptocurrency is very, very volatile. I would never, ever put any money into it that I couldn’t afford to lose. That part is very important.
My journey started without knowledge and quickly ended. Later, I watched educational videos. These videos helped me find reputable exchanges and helped me better understand how to safely store my cryptocurrency. I finally made a small investment. Now, I am enjoying the ride — again with money I can afford to lose if the market crashes again.
Anderson is a computer programmerwho enjoys serving the community through various community-oriented service jobs.
