The Beginner’s Guide To Crypto
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The Beginner’s Guide To Crypto


Hello everyone,

I would like to welcome you to my beginner’s guide to cryptocurrency. This is not intended to make you a power user that is harvesting their yield optimizing market-making positions. Instead, this is meant to give you a beginner’s understanding so that you can safely assess your options and the costs involved. My biggest piece of advice is easy - do your own research. I will be providing you with the tools necessary to avoid the silly and simple mistakes that can happen when first getting into crypto. Armed with this knowledge and your future research, you will avoid unnecessary swaps, understand high gas costs and start earning how you want sooner. If any of these terms don’t make sense - I will break these down for you in an easy, digestible manner.

This guide is meant to walk you through:

  • Different blockchains and their tokens;
  • Wallets and getting started; and
  • Acquiring tokens and what to do with them.

This is not an endorsement for ANY specific tokens, blockchains, strategies or investments. This is written to allow you to actively and intelligently weigh your options and reduce/minimize losses due to confusion (incorrect swaps, wrong blockchain, too low/high gas fees, etc) so that you may complete your own research with confidence. Always do your own research (DYOR) prior to investing. Any references to specific entities are for illustration purposes only and this is definitely not financial advice. Your ability to buy or sell crypto from fiat currency (i.e. USD) will vary depending on your country of residence and its related laws and your financial institution’s policies. For example, I have friends in Canada, where cryptocurrency is legal, saying that their financial providers will/won’t/may allow their purchases of known cryptocurrency.

Understanding the building blocks

Before we can dive into how we can make sweet, sweet profits, we need to figure out what cryptocurrency is. I will speak in broad terms and make comparisons where applicable because this is more about the nebulous blob that is crypto and not how “great is token ______!” Here is the definition of cryptocurrency according to Investopedia (emphasis mine):

A cryptocurrency is a digital or virtual currency that is secured by cryptography, which makes it nearly impossible to counterfeit or double-spend. Many cryptocurrencies are decentralized networks based on blockchain technology—a distributed ledger enforced by a disparate network of computers. A defining feature of cryptocurrencies is that they are generally not issued by any central authority, rendering them theoretically immune to government interference or manipulation.

Looking at the parts that I have highlighted we can extract that it is a virtual currency that is nearly impossible to counterfeit thanks to blockchain technology, a distributed ledger. Think of this as a train ticket. It has a value that fluctuates (season, weather) that you buy with fiat currency (cash) and redeems for a ride later on (protocol uses); like that but digital.

That blockchain sounds pretty important.

It is!

This is the part of the technology that can be confusing since the blockchain networks have a corresponding token/coin and the terms get used interchangeably even though it isn’t always accurate.

The most basic idea of blockchain is that it is the technology that powers the data that the network runs on. It takes transactions and places them into chronological blocks to be processed, then a network of peer-to-peer computers process the transaction for authenticity (distributed ledger), once approved the network completes the transaction, once the entire block has been processed it gets added to the end of the chain of blocks hence the name blockchain.

Notable examples of Blockchain technology are Ethereum (ETH), Binance SmartChain (BSC) and Bitcoin (BTC). There are more and you could invest in them if you so choose, however,  when doing your research or picking your investments - ensure it is on the corresponding blockchain.

Additionally, on these blockchains, you will see tokens being exchanged. These can have underlying functions (protocols), or they can be standalone stores of value (SoV more below) or they can do both. Do your own research to determine if the protocols are useful and if you believe they will mature in value or provide a larger underlying function or both. 

Examples of tokens/ticker are:

  • Bitcoin (BTC)
  • Ether (ETH)
  • CAKE
  • JET
  • SUSHI

There are different types of tokens so make sure the strategy you are considering is compatible with the token you are researching. For example, BEP20 and BEP2 both work on BSC but are not directly interchangeable; you need to swap between them. ETH BEP2 is very different from ETH. A physical comparable would be if you own a Ford vehicle and take it to a Subaru dealership for repairs. Sure, they can fix it but they will need to order parts and maybe even import them. Where if you had gone directly to Ford you would have avoided those unnecessary fees.

The last thing to clear up before we dive deeper is transaction fees. The interactions you make will require your tokens to get from your wallet to another wallet. The distributed ledger will process this but for a price. This transaction fee is commonly measured in “gas”. The gas is denominated in the coin of the blockchain. Bitcoin charges BTC, Etherium charges ETH, Binance SmartChain uses BSC (but this is actually BNB as well, DYOR). Again, there are more blockchain technologies and they will use probably use their own as well (i.e. ATOM on Cosmos Network). 

Due to the decentralized aspect of crypto, there is no bank dictating the price. Therefore you can modify your “gas” and affect your transaction speed. Caution, if you use too little gas your transaction will fail and you will still use gas in the attempt; if you use too much you will overpay. If you want it there sooner - add more gas. If you’re not in a rush because you're sending your brother some currency for fun, a little less gas because it can arrive tomorrow without issue. If a network is experiencing high traffic which is affecting the gas price you can wait till later to try the transaction at a less busy time. Currently, Etherium is expecting a lot of network congestion and due to this has higher than usual transaction fees, Etherium 2.0 is expected to solve that but it is in the future and doesn’t help now. Things like this may determine where you invest. Remember the transaction fee/gas is not paid to the recipient, it is paid to the distributed ledger network providers and/or liquidity providers.

