Cryptocurrency was once an obscure way of handling money that seemed almost like a ponzi scheme or something bound to crash. Now, it’s everywhere. The digital money based on blockchain technology passed 100 million worldwide users in February and has seen growing interest in Austin and across Texas.
Austonia talked to investors Sam Feldman, who started Austin’s crypto billboards, and Jon Gregis of crypto community ATX DAO, about how they got into crypto and steps they recommend for people who want to get involved.
Both say they understand that people feel intimidated, but that the best way to get it is by diving right in.
“If someone has like 100 bucks to invest in Bitcoin, or if they’re comfortable with more, I think it’s very hard to learn about this in a way that’s just conceptual,” Feldman said.
If you’re crypto-curious, here are a few tips to get started:
Decide what you want to get out of it
Crypto can seem elusive, and there are some basic concepts you’ll need to understand. One is blockchain technology. A blockchain is a digital ledger that’s used to record information such as transactions and NFT ownership. You’ve likely heard of some blockchains like Ethereum. This network is the second-largest by market cap, behind Bitcoin. This tech is decentralized, meaning there are no intermediaries like a bank.
With that, the next thing you should know is that there isn’t a one size fits all approach to getting started in crypto.
So, pick something that interests you. Do you want to be a day trader? Or perhaps you’d like it for transactional purposes, which Bitcoin is fit for. Maybe you’d be suited for building applications or becoming a blockchain developer through Ethereum.
But any route you go, you’ll have to be patient with becoming truly authoritative on it. Still, Feldman is excited to see what Austinites getting involved will bring.
“Crypto is something where it does take a few years, I would say, to be really comfortable with it,” Feldman said. “The earlier we start, the more well equipped this city is going to be for this next tech revolution.”
Feldman says the resource he uses the most is Twitter. Even his website, marketcap.guide, has a dedicated spot for top tweets, with posts from crypto leaders like a partner at VC firm Placeholder and Web3 accelerator DeFi Alliance.
Gregis is wary of relying too much on social media, however.
“There’s just so much information out there that for someone to use only YouTube or only Twitter… you’re only probably getting one side of the story,” Gregis said.
He suggests finding Telegram group chats or joining meetup groups like Ethereum Austin if you’d like to get in the developer space or smart contracts. The group hosts regular events on topics like game theory and NFTs for social impact.
What to invest in
When Gregis started out around 2013, he was writing cashier’s checks to buy Bitcoin. Those days are gone, and you can now easily get started by making an account on a crypto exchange like Coinbase or Binance. Once you’re on these platforms, you’ll be able to exchange U.S. dollars or other currency for digital assets.
Now that you have the tools to buy and sell crypto, you can go for the most mainstream ones like Bitcoin or Ethereum. But you may have an interest in meme crypto, like Dogecoin. When it comes to these types, experts say they could do well, but it may not work in your favor in the long term.
Then there’s more advanced crypto, such as IOTA. Part of the process is signing up for Coinbase and buying Bitcoin. And then you can sign up for another service that will then allow you to convert your Bitcoin to IOTA.
Now, whether IOTA and others like it are a good investment, you’ll find mixed opinions, and it’s likely you’ll need to do your homework to see what is best for you.
A safety step Gregis has taken is keeping everything in “cold storage,” which is a space that isn’t connected to the internet.
“It’s far too easy to get your funds stolen, or if you keep your money on an exchange or even if you keep your money on your computer,” Gregis said. “I’ve heard so many horror stories of people getting their crypto stolen because they don’t do it securely.”
Gregis’ cold storage is a ledger in the form of a USB drive. This way, nothing can come out of the wallet and no transactions can take place without the password-protected ledger. And if you’d like to go a step further to protect your funds, Gregis suggests associating the USB with a mnemonic passphrase. That way, even if somebody steals the USB or it’s misplaced, you can use the passphrase to buy another ledger and keep your money.
“It’s not like a traditional bank where they’re holding it for you. There’s no custodian,” Gregis said. “You are the one that’s controlling your money or your crypto so learn all the problems that could occur if you don’t.”
Think long game
A common mistake people make when starting out is following hype or feeling like crypto is fraudulent because they lost money, Gregis says.
It’s also easy to lose sight of the potential. One day, around the time Bitcoin started hitting close to the $1,000 mark, Gregis asked his friend, who first told him about crypto, what had happened with his money. The friend responded that he had sold about 15,000 Bitcoin for a coffee maker, a move he regretted.
Gregis mentioned that In early December the market had been going through a recent dip, leading some people to switch out. It’s important to keep in mind that you might lose money right away, he says. And yet, you could still make money in the long term.
“If you’re going to get into crypto, really get into it. Don’t be a fair-weather fan,” he said. “If you believe in something, stay there long term because there are too many people that put blind speculation and think they’re going to make these insane returns.”