Since I got many mails on how to buy cryptocoins and keep it save, let me try to explain it for my readers. As we all know, the value of digital crypto currencies lie in the private key associated with the wallet. Wallet is nothing but a layman's term to keep the idea simple. What we actually does is create a private key using a wallet providing company or site or exchange. Derive a public key or public address from the private key and share it with others so that they can or you yourself can transfer coins into it. Since this blog is for investors and not meant for techies, let me try to simplify it
HOW TO BUY CRYPTO COINS
In earlier days bitcoin was the synonym for crypto coins as it was the first coin or digital asset created out of blockchain technology. Crypto world named all other coins as "altcoins" or alternative coins. So ethereum, ripple, zcash and thousands of other coins avilable are grouped and can be termed as altcoins.
In the early days, all crypto coin exchanges traded bitcoins only. As and when other coins gained popularity, these exchanges (coinbase, bitstamp, poloniex and many more) started adding it to their exchange portfolio and then created pair trading as well. For example in matured exchanges, bitcoin-ethereum pair, bitcoin-zcash pairs etc are available. This means we can directly sell bitcoins we own to buy ethereum. See one of the charts I published in tradingview for ethereum bitcoin pair.
https://www.tradingview.com/chart/ETHUSD/KdFZcO3i-Short-term-breakout-in-Ethereum/
Indian cryptocoin exchanges are not yet sophisticated to provide such facilities. So if you are investor trading in Indian exchanges like zebpay or unocoin, you have to use a real currency for conversions.
How to buy Bitcoin?
In the early days, all crypto coin exchanges traded bitcoins only. As and when other coins gained popularity, these exchanges (coinbase, bitstamp, poloniex and many more) started adding it to their exchange portfolio and then created pair trading as well. For example in matured exchanges, bitcoin-ethereum pair, bitcoin-zcash pairs etc are available. This means we can directly sell bitcoins we own to buy ethereum. See one of the charts I published in tradingview for ethereum bitcoin pair.
https://www.tradingview.com/chart/ETHUSD/KdFZcO3i-Short-term-breakout-in-Ethereum/
Indian cryptocoin exchanges are not yet sophisticated to provide such facilities. So if you are investor trading in Indian exchanges like zebpay or unocoin, you have to use a real currency for conversions.
How to buy Bitcoin?
For resident Indians below are the options available
1. Via Indian exchanges :- zebpay/unocoin etc
2. Via localbitcoins.com site, where we can directly buy and sell from other investors or traders. localbitcoins.com is just a facilitator like olx. I have persoanlly used this site for few buys and its 100% rieliable as per my experience.
For NRIs
1. If you are based out of USA or Europe, try coinbase or poloniex.
2. Via localbitcoins.com
How to buy Ethereum
For resident Indians,
1. There is only one option available as of now- www.ethexindia.com
2. Zebpay is expected to bring ethereum into their mobile platform very soon.
For NRIs
1. If you are based out of USA or Europe, try coinbase or poloniex.
2. If you don't have any other means, mail me @ indianhiddengems@gmail.com, I would be able to help you.
WHAT HAPPENS WHEN YOU OPEN AN ACCOUNT IN AN EXCHANGE?
Opening an account with any exchange technically means a wallet creation or private-public key creation. Here the private key will be stored in the servers of exchanges and we don't get access to it. Exchange will share the public key which we can use for receiving coins from anywhere else.
A sample bitcoin public key:
A sample bitcoin public key:
1GuCirTiPWP9n6v6dnsdAvFqi3iw4wnFwT
A sample bitcoin private key:
5Kb8kLf9zgWQnogidDA76MzPL6TsZZY36hWXMssSzNydYXYB9KF
Public key is sharable to anyone since it can be only used to receive coins. But for sending coins out we require private key. In exchanges, private key is held by them and there is always a possibility of hack which may result in wealth destruction. You can read about some of the biggest hacks happened in exchanges here.
Public key is sharable to anyone since it can be only used to receive coins. But for sending coins out we require private key. In exchanges, private key is held by them and there is always a possibility of hack which may result in wealth destruction. You can read about some of the biggest hacks happened in exchanges here.
HOW TO STORE ETHEREUM AND BITCOIN
The best way to keep cryptocoins safe is by creating paper wallets, provided it is not robbed by a techie who knows the treasure in it!!. Below are the typical steps involved
1. Create your Wallet
For bitcoin use: https://bitcoinpaperwallet.com/
For Ethereum use : https://www.myetherwallet.com/ (I personally use this as I hold ethereum)
2. Write down your private key to a paper, take few copies it and keep them safely in your bank locker or any other safe place. Always inform this to your dear ones as a backup.
3. You can also download a JSON file, which is an alternative for private key. So instead of typing private key , we can upload the file and send coins from our wallets.
There are so many options available in market for storing coins. I don't want to confuse my readers. But to suggest an alternative, you can use hardware wallets like trezor for saving coins.
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