Disclaimer: As with any “financial advice”, please be very careful. If you do not feel comfortable at any point then, please don’t follow my suggestions below – or feel free to ask questions. I’ve provided the below based on my experience of what works, and what is simple to the average Joe wanting to learn more. If you are careless and make mistakes, it might cost you money. As always, I cannot be held liable for any loss you may incur.
What are they, the “coins”, anyway?
There are a number of so-called “Crypto-currencies” but by far the most popular one is “Bitcoin”. Rapidly following is another innovator called “Ethereum”. At the time of writing, there were over 550 crypto-currencies with a collective market value (ie. real US Dollar value) of $37 616 362 478. That is 37 Billion US Dollars.
So, what are they exactly?
So, we hopefully all know that since the gold standard was phased out, all currencies are basically nothing more than a reflection of confidence in whoever issues them. Thus, the USD is a reflection of confidence in the US Reserve and the US Economy in general. This is why currencies change in value compared to other currencies as the market changes its perceptions of confidence.
In very simple terms, crypto-currencies are digital currencies that are backed by an un-hackable public ledger called a “blockchain”. The confidence in the blockchain is so great that the currencies have gained tremendously in value since they emerged in 2009.
Why would I buy some?
There are different reasons for different people. My reasons were that I learn by doing. I want to learn more about Bitcoin and Ethereum and crypto-currencies in general, so investing in them was at very least investing in my education about them.
Beyond that, there are some potential financial upsides, but these are all dependent on the performance of the cryptocurrencies relative to the fiat currencies that are relevant to you. In my case, I am used to earning about 8% per annum on investments in my country. So far, with my portfolio of crypto-currencies, they have appreciated in value by nearly 80% in just two months. That being said, there have been times since 2009 when a great deal of value has been lost.
Who do I buy from?
After testing (and buying through) over 10 “exchanges”, I now use Changelly because of the following:
- I do not have to give them my ID, a blood sample and a DNA swab
- You can purchase in less than a minute from arriving at the site
- You can use a credit card to purchase – by far the easiest way to dip your toe the water in
- Their fees are the lowest I have found, and the most transparent
However, to use Changelly, you must already have a wallet set up.
Note: Changelly uses UK-based Inda Coin to process the credit card payments.
A wallet? What is it? How do I get one?
Nearly every site you visit will go to great pains to emphasise the security of your wallet and to warn that if you lose it, you lose your money – just like a real wallet. You can go down the rabbit hole of hardware wallets and cloud wallets but it gets awefully complicated.
I want to make this simple for you, and make a recommendation based on months of research and trial and error on my part:
It runs on your own computer and generates wallets that you can backup safely.
Exodus is an application that you install on your own computer. It supports a set of the most popular crypto-currencies including Bitcoin and Ethereum. I use Exodus because it provides a good balance between security (keeping your wallet away from hackers) and convenience.
Exodus is free, open source and has a great support community. It is also beautifully designed! Because it is open source, we have a high degree of confidence that it is secure.
So, download and install Exodus.
Right, now I want to buy some!
Let’s say you want to buy Ethereum. I’m more excited about Ethereum than Bitcoin these days.
In Exodus, click “Wallet”, click “Receive” and copy the wallet address which will look something like “0x705fB243Cd2CddA5ffD62C702fBE2d48353E3Bdf”.
Go to Changelly and:
- In “YOU HAVE”, enter the amount you want to spend buying coins and select USD or EUR from the drown-down. Depending on your location, you may only be able to choose EUR.
- In “YOU GET”, select from the drop down the coin you want to buy, in this case, ETH for Ethereum.
- Click “Exchange!”, confirm the details and click “Next”
- In “ETH ADRESS”, enter the address of your wallet from above and click “Next”
- On the confirmation page, check that your wallet address is correct and click “Confirm & Make Payment”
- Click “Pay with Visa/Mastercard”, select your country and enter your cell number. Your phone number must work! You are going to receive a call. Click “Next”.
