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Crypto FAQ

Getting into crypto can be overwhelming and this is why we put together a collection of FAQs about crypto.

How to buy crypto:

The act of going from FIAT to crypto is called onramping. Not all onramping processes are the same and depending on which method, fees, KYC and flexibility varies. Some services do not allow withdrawing (such as Paypal or Mogo) and confines your crypto within a fenced area (You do not really own the coins, just an IOU which may not be honored if they go under). 

Here's a list of top ways to enter crypto 

  • Peer to peer
  • Crypto ATM
  • Over the Counter exchanges
  • Coinbase (with credit card)
  • Binance (with credit card) 
  • PayPal/Mogo (You DO NOT hold on to them and cannot withdraw the crypto)

It is also important to have your wallet to begin with (see point below) before buying any crypto. 

Which wallet should I use?

Choosing a crypto wallet opens the door to more crypto activity. As you're starting out, your first wallet should be a general wallet that can store Bitcoin, Ethereum, Tether and a few other major coins. Wallets are split into the following categories, mobile wallet, browser wallet and hardware wallet. 

While there are many wallets to choose from, sometimes the best ones out there are the ones that have been around for a while and have been proven true:   

  • Coinbase
  • Blockchain.info
  • Trustwallet
  • Exodus

Later on, you can look into Ethereum wallet which can store coins running on the Ethereum network.

Which coins should I buy? How often should I buy?

(NOT FINANCIAL ADVICE- CONSULT AN INVESTMENT ADVISOR FOR PROFESSIONAL ADVICE)

Start with Bitcoin and ETH.

Refrain from any other coins until you have a feel of how crypto works. While it may be tempting to get coins like XRP, BCC, UNI or other lesser known coins, most coins come and go fast (see next section). Unless you have a good grasp of how the crypto space works, the safest coin to start off is Bitcoin. 

Get a feel of the crypto space before jumping into other coins. When you are ready, use websites like Coingecko, Coinmarketcap and Live Coin Watch to see the top 10-20 coins and do as much research on them before buying any. 

Only put in what you can afford to lose. As crypto is volatile there's no knowing if it will go up or down a year from now. Some people in the crypto space buy a set amount (eg. $200) every month and stick to it regardless of the price going up or down. This is called Dollar Cost Averaging and what could be a loss could become a gain over time. This website has a calculator that shows how dollar costing averaging would have done if you had invested in different time. 

What are Alt coins? Which Alt coins should I get?

In the crypto space, coins are ranked by their market cap (Total value). The top 5 coins are generally known as large cap coins. Some call these 'blue chip coins' as they have been around for a while and are more established with large user base and developer community. 

From 5-20 position, these coins are mid cap coins. These coins are contenders for the top spot and have active teams and application. They have more potential to outgrow Bitcoin but they also have the potential to fail as they're not as developed as the large cap coins.  

From 20+, you have small cap coins where some may regard them as 'shit coins'. While the thought of getting in a coin that can go 10X or 100X is exciting, history has shown that coins are more likely to go to 0 over time and many predicts that 99% of coins will go to zero in 5 years. 

Overall, one should do extensive research before getting into alt coins and many seasoned crypto users tend to keep 50+% in Bitcoin and ETH and budget what they can afford to lose into mid cap and small cap coins. If uncertain, best to stick with Bitcoin.  

How do I take profit? When should I take profit?
When your crypto has made significant gains, it may be a good time to take profit. The most common way to take profit is to convert your Bitcoin to a stable coin like USDT, USDC or DAI. These coins are pegged 1 to 1 to the USD. Unlike converting to FIAT, you do not have to worry about major exchange fees (eg. 5-20%) or finding a buyer or going to an ATM.
As for when to take profit, it is up to you. Most people have set goals to take profits while they're ahead (eg. every 2X, take 50% or take 1% profit every month above average buy price). While they may not be able to maximize their gains, there's no knowing when you'll be at the peak. It is much better than riding all the way to the top and back to the bottom again.
BE AWARE THAT TAKING PROFIT IS A TAXABLE EVENT. CONSULT A CPA or TAX ADVISOR FOR MORE INFO.

 

Which Crypto to Crypto exchanges should I use?

Transaction volume, user base and fees are some of the biggest selection factors you want to look into as you decide an exchange. Currently the most recommended exchange is Binance and Coinbase exchange. If you're in Europe, you also have Kraken. 

While it is convenient to leave your crypto on an exchange, it is never a good idea to do so as crypto to crypto exchanges can get hacked or exitscam at any time. Unlike banks and regulated exchanges, there's no safety net and no guarantee of refunds or protection from the government (The price for being your own bank).

How to set up your crypto wallet system

Most crypto users use a 2 tiers wallet system to ensure security in the crypto space. For everyday transactions, they have a 'hot wallet'. This is usually the wallet on their mobile device and they keep a small amount. And from this wallet, they interact with exchanges and ATMs and peer to peer. For long term storage and holding (or HODLing), they use a cold wallet where it only interacts with your hot wallet. Cold wallets are usually hardware devices or a paper wallet that is kept well hidden. Think of this as your personal bank account, you do not show it to anyone but yourself. 

You can also add in one more tier (medium wallet) to give yourself an added layer of protection. Just like how you may keep money at home to save yourself from a trip to the bank and at the same time not carry hundreds of dollar on you all the time. 

 When to get a hardware wallet?

Getting a hardware wallet adds an extra layer of security to your crypto. Unlike your phone wallet which is vulnerable in the event of a sim swap attack, a hardware wallet cannot move any crypto out unless the hardware device is compromised. 

How to ensure privacy and safety?

The biggest drawback to becoming your own bank is you will have to do all the safety measures yourself. However there are some best practices:

  • Use a separate email for crypto websites
  • Use a VPN when browsing crypto websites
  • Do not store your crypto on an exchange for long term
  • Use a hardware wallet
  • Do not do crypto using public wifi
  • Your crypto phone should not have a lot of unnecessary apps
  • Use a different password for each service
  • Use 2 factor authentication for logins
  • Each time you do a KYC increases your risk of identity theft. (Eg. service gets hacked and your KYC info gets leaked)
  • NEVER SHOW YOR PRIVATE KEYS or PASSPHRASE

Any more information for beginners

Our quickstart guide is a useful resource for anyone starting out in the crypto space.

How to stay up to date in the crypto space?

It is important to keep yourself up to date with what's happening in the crypto space. Popular news sites include: