Cryptocurrency is the first child of blockchain technology. A blockchain is a system that allows information to be distributed, but not copied. It is an incorruptible digital ledger that can store many different types of values. At a high level, it is a distributed trust system. Bitcoin was the first cryptocurrency to hit the market, but several "altcoins" have since been created utilizing blockchain technology.
The "alt" in "altcoin" refers to the fact that the cryptocurrency is not Bitcoin; it is an alternative cryptocurrency. All altcoins hold some similarities to Bitcoin, but they often offer different features. Some altcoins are just an expansion of Bitcoin, but others were built from the ground up and are entirely different. Regardless of their similarities, each type of cryptocurrency is governed by a different entity and has an alternate means for the how the currency or token will be used.
In order to view the current market capitilization (market cap) of all cryptocurrencies, I use Coinmarketcap.
On Coinmarket Cap, you can view the total market cap of all cryptocurrencies as well as over a thousand different types of individual cryptocurrencies and information about each such as the website for the currency, blockchain explorer, message board/chat, the sourcecode, its rank as a currency, whether it is a token or coin, and tags indicating whether or not it is minable.
Crypto.ch displays 1 day mini-charts of many popular exchange markets in a grid view.
From the main page, you can select a market to view an advanced chart of the currency selected. Then, technical analysis can be used to depict the data.
Coinbase is an American company that offers services enabling users to easily buy and sell cryptocurrencies. They currently allow access to Bitcoin (BTC), Litecoin (LTC), Ethereum (ETH), and recently, Bitcoin Cash (BCH).
The Homepage is fairly easy to maneuver; there is a navigation bar at the top left for virtually everything necessary to use Coinbase. This includes:
- This page contains an overview of your assets, transactions, and line charts with the current price.
- This page allows you to buy and sell cryptocurrency on the Coinbase platform
- Accounts provides detailed information and allows you to manage each account available.
- Tools lets you manage recurring transactions, reports and history.
- The Settings page contains Access Profile, Security, Account Links, and Identification options.
The Buy and Sell functionality is an express way to obtain or exchange cryptocurrency. First, you will need to go to Settings under the Linked Account tab to link to either PayPal, a debit/credit card, or a bank account routing number. With a credit or debit card, cryptocurrencies can be instantly bought within the designated limit assigned by Coinbase. Using a bank account still requires you to remain within that buying threshold set by Coinbase, but it can take a bit longer for processing, sometimes up to a week.
Accounts allows you access to the wallets you have hosted on the Coinbases platform. You'll be able to send, receive, and manage your wallets, as well as view previous transactions.
Tools will allow you to create new wallets, review and manage recurring transactions, generate reports per wallet, and view the history of every transaction that has taken place. This section is especially useful when calculating earnings for taxes.
Settings allows you to customize your profile and account. You can change personal information, manage two-factor authentication, add and remove linked accounts, access the Coinbase API, and view and increase limits.
For additional information, you can check out Coinbase's Support.
Binance is a China-based cryptocurrency exchange offering access to many different alternate currencies, including its own cryptocurrency, BNB. BNB can be used to reduce comissions on trades. For its first year in existence starting in July of 2017, it will reduce comissions by 50%. In the subsequent years to follow, this will be halved every year. You can read more on BNB here.
On the main page of Binance, you'll find a basic view of crypto assets ranked from highest to lowest in volume of BTC being traded.
Without logging in, you'll have access to view most of the services Binance offers, including both basic and advanced charting applications, view of labs, launchpad, and support.
To register with Binance just visit https://binance.com and click on register.
Binance offers a basic charting application and an advanced charting application, which allows you to use indicators, draw trend lines, and much more. Both charts contain a view of Depth, a visual representation of the order books.
On either chart type, you'll find a place to submit Limit, Market, and Stop-Limit orders.
- Limit Order - an order to buy or sell at a specific price.
- Market Order - an order to buy or sell at the current market price.
- Stop-Limit - an order to buy or sell at a specific price. The Stop sets a marker so that when the market prices reaches the stop price, a limit order will be made. The Stop-Limit is not viewable by others or tracked in the order books until it is triggered.
Labs is a pre-ICO (Initial Coin Offering) platform for incubating projects. They supply funds, access to Launch Pad, listing on Binance, and advice and resources for newly created or developing crypto projects.
Launch Pad is a platform for ICO's in need of funding. Once you have applied to participate in an ICO, the tokens will be locked in your Binance account until they are available for withdraw or trade.
Once you have created an account and logged in, you will be redirected to your profile page, where you can change your password, add Two-Factor Authentication, setup API access, view last login, and view distribution history, which is a listing of the cryptocurrency that has been added to your account based on your holding in Binance.
When trading crytpocurrency, security is something that should be taken into consideration. Binance offers SMS Auth and Google Auth as a second way to authenticate your account. I use Google Auth, as pictured below:
An API is offered by Binance, supplying you with websockets for streams of exchange data and the ability to programmaticly control your trading. This is for advanced users; I have made Part 1 of a tutorial that will show you how to integrate the Binance API and Python to pull simple trade information. You can find that article here.
This concludes our overview of Binance. We'll now break into the meat and potatos, let's buy some crypto and start trading altcoins!
Process for trading Crypto
While buying Bitcoin, Ethereum, or Litecoin is as easy as setting up a Coinbase account, getting access to an altcoin may not be so clear. Below is a step by step guide to purchasing altcoins:
- Create a Coinbase account.
- Link an Account within Coinbase. This can be a credit card or bank account.
- Make sure the account has been verified and you have access to purchase from the linked account.
- Purchase Ethereum. Using a debit card will give you the ability to instant buy.
- While the transaction is proccessing, hop on over to Binance and create an account.
- Navigate to Funds > Deposit and Withdraws
- Find Eth, click on Deposit. You'll be given an address that you need to copy. This will be the address of the wallet you send Ethereum to on Binance and will be stored on Binance's servers.
- Once you have the address and the transaction on Coinbase has been proccessed, access your Ethereum wallet from Accounts in Coinbase and paste the address of the Ethereum wallet located on Binance in the Recipient field. Set the amount, hit continue, and confirm the amount.
- When the Ethereum shows up in the Binance wallet, navigate to the basic or advanced charts.
- Place your first Limit Order by finding a target price(1). This is the current market price for the altcoin you would like to purchase. Then select Limit Order(2) and how much of your Ethereum you would like to use to buy(3). Submit the order to the order book(4). Then wait for the order to be filled.
- Congradulations, you've complete your first limit order on Binance!