How To Buy Altcoins Quickly & Safely In 2018

How To Buy Altcoins QUIckly & Safely in 2018


More people are buying Bitcoin than ever before, which often leads people to ask  the question: Is it too late?

When Bitcoin hit its high of $19,000 recently, it dropped back down as low as $11,000 shortly after. So no, it is never too late. There will always be buying opportunities for the king Bitcoin.

How To Buy Altcoins

However, that doesn't mean we should disregard other cryptocurrencies, more commonly known as altcoins. Many coins outperformed Bitcoin in 2017, and while we can't say for sure what the best Bitcoin alternative will be in 2018 and beyond, we do want to point out that there are many gains to be had in the cryptocurrency realm. This guide is going to teach you how to buy these other altcoins and how to figure out which ones to buy!

First, let's take a look at some of the best performing altcoins in 2017 and how they compared to Bitcoin. 

As you can see, while Bitcoin achieved 14x gains over the course of 2017, many altcoins outperformed it. Look at Neo for example, which had over 500x. You can read about our little love story with NEO here.

In the rest of this article, we'll talk about how to buy altcoins and the pitfalls you may encounter along the way.

CHAPTER 1: WHAT ARE ALTCOINS EXACTLY?


What are Altcoins

Bitcoin Was First, But There Are Many Alternatives

Since Bitcoin launched in 2009, there have been many other "cryptocurrencies" launched. Some of them were mere copycats, cash-grabs, or failed projects, but many of them offered value of their own. To this day, there are thousands of cryptocurrencies (known commonly as "altcoins" or "alternative coins") in circulation. 

But, do we need that many different currencies? You ask.

Well first of all, cryptocurrency isn't the best name. The vast majority of "cryptos" on the market aren't designed to act as currencies at all. Heck, even Bitcoin isn't really very good for spending now that it has high fees and long transaction times.

Instead, the majority of altcoins act more like tokens, which have various roles, ranging from access tokens (holding them allows you to access a platform), utility tokens, reward tokens, to security tokens. While you definitely should familiarize yourself with the different types and purposes of tokens, right now isn't the time to dig deeper. 

  • Utility Tokens
  • Currency Tokens
  • Asset Tokens
  • Equity Tokens
  • Reward Tokens

For now, just understand that when you buy an altcoin, you're not necessarily buying a form of currency. Many people have made comparisons to traditional shares and equities, and while that can help people visualize cryptos a bit more clearly, when you buy a share, you're buying a piece of a company. That's not the case with an altcoin.

Why Are There So Many Altcoins Anyway?

The answer to this one is a bit more simple. In the years since Bitcoin has gained popularity, there have been a lot of new startups and blockchain-related companies looking to raise funds to start their own projects in the crypto space.

A popular way to raise these funds is via an ICO (a story for another time). In order to reward their investors, many of these companies will issue a token. Usually, the token will also allow them to access the product or service that the company offers.

So when you buy an altcoin, you could be doing it for one of two reasons:

  • 1
    To get access to the platform/service/app that the company created
  • 2
    Because you feel that as the company grows, the price of the token will go up, much like Bitcoin.

The vast majority of crypto investors buy altcoins for the second reason, but as the market matures and some of these companies achieve mass adoption, more and more people will use the tokens for what they're designed for (to access the company's product). When this happens, prices will explode even more.

  • check
    Ethereum, Litecoin, Neo, and Ripple are good examples of Altcoins.
  • check
    Some altcoins try to do what Bitcoin does, but better (such as Litecoin).
  • check
    Other altcoins are protocol layers, or platforms, like Neo and Ethereum.
  • check
    Many altcoins are dApps (decentralized Apps) with a special purpose, such as Filecoin, a decentralized file storage platform.

Note: Not every altcoin is a worthwhile investment. Many of them are outright scams. That said, a lot of them could be a future Google or Amazon, which is why we're so excited about the ability to jump on them very early. The true art of being a cryptocurrency investor (or speculator) is learning how to tell which projects have real value, or at least strong potential value for the future, and which ones are likely to just go to zero and result in a loss of funds.  

