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Cryptocurrency

How to Buy Your First Cryptocurrency Coins (Ethereum, Bitcoin, Litecoin, and Ripple)

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Here’s a basic guide and recommendations for where to safely buy digital currencies like Ethereum.

CREDIT: Shutterstock

Cryptocurrency (digital currency) is taking off this year. New millionaires are being made almost daily as Ethereum, Bitcoin, Litecoin, Ripple, Stratis, and other cryptocurrencies reach all-time highs. It is becoming somewhat of a modern-day gold rush.

As I write this, Bitcoin’s “market cap” is $37 billion, with a value of $2,281 per Bitcoin. For a coin that was once worth only pennies, Bitcoin investors have made serious money in the past few years.

Bitcoin might be the oldest, but it’s not the only cryptocurrency on the block. In fact, the majority of people getting into cryptocurrency are flocking to Ethereum. Ethereum has had the most impressive gains this year after recently being the first cryptocurrency to be backed by major corporations such as Microsoft, Samsung, JPMorgan Chase, and others in what’s being called the Enterprise Ethereum Alliance. Ethereum does for code and programming what Bitcoin did for financial transactions. For simplicity’s sake, think of Ethereum like a more advanced and sophisticated Bitcoin backed and utilized by major corporations because of its technological advances and clear pathway to building a decentralized internet.

One Ether (Ethereum’s crypto token) was worth as little as $12 earlier this year, but the cryptocurrency is now worth $228 per coin with a total market cap of $21 billion. Ethereum is slowly but surely making gains on Bitcoin’s market cap. Many spectators believe that “the flippening” will happen sometime this year, in which Ethereum becomes the most valuable (market cap) cryptocurrency in the world, overtaking Bitcoin in total value (total number of coins times price per coin).

Ethereum isn’t the only new coin on the block, but it is definitely the most promising. Others to watch that I will explain and write about in future articles include Ripple, Litecoin, Statis, and Siacoin. All these coins have something unique and technologically innovative about them.

How to Buy Your First Cryptocurrency Coin

Buying cryptocurrency is confusing for a lot of people. It’s not a stock or a typical “investment.” It’s not like anything most people have ever seen or experienced. You don’t get shares; instead you get digital coins or tokens. The coins are “better” than a paper dollar bill because they actually support a greater cause, as in Ethereum’s case, to build a decentralized internet and host code and apps on a decentralized platform. And coins help “fuel” that cause, so to speak, without getting technical.

For most people in the U.S., Coinbase would be the easiest option to buy Ethereum, Bitcoin, or Litecoin (it doesn’t support any others yet). After verifying your account, you can add a number of payment methods including credit or debit cards, U.S. bank accounts, or even wire transfers of funds. Other options for exchanges that will take U.S. dollars for coins are Kraken, and Gemini in the U.S. Typically you will need to verify your account with a driver’s license and add other details to expand your buy limits. Since cryptocurrencies are “hard currencies,” the exchanges don’t want to risk getting ripped off, since you can’t reverse a cryptocurrency transaction once it’s done.

If you are looking for some of the newer coins that are making big movement but haven’t made their way to the aforementioned exchange sites, you can look into Poloniex or Livecoin. You can transfer Bitcoin or Ethereum to these platforms from Coinbase and then exchange it for any other digital currency that you want.

If you are outside the U.S., here are a few options for exchanges that take your local currency: BTC Markets (Australia), Bitthumb or Coinone (Korea), CHBTC or Huobi (China), and QuadrigaCX (Canada.) You can find a full list on this page of where to buy Ethereum for your local currency.

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The Rise and rise of Bitcoin

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The Rise and rise of Bitcoin

The story behind the world’s newest and potentially most powerful currency.

When he discovered the crypto-currency in 2011, it opened up an uncharted world of new possibilities for him to explore.

“It’s fascinating to imagine what it means to have global decentralised money,” he says.

In this two-part documentary, we go inside the complex world of Bitcoin to explore the social and political impact of an open-source digital currency and ask if it could create a monetary paradigm shift that will forever change the world.

What is Bitcoin and who invented it?

