You’ve heard the buzz about Bitcoin, Ethereum, and other cryptocurrencies or crypto assets.
It doesn’t make sense to you (yet), but you want to learn more.
The problem is you don’t know where to start. I’m going to give you 5 simple steps to get going.
Why should you care?
- Opportunity: Bitcoin has had the highest return of all major asset classes in 9 out of the last 11 years. The annualized return for Bitcoin since 2011 was 223.99% while the S&P 500 saw an annualized return of 14.64% (see table below). While we know that past performance doesn’t guarantee future results, this should be enough to get curious and want to learn more about cryptocurrency as an asset in your portfolio.
- It’s the future: Unfortunately, many people never explore their curiosity with crypto. They are simply overwhelmed by all the new concepts and terminology, and they don’t know where to start. Others are skeptical about it’s long-term viability and think it’s just a fad that will go away. In my opinion, although it’s still early, we are too far along for it to go away. Crypto currency and crypto assets are here to stay. I’m not making any predictions on which cryptocurrencies are here to stay. Just as companies can come and go in the stock market, cryptocurrencies may or may not last.
Follow these steps in 2022, and I know you will learn a lot. Most importantly, you will learn enough to know if it’s an area you want to invest in.
Step 1: Get a quick overview of how Bitcoin works.
You can get visit the “How It Works” page on the Bitcoin website for a high-level overview that will only take you about five minutes to read.
Step 2: Read the original Bitcoin whitepaper.
Once you have that basic understanding of how Bitcoin works, the very next best place to go is the 9-page whitepaper that started it all.
Whitepaper Link 👉 Bitcoin: A Peer-to-Peer Electronic Cash System
Satoshi Nakamoto published this whitepaper on October 31, 2008. The paper proposed a purely peer-to-peer version of electronic cash that would allow online payments to be sent directly from one party to another without going through a financial institution.
The first Bitcoin transaction was in January of 2009, with the currency available for open purchase and trading in July of 2010.
Step 3: Read the book, “Cryptoassets” by Chris Burniske.
Now that you have a basic understanding of how Bitcoin works it’s time to dive deeper. If you enjoy learning by reading books then start with this one.
If you don’t like reading books and want to learn in bite size chunks feel free to skip this step and go to Step 4.
Step 4: Explore CoinDesk.
If I had to pick one website where you can go to learn more and keep up with the developments in the emerging crypto economy it’s CoinDesk.
CoinDesk is a website that offers news, events, data, and research on all things Crypto.
Start with the Crypto Explainer+ area of the site where you can learn more about crypto no matter what level you are at in your journey. They have crash courses and a dictionary for all the new terms you will learn.
If you are like me and like to learn while you are on the move (in the car, working out, or on a walk) don’t miss the many podcasts you can find through CoinDesk.
Step 5: Open a Coinbase account!
This is arguably the most important step because it’s the step where you will take action! You can get started with Bitcoin, Ethereum, and other cryptos without learning all the technical details.
Don’t feel like you have to have a complete understanding before you make your first investment or purchase. In my experience, the absolute best way to learn something is through hands-on experience.
There are many ways and places to invest in crypto, but my favorite is Coinbase. Coinbase was started in 2012 and their platform is easy to use. At the time of this writing Coinbase has over 73 million people and businesses buying, selling, and managing their crypto through their platform.
Once you setup an account you will need to transfer funds into the account, and you will be ready to make the first purchase. Start small. Only invest money you can afford to lose. Starting out, this should be less than 1% of your investment portfolio.
Get Started Today
I made my first purchase of Bitcoin on the Coinbase platform in 2017. It was a great decision. It’s through hands on investing and learning that I’ve built my knowledge of digital assets. You too can become a digital asset investor following these 5 simple steps.