 CHAPTER 2: HOW AND WHERE TO BUY ALTCOINS WITH "REAL MONEY"


How to exchange your first altcoin

First Buy Bitcoin Or Ethereum

Due to the fact that most altcoins are relatively new, the only place to buy them is on an exchange that deals with cryptocurrency pairings only. In other words, you need to first buy some Bitcoin or Ethereum with your local currency, and use that to exchange for another altcoin.

Currently, you can only buy the following cryptos with FIAT (real money):

  • Bitcoin
  • Ethereum
  • Litecoin, Neo, & Bitcoin Cash in some exchanges only

For everything else, you'll need to trade them with BTC or ETH first. Over time this may change, but for now, consider Bitcoin the gateway into cryptoland.

How to determine which altcoin to buy

'UNDER THE RADAR' ALTCOINS

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There are a few steps required to buying an altcoin then, which we'll walk you through now:

The first part of this walkthrough covers buying some Bitcoin, and sending it to your exchange of choice. We'll outline the steps and then show screenshots below.

  • 1
    First buy Bitcoin at Coinbase.com or another Exchange that lets you use FIAT. Bitpanda and Kraken are good too, but most people use Coinbase.
  • 2
    Next, figure out which exchange your altcoin is trading on. The best exchanges are Binance, Kucoin, and Hitbtc (Bittrex is good too, but it currently doesn't accept new signups). To find out which exchange has your altcoin of choice, go to Coinmarketcap.com, search for the coin you want, and then click "markets" to see which exchanges have it. Note: Signing up for exchanges sometimes takes a bit of time, but is relatively straightforward.
  • 3
    Send your bitcoin to that exchange. Each exchange is slightly different, so were going to through a mini-walkthrough below, using Coinbase and Binance as an example.

In the image below, we can see a screenshot of the "Deposits and withdrawals" tab in Binance. Navigate to BTC/Bitcoin, and click on the Deposit button. This will show you your Bitcoin address. Make sure you are clicking Bitcoin and not one of the variants like Bitcoin Cash.

Next, go to Coinbase and use the "send" function to send your Bitcoin to your Binance address. After that, we wait for it to arrive. Depending on how busy Coinbase and Binance are at the time, this could take minutes, or hours. 

But this is much quicker than wiring money from one exchange to another with fiat 🙂

Next up, we'll need to convert that Bitcoin to our altcoin of choice. It might take a bit of time for the Bitcoin (BTC) to arrive in your exchange. This is because the network is busy, and exchanges are a bit slow as well. Don't panic if nothing happens immediately. Once your BTC arrives, here are the steps:

  • 1
    Find the currency you want to buy with your Bitcoin. On Binance you search in "BTC Markets" (see video below).
  • 2
    Choose how much you want to buy. We recommend you just buy a tiny amount the first time, to familiarize yourself.
  • 3
    Choose the price. In most cases, when buying a coin, you want to choose "Ask" and "Limit-buy" and opposed to "Bid" or "Market-buy". Ask just means you'll pay the lowest price that a seller is asking for, and limit-buy means you won't pay more than that. If you choose market buy, and you're doing a large order, you could end up paying more than you wanted to, especially if the price is moving up quickly at the time.
  • 4
    Confirm the purchase.
  • 5
    Depending how large an order you're making, and whether the prices stay where they were when you hit confirm, your order should fill immediately, but may take a little bit of time to complete. If you're only buying a small amount, it should happen almost instantly.
  • 6
    To keep track of your order, you can go to "Open orders" or "Filled orders".
  • 7
    To view your altcoins, you can go to "Orders and balances" or "Wallets" depending on which exchange you're using.
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    There are many different exchanges, but you want to focus on the largest ones, as they have the most volume. Without volume, you might not be able to complete your purchases in a timely fashion, which could end up costing you.
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    We recommend Binance, Kucoin, Hitbtc and Bittrex (when they open for new signups.)
  • check
    These exchanges pair altcoins with BTC, ETH and sometimes NEO, but BTC has the vast majority of trades, which means you'll get better volume.
  • check
    When you place your first order, place a small trade first, just to make sure you understand the process.

