Get started with crypto securely.
Please note:
This guide is a work-in-progress (intermediate level is incomplete, advanced levels are completely missing).
It is written in a tongue-in-cheek style.
From zero to infinity
Whether you are an aspiring, intermediate or advanced crypto investor, I've got you covered:
- Crypto curious (€ 0 - € 1000)
- Prudent crypto investor (€ 1000 - € 10.000)
- Crypto enthusiast (€ 10.000 - € 100.000)
- Crypto degen (€ 100.000 - € 1.000.000)
- Crypto whale (€ 1.000.000 - ∞)
- Crypto institution (please for all that is holy, seek professional help)
Pick your poison: beginner, intermediate, advanced or super-duper advanced level 👇
Beginner
You probably heard of Bitcoin, perhaps of another cryptocurrency. Something, something number only goes up. You want to "make money". Welcome to the club!
For all that is holy, do not just Google "buy bitcoin" and click the first search result you get. Those are all sponsored clickbait advertisements, and chances are not zero that you will be scammed out of your money before you even get started.
Step 1: Open an account with a reputable exchange
Whether a cryptocurrency exchange is reputable totally depends on which jurisdiction you are in. However you are probably safe with one of these exchanges. If you want to be 100% sure you are dealing with a genuinely licensed exchange, please consult with your country's financial sector supervisor - they all have a website listing licensed exchanges).
Please note that you will definitely need to identify yourself due to anti-money laundering requirements.
Step 2: Enable ALL the security features available
You do not want to lose your money to cyber criminals, neither does your favourite exchange. Enable all the security settings they offer, and you are set:
- Choose a strong passwordphrase (as long as possible, please use a password manager)
- Enable two-factor authentication and/or passkeys
- Write down recovery code(s)
- Enable time-lock
- Embrace withdrawal confirmations and notifications
Exchanges have security controls (incl. anti-fraud measures) that make your typical bank blush.
Step 3: Fund your account
Time to part with your hard-earned money! Send it from your bank account to your favourite exchange. Most exchanges provide a multitude of options to fund your fiat account: wire transfer, direct debit, credit card, ...
Step 4: Beware of crypto scams 🚨
- If a cryptocurrency (or "coin") is popular on social media (besides the top coins by market cap size, but even then... looking at you XRP), you should most probably stay away (unless you are looking to part with your money fast).
- If you get direct messages on social media mentioning any cryptocurrency whatsoever, even BTC, ETH, ... it is 100% a scam. No you did not receive a random airdrop worth $15,000, no you did not win €1,000 in the crypto lottery, no, no, NO!
- Same with YouTube and Telegram: if influencer or insider X is shilling whatever coin or token, get out.
- Same with (often invite-only) Telegram groups promising whatever alpha or sick gainzzz. They are all a sham, unless you really-really-really-really-really-really know what you are doing. But if you are reading this, then you don't.
- If it seems too good to be true, it most certainly is.
Step 5: Enjoy trading cryptocurrencies
Enjoy losing making money, and never sleeping well again while you are at it (crypto is a wild ride, but that is entirely your choice).
Inb4 someone reacts with "but what about my favourite wallet?".
Gold star ⭐ for you. Please continue to the intermediate level 👇
Intermediate level
"With great power comes great responsibility." Think twice about whether you really want self-custody over your crypto funds. No one is so crazy as to manage their own monetary wealth in cash in a physical vault at home (and thus not to rely on a bank). So why would you do so with your crypto assets? Think carefully before you proceed, because if you fuck up, there is literally no one to help you, no helpdesk to cry to.
A moment of introspection
Yee-haw, you made it past 'crypto curious' phase. Perhaps even well past the 'prudent crypto investor' (that really is a contradictio in terminis, but I digress). The next steps are not really tied to the amount of cryptocurrencies you have invested in, but more on where you are on your journey and how far you are willing to take it. If you are happy in the secured walled garden of your crypto exchange, please by all means, stay. It might be against the "crypto ethos", but who gives a shit. Your funds are safe and centralized crypto exchanges are here to stay anyway. Don't worry and be happy.
Options, options everywhere
So perhaps you really fancy cryptocurrencies (or coins or tokens, you heard about tokens by now, haven't you?). Perhaps you are past the "play money" phase and have invested or acquired a nice sum of $ / € / £ / ¥ / ₹ / ... Perhaps you wonder what these tokens are all about, besides trading speculation, like what are they even good for (spoiler alert: if you invested in memecoins, you are gonna have a bad time). Perhaps you heard about web3, blockchain, decentralization, ... Whatever the reason, it is time to turn your crypto game up a notch.
Step 1: Invest in a hardware crypto wallet
Move the largest part of your crypto funds to a hardware wallet. "Not your keys, not your crypto" is quite the lame slogan, but it is the truth and a genuine warning. If your exchange goes bankrupt (just like your bank, but then worse - google "FTX"), you can say goodbye to your hard earned monies. So, buy a hardware wallet, it might prove one of your most sensible crypto investments ever.
Reputable hardware wallet vendors:
Practical tips:
- More expensive is not better. Whatever type of hardware wallet you buy from these vendors, they are fine.
- Buy two hardware wallets, so you have a back-up. Store them separately, in different locations. So when your place burns down, you do not lose both.
- Store your (wallet recovery) seed phrase in a safe (i.e. locked, waterproof, fireproof, tamperproof) location. If you write it down on paper, put it in a sealed envelope.
- Never in any way, digitize your seed phrase (unless you know what you are doing: e.g. keeping it on a truly isolated device). Do not take a screenshot of it with your phone or webcam on your laptop. Just don't (really).
Step 2: Segment your crypto across wallets
Great, you bought a hardware wallet for long-term storage ("cold storage"). Make sure you manage it accordingly. Use the wallet for one-way traffic only, i.e. to accumulate funds. Don't go trading or buying NFTs with this wallet, use it only to store crypto.
Allocate funds in wallets according to their use-case: long-term holding (HODL darling), trading, experimentation, ...
Which wallet to use? The crypto wallet landscape is still pretty fragmented, so I recommend to rely on providers that historically have a great track record with security (I personally wouldn't rely on exotic wallet providers, but that is my wallet risk appetite...).
- Metamask
- Kraken
- Coinbase
- Ready
- ...
Step 3: I need to work on this part.
Multisig? How to properly store seedphrases?
Advanced
I also need to work on this part.
Super-duper advanced
Yeah, also on this part. I'm such a lazy slacker (j/k).
BIG FAT DISCLAIMER
Crypto is great and terrible at the same time
Crypto is wild, crypto is fun, crypto is addictive, crypto has the greatest memes, and crypto might even make you money (supposedly). But cryptocurrencies are also terribly risk-on assets, which means you can lose all of your invested money, despite all of the claims otherwise.
Let me repeat that again.
'You can lose all of your invested money.'
'YOU CAN LOSE ALL OF YOUR INVESTED MONEY.'
Nobody knows if the price of Bitcoin, Ethereum, ... will keep appreciating over time. Nobody knows when the next bust in the financial markets will arrive. Nobody knows when the next world war will break out. Nobody has that crystal ball. If someone claims certainty over the future (especially in crypto), they are full of shit.
So, tread carefully because: "Virtual currency, real risks. The only guarantee in crypto is risk."
More on what is wrong with crypto
If you are interested in knowing more about all that is wrong with crypto, subscribe to "Web3 Is Going Just Great ...and is definitely not an enormous grift that's pouring lighter fluid on our already smoldering planet." Created by Molly White. Subscribe to her newsletter for weekly recaps.