Bitcoin, much like the internet in 1994, is not easily explained or understood. Its advocates compare the technical innovation with that of the World Wide Web. But while the internet changed the way people communicate, Bitcoin changes the way people view and use money.

My concern is how the governments will react. They can’t kill or stop Bitcoin, but they could impede it and they could get in the way of its development.

Erik Voorhees, Bitcoin entrepreneur

Bitcoin was created to provide an alternative to the banking system. It is an open accounting system that allows thousands of computers from around the world to track ownership of digital tokens – the Bitcoin – as part of a purchase transaction.

All transactions are visible to Bitcoin users and, once verified, are logged in a public ledger called the “blockchain”. The “blockchain” records every Bitcoin transaction since the launch of the system and every user has a copy of the transactions.

This is the primary difference between Bitcoin and the current finance banking system. While physical currency is issued through a central authoritative agency, Bitcoin is a peer-to-peer system.

Bitcoins are awarded to “miners” – computers specialised in processing and verifying Bitcoin transactions – as a reward for their work. This is how new Bitcoins are released into circulation.

Satoshi Nakamoto is the founder of Bitcoin. An online profile with a currently unconfirmed physical identity, Nakamoto first announced the development of the Bitcoin system in an online forum in late 2008. Despite his cryptic online presence, programmers and developers around the world immediately recognised the intelligence behind Nakamoto’s peer-to-peer design, and worked with him to further develop Bitcoin.

In October 2009, a first exchange rate was published, listing the value of 1,309 Bitcoins at $1. Bitcoins were cheap and throughout the following year they continued to trade for fractions of a cent.

The first known transaction with Bitcoin occurred in 2010 when a Florida resident offered 10,000 Bitcoins to anyone who would order him a pizza. One user in London agreed, making a long-distance phone call to a Papa John’s and cementing the first Bitcoin transaction in history.

Bitcoin was gaining momentum, but in order for it to thrive, the coins needed to be more widely accessible.

Tokyo-based Mt Gox was the first Bitcoin exchange on the market. By November 2010, four million Bitcoins had been mined. The exchange rate briefly spiked to 50 cents a coin. The market awoke and Bitcoin started to look as if it had real potential as a global currency.

The renegade currency

Just a month later, the Bitcoin community received the attention it was looking for, albeit in all the wrong ways. As WikiLeaks released top secret US diplomatic cables to the world, and major financial institutions proceeded to block all transactions to WikiLeaks, one news article suggested that Bitcoin would be the perfect solution to the blocked donations.

I don’t know how the government will react to Bitcoin. But I spend thousands of dollars on lawyers every day just to make sure that I’m not going to go to jail.

Charlie Shrem, CEO BitInstant

Satoshi Nakamoto slowly disappeared from all forums – and was never heard from again.

Just months later, the Silk Road anonymous market was launched. This was an online black market dealing in highly illegal substances, including drugs and other illicit goods. Silk Road dealt exclusively in Bitcoin, taking advantage of the near impossibility of tracking transactions.

The Bitcoin exchange price continued to climb. By February 2011, it reached parity with the US dollar, sparking an influx of new users and speculators.

In June 2011, after hitting $31, Bitcoin exchange dropped dramatically. The Mt Gox system was hacked, driving the price even further into the ground. As the value of Bitcoin hit the $2 mark, speculators labelled it the end of the dream.

Bitcoin today and for the future

In 2012, after months of stagnation, hacks and online theft, Bitcoin slowly climbed its way back on to exchange market boards.

By 2013, recognised websites such as Reddit and WordPress announced Bitcoin as legitimate means for transactions.

Months later, as Cyprus suffered the biggest financial crisis in its history and banks withdrew money from account holders, Bitcoin thrived. Bitcoin ATMs were set up around the island, validating Bitcoin evangelicals’ faith in the currency.

But while Bitcoin seemingly ensures users’ privacy and offers a more democratic financial alternative to conventional banking, the same privacy offers anonymity to illegal activity – such as the Silk Road market.

Regulators at the US Treasury have been wary about the possible dangers of Bitcoin, including possible funding of armed groups and money laundering – claims that are countered by many in the Bitcoin community and considered a means to control and suffocate the currency.

So, will Bitcoin weather the storm or fall victim to the “system”?

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