Note: Many exchanges will prompt you to set up 2-Factor authentication to keep your account secure. We recommend doing this. If you do, make sure you backup your 2FA key, because if your phone gets lost, you may lose access to the accounts without a backup key, or at that very least you'll have to wait a while for the exchange to verify you and remove 2FA.

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CHAPTER 3: KEEPING YOUR COINS SAFE


How to protect your altcoins

Why You Might Need A Crypto Wallet

If you plan to hold a large amount of altcoins (or BTC for that matter), you probably want to get it off an exchange relatively quickly. For the most part exchanges are safe, but if you've heard about what happened with the infamous Mt.Gox, or DAO hack, or other questionable hacks over the years, then you'd be better off investing in a hardware wallet, or at the very least a desktop version.

We recommend Ledger Nano S, and have written an in-depth review and tutorial here. You may prefer to keep use a desktop wallet though, and if you only have a small quantity of coins worth a few hundred dollars, then a desktop or browser-based wallet is fine.

Anything more than that, and you're running a risk whether your coins are on an exchange or not. Hardware wallets like the aforementioned Ledger Nano S are the most secure, end of story.

For the sake of convenience though, we'll show you how to store your altcoins in a variety of wallets. We'll cover:

  • Jaxx - A desktop wallet for Bitcoin, Ethereum, and ERC-20 Tokens
  • Neon - A Neo wallet for NEO and NEP-5 tokens
  • Ledger Nano S - A hardware wallet for Bitcoin, Ethereum, ERC-20 AND Neo tokens
  • MyEtherWallet - A browser wallet for Ethereum and ERC-20 Tokens.

Different Token Types

Not every cryptocurrency is built the same way, and uses on the same blockchain. The most common types are Bitcoin, Ethereum, and ERC-20 Tokens. ERC-20 tokens are basically any token that uses the Ethereum blockchain.

Because of the different formats of token, you can't store them all in the same wallet. It's not really as complicated as it sounds, and you'll get the hang of it soon enough. If you're not sure about a particular token, then you'll definitely find something on Google or Youtube as a walkthrough.

MyEtherWallet Walkthrough:
  • 1
    Visit https://myetherwallet.com, choose a password, and click "Create new wallet".
  • 2
    Make a note of your password, and download the Keyfile (this is how you'll access your wallet in future). 
  • 3
    Once you're in your wallet, you'll see your Ethereum address here:
  • 4
    You can send Ethereum or any ERC-20 tokens to this address.
  • 5
    Ethereum will show up automatically once it arrives, but to view ERC-20 tokens you need to click the "view tokens" in the bottom right area.
Jaxx Wallet Walkthrough:
  • 1
    To use Jaxx, first visit https://jaxx.io and download the wallet. 
  • 2
    Follow the prompts to setup and install your wallet.
  • 3
    Once you're in your wallet, you'll see your Ethereum address, Bitcoin address, and any other supported coin addresses. Click the "wallets" tab to see other supported coins.
  • 4
    You can actually send any ERC-20 tokens to your Ethereum address, but unlike MyEtherWallet, there is no way to view them on Jaxx. You'll need to import your Jaxx wallet to MyEtherWallet to view and interact with them at a later date.
NEON (NEO Wallet) Walkthrough:
  • 1
    To use Neon, which is the Neo wallet first visit http://neonwallet.com and download the wallet. 
  • 2
    Follow the prompts to setup and install your wallet.
  • 3
    Once you're in your wallet, you'll see your Neo address. You can use this address to send Neo, Gas, and any other NEP-5 (the Neo version of ERC-20) tokens to your Neon wallet.
  • 4
    Just like Jaxx, you can't view or interact with your Nep-5 tokens in Neon, even though you can store them there. To interact with them, you'll need to use https://neotracker.io. 
Ledger Nano S Hardware Wallet Walkthrough:

CHAPTER 4: WHICH ALTCOINS TO BUY


Which altcoin should I buy?