- You will be given an exchange rate based on Bitcoin prices. Click “Continue”
- Enter your credit card details and click “Pay xx.00 CUR”
- You’ll be transferred to your card provider’s 3D Secure page. Enter your 3D Secure details and click “Submit”
- You will be asked to enter the number that you received during the phone call, and then the confirmation number in the transaction confirmation from your Credit Card provider. Usually, this will have been included in the SMS confirmation on your mobile phone of the payment or can be fetched from the credit card statement in your Internet Banking.
- On the next page, you can increase the speed of the payment processing by providing some verification via your webcam. This might sound weird but it increasingly the sort of thing we will be doing in the future.
- If you want to do that, Click “Record”, show them your face, show them the FRONT of your credit card so they can confirm the details, and show them some form of ID. Click “Stop”, and if you’re happy with the video, click “SEND”. If you are not comfortable doing this, don’t do it.
- At the top of the page, you are now on (with an indacoin.com URL), you will see “Status” and “Verifying”. Make a note of the indacoin.com URL in case you want to refer to it later.
- You can refresh that page until you see “Status” and “The funds have been sent”
- You can close the indacoin.com payment page and return to the Changelly page, where you will see statuses “Waiting for payment”, “Exchanging” and “Sending to your wallet”.
- “Waiting for payment” can take over an hour depending on the currency you choose, but for ETH it is usually 10 minutes or so. The other two steps take a few minutes each, and when the coins are deposited into Exodus you will hear the sound of coins clinking! Hooray! It’s over!
Now what do I do with them?
Well, in Exodus, you can now use “Send” from one of your wallets to send currency to the wallet address of another person or service – for whatever reason.
So, say, you wanted to thank me for this article, and you wanted to pop me $5 for it, you would:
- In Exodus, click “Wallet”, choose the currency you want to pay with, click “Send”
- Then enter my wallet address in the “TO” field, and enter an amount, like 0.33, so that it approximates the US dollar amount you want to send me
- Then click “Send”, confirm the details and click “Send”!
- You’ll hear a WHOOSH sound as your money leaves your life and heads toward mine! 🙂 Click “OK” on confirmation that the payment was successful.
- That’s it! You’ve given me a spot of thanks for my efforts above, and I appreciate it.
- You can do exactly the same when paying anyone else.
Here are my wallet addresses if you do want to say thanks as a try out. If you do, please leave a comment or drop me an email so I can say thanks! Double-click the wallet address and copy:
How do I change some of one currency for another?
If you’re using Exodus, you can do it inside Exodus, but I also directly use of Shapeshift to do this.
Shapeshift has two methods of conversion: Precise and Quick.
Precise allows you to specify exactly how much currency you want to either spend or receive. So, for example, you want to buy exactly 1 Litecoin (LTC) using Ethereum (ETH).
In Shapeshift, you:
- Choose “Ether” to “Deposit” (Send), and choose “Litecoin” to “Receive”
- Click “Precise” and click “Continue”
- Enter “1” in “Receive Amount”, and the required “Send Amount” will be calculated
- Enter the Litecoin wallet address (In Exodus, “Wallet”, “Litecoin”,
“Receive”, copy the address)
- Enter the address of the Ethereum wallet that you are paying from so that any refunds can be returned to you. (In Exodus, “Wallet”, “Ethereum”,
“Receive”, copy the address)
- Click “I agree to terms”, and click “Start Transaction”
- Shapeshift will now give you 10 minutes (because of the Precise method), for you to “Send this amount” of Ethereum to a wallet address supplied by Shapeshift
- In Exodus, click “Wallet”, “Ethereum”, “Send” and enter the wallet address and the exact Ethereum amount provided by Shapeshift. Click “Send”, confirm the details and click “Send”!
- You can copy the Shapeshift URL for this transaction and make a note of it for checking the status again.
- The Shapeshift statuses are “Awaiting Deposit”, “Awaiting Exchange” and “All Done!”
- When the money had left your Exodus wallet and arrived at the Shapeshift address, “Awaiting Deposit” will be completed, then “Awaiting Exchange” will start. Once that is completed, the status will be “All Done!”.
You will now have Litecoin in your Exodus wallet!
Have a look at all the currencies and their current valuations, graphs and trading volumes at my favourite coin tracking site, Coincap.
And that’s a wrap!
Note: I could potentially benefit from an affiliate reference in the Changelly links above. I haven’t yet, but I could.