Disclaimer: I have very little ETH working for me due to the high transaction fees but that doesn’t discount its massive role in cryptocurrency or the fact that it is comfortably #2 after Bitcoin. At the time of writing, this was true and it is not meant to dissuade anyone from investing in anything. I’ve said it once or twice, and I will say it again - do your own research!

This is everything I want. I’ll buy it!

Now that we understand what we are looking at, let’s figure out how to get involved.

You need a wallet.

Well, that sounds pretty easy. I am currently sitting on mine, it’s in my back pocket. Unfortunately, that won’t cut it this time. 

You can have a physical wallet that stores your keys and tokens (I have not used one, you will need to do your own research but at least you now know it exists). This is the most secure to digital threats but if you lose it you are on your own - makes sense. My understanding is Ledger is the leader in this but I have not researched it because I use a digital wallet that I like.

The other option is a digital wallet. Personally, I use Trust Wallet on Android. One thing of note, the iPhone version does not have a dApp browser (more below). I recommend Trust Wallet on the level that I use it and like it - I am not saying it is the best in security or features or accessibility or ease-of-use or etc (although it may be, I actually don’t know - I just like it). There are other options including MetaMask, Coinbase, Binance and more. DYOR on which will best serve your specific needs and circumstances.

A wallet can be set to a specific blockchain or it can be a multi-coin wallet. Wallets can be custodial or non-custodial. In a custodial wallet, you have your private keys and have complete control of your wallet. In a non-custodial wallet, the provider keeps the private key which provides a backup and additional security. Think of this as having money in your wallet vs. cash in your bank account accessible through your debit card. Do your research to ensure the tokens you want to hold can be held in the wallet you intend to use.

Your wallet will have a public address that you can share with people or businesses and it will enable them to send (give) you tokens. The sender pays for the gas. The public address should be available as a text string or a QR code. Most apps have a 1-click copy function within them. This is the address that gets used in dApps.

You will also have a 12-word recovery phrase, that is your only way to unlock the private side of your wallet that allows you to send tokens. I have not encountered a single situation where someone has needed my private key. If you are typing your 12 words and it isn’t to log into your wallet, you are probably getting scammed. I read about it every day on Reddit, Twitter, Facebook, Insta - “I gave a rep/friend/business/unknown internet entity my private key and now my wallet is empty”. Never give out your recovery phrase. If you have chosen to give it to someone, you are going against the only actual advice in this entire post.

Security items of note when setting up a wallet:

  • You will get a 12-word security phrase.
    • THIS IS THE ONLY MEANS OF RECOVERING YOUR WALLET.
    • NEVER LOSE.
    • NEVER SHARE.
    • Seriously, this is the only way to get “in” to your wallet. Be 100% certain of why you are giving this out. If in doubt, don’t do it!!!
  • Public address
    • You will get a public address that you can freely share and it will allow you to receive tokens.
    • If you have a multi-coin wallet, different tokens may have different addresses - double-check.
  • Always double-check addresses. Once you press send it is never coming back. Ever. Under any circumstances. Ever.
    • Always double-check addresses. Once you press send it is never coming back. Ever. Under any circumstances. Ever.

dApps?dHeck-is-that?

Decentralized applications are programs that run on a distributed peer-to-peer network. Sound a lot like a distributed ledger? dApps are at the heart of decentralized finance (DeFi). The distributed aspect of the ledger and applications contributes to the confidence in the system through transparency and recordkeeping. There are other applications for this technology.

You will need a dApp Browser to most effectively interact with these. I use the Trust Wallet which has a built-in dApp browser (Android only). Once again, if you are choosing a different method of interaction take your time and research a secure option.

Getting tokens

By now you should have researched the blockchain(s) you are interested in, picked a wallet(s) that supports the tokens you are interested in and cruised around a bit on your chosen dApp browser to explore what is out there.

There are a few ways to access the actual purchasing of crypto and this will most certainly vary by country, by the financial institution and even by the exchanges themselves. Laws in your country may not allow you to purchase and/or hold a cryptocurrency. Some countries have included cryptocurrency in their tax laws and you may be subject to it. All cryptocurrency is inherently risky and you should only invest money you can afford to lose. You may not be able to withdraw to fiat currency later on. Laws may change from when I write this to when you buy to when you sell. Here is the broken record again - you must do your own research to ensure you are not violating any laws or placing yourself in harm's way. This is not legal or financial advice and crypto is truly the wild west. You have been warned. 

I will provide some examples below of different means of acquiring tokens. I am not recommending any particular place nor am I vouching for it in any way - implied or otherwise. Dare I say it - do your own research!

The main ways of getting crypto are:

  • Receiving from someone else who currently holds some in their wallet.
    • This can be a friend or colleague who wants to introduce you to crypto. Remember to pay that forward later on :)
    • You can make use of “faucets”. To promote the adoption of a token the protocol maker may provide a free giveaway, a faucet. Conditions vary.
    • You may receive an “airdrop”. To promote the adoption of a token the protocol may reward holders based on certain criteria. Completed a transaction, hold the token, sold the token, staking, etc. Conditions vary, read the fine print.
  • Buying on a centralized exchange
    • These are businesses that usually (but not always) convert from fiat to crypto and back. Which blockchain they are on and which currencies they accept vary from exchange to exchange.
    • These are usually legitimate businesses with online and physical locations/offices but not always. Due to them being businesses they tend to be subject to know-your-client (KYC laws), anti-money laundering and tax laws.
    • They typically verify your identity and will report capital gains and such to the appropriate regulatory body - again, not always.
    • Examples include:
      • Binance
      • Coinbase
      • Kraken
  • Buying on a decentralized exchange (DEX)
    • This is an exchange that facilitates peer-to-peer exchanges of tokens without the need for an intermediary.
    • Depending on the specific service you may have to:
      • Send your tokens first. Make sure you trust them. Simple Swap works like this.
      • Takes your tokens and exchanges them immediately with the use of smart contracts. PancakeSwap (BSC) and SushiSwap (ETH) work like this.
  • Other ways.
    • There are definitely more ways to get tokens but the ones I listed above are popular.  Not that it matters but I have not made use of these services.
    • Follow the golden rule and you should be good to go - ahem, do your own research.

Got it! Now what?

From here you can do whatever you would like with your tokens. Below are some differing perspectives on why to buy a cryptocurrency and what to do with it:

  • Store of value (SoV) - Token holders may acquire a token in order to profit from the token’s rise in value. 
    • You will often bump into the term “hodl” which is in reference to an old online post where someone drunkenly said they will “hodl” through the highs and lows.
  • Staking - this is where you lock your tokens in through a smart contract and collect a drip. This can be in the same token or in a different token. There are different reasons for staking so it isn’t always interest, perse, but it is an easy way to think of it.
    • You “deposit” (stake) your tokens and “collect interest” (claim rewards).
    • Stake “Token A”, receive “Token A” and/or “Token B” depending on the terms.
    • You will pay transaction fees to:
      • Start the smart contract
      • Send your stake
      • Claim your reward (each time)
      • Unstake your initial stake (each time in part or whole)
  • Liquidity Pool (LP) - this is where you provide 2 tokens to an exchange to increase their supply of both tokens to facilitate other people’s exchanges or swaps of tokens. By providing this liquidity you are paid out by collected fees directly proportional to the amount of the shared pool that you provided. 
    • LPs provide a token that earns a yield and gets redeemed for the tokens you initially provided.
      • Redeem for your initial tokens.
      • Add “Token A”: “Token B”
      • Receive “A-B LP”
      • “A-B LP” earns a yield from fees collected
        • Similar transaction fee frequency as staking.
  • Yield Optimizers (sometimes referred to as Vaults depending on the specific provider) - there are DeFi places that offer algorithmically optimized yield farming. Can be based on a single token or an LP token.
    • These services differ from staking in that they automatically determine the best time to claim rewards and reinvest them to make for the best possible return.
    • This is where crypto is now realizing unreal APY percentages.

This is so amazing, I can’t believe it’s risk-free

Close, but no. Actually, not close at all. Just no.

Firstly, I am not your financial advisor, your lawyer or your accountant which means you should probably speak to all 3 of them. Especially, if you have any very specific questions that relate to your very specific circumstances.

Next, there is the risk of the cryptocurrency itself. What they are worth if they will go up/down, can you buy them today, can you buy them next year, can you redeem for fiat currency in an emergency, can you redeem for fiat currency at all. These are all things I cannot answer for you. My advice here would be to only use the money you can afford to lose in whatever capacity is legally available to you. Ask your lawyer and your accountant if your question is deeper than that.

Lastly, the investment. I don’t know what you are buying and I’m certainly not going to pretend I know what will happen. No one does. Anyone who says “they know” is more than likely trying to take advantage of you. Crypto does suffer from pump ‘n’ dumps just like the stock market and some collectibles markets. Be wary and do your own research.

Thanks for reading this. If you notice errors anywhere please let me know so I can correct them, I only want to spread accurate, unbiased information. Furthermore, if you have a better way to explain something please let me know. I wrote this in an effort to get more people into crypto safely. If you enjoyed this let me know in the comments I look forward to interacting with everyone.

If you would like me to write on a specific topic - let me know!

Topics of further reading

  • Liquidity pools;
  • Yield Optimizers; 
  • Protocol technologies;
  • Non Fungible Tokens (NFTs); and 
  • Collectibles

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Just out here trying to earn a yield.


Discovering DeFi
Discovering DeFi

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