Best Altcoins To Buy

There are so many coins and so many opportunities, you might be wondering how and where to get started.

You're not alone. Having so many choices can make a lot of beginners end up making NO choices, because they end up doing so much analysis that they never jump in.

Now, you certainly do want to do your own research (DYOR) before making any decision, but don't let yourself become paralysed by your inability to make a decision.

You're not going to become perfect at this until you practice, so get some skin the game first. Just invest $100 here or $500 there (as long as you don't invest more than you can afford to lose). Once you get more competent and you start making better decisions, and earning more profits, you can consider putting bigger amounts in.

Now, when it comes to what the best coins are, it varies at any given time. While crypto is all speculative, there are definitely some safer coins than others. Aside from Bitcoin, some of the safer coins would be:

  1. Ethereum
  2. Dash
  3. Neo
  4. Monero
  5. Litecoin

Then you have some of the coins which are not as safe per se, but we consider them to be more solid investments that are likely to stay around for a while:

  1. ICON
  2. OmiseGo
  3. Ripple
  4. Bitcoin Cash
  5. Iota
  6. Loopring
  7. Stellar
  8. 0x

How to determine which altcoin to buy

'UNDER THE RADAR' ALTCOINS

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These are just the projects we've considered when writing this article, this is by no means investment advice is not a definitive or exclusive list. Others may disagree wildly with our list and you may do so too.

At any rate, the purpose of those lists is to point out that some projects are more stable and established, and therefore considered "safer" places to put your money, whereas newer projects are less proven, and could be more likely to disappear over night (yet probably also have more upside too).

It Takes Practice

Picking altcoins is a process of fundamental research, and waiting for the right entry-points so you don't end up buying high shortly before a market correction comes in. We'll outline below some of the things you need to consider, but we also recommend subscribing to our email list so you can keep up to date with our reviews and strategies.

The checklist below is a good starting point for research, but is only the very surface of research. 

  • check
    A good altcoin has a solid team behind it, with strong experience and ideally, blockchain background.
  • check
    The project needs to have at least a prototype or MVP.
  • check
    The idea needs to make sense, is adoptable, and be a good blockchain project.
  • check
    Ideally, the coin circulation isn't incredibly high, so there is more room to grow.
  • check
    Higher marketcap coins are generally safer, but lower marketcap coins have more room to grow, or "moon".

The more you study and read, the more you'll learn. Don't just try to ride a wave or jump on a coin that has suddenly started to take off. You will have plenty more chances to get to the moon, and following pumps is the fastest way to lose money.

CONCLUSION: ARE ALTCOINS WORTH THE BOTHER?


Should You Invest In ICOs

Altcoins are very much worth investing in, as long as you do it sensibly, and don't expect to be buying a lambo the next day. While there are many altcoins that are safer than others, it doesn't mean the only way to make a large amount of money is to try to jump on the cheapest coin available. Even the bigger coins like Ethereum still have a lot of room to grow. We are still in very early days of cryptocurrency, and there is plenty of growth to be had.

The more time you have to study, the better your chances of finding some hidden gems. If you don't have a lot of time, just invest in some of the top 10-20 marketcap coins instead. In 2017, investing in the top 100 coins would have given you 50x returns.

  • 1
    If you don't have time, just stick with Ethereum, or other "safe" altcoins like Neo, Dash, or another top 10 coin.
  • 2
    Subscribe to our email list and read our ICO reviews as they come out. We're not going to tell you how to invest, but we'll help you start the research.
  • 3
    You can also get our free guide on 9 steps to evaluating any ICO.

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