Bitcoin - where shoud I start?
Introduction. Bitcoin's invention is based on the combined knowledge of decades of cryptographic and computer science research. Within a decade after the launch, it has grown into an indestructible, antifragile decentralized monetary network with a max supply of 21 million BTC. It is widely considered as programmable, dematerialized gold for the internet and digital information age.
The current monetary climate with unlimited debt creation, negative yielding debt and low to negative interest rates has led to a search for alternatives. Indeed, bitcoin is considered as a decentralized alternative for central banking and provides us with a new transformative savings technology and absolute scarce digital asset class. As an emerging new digital asset class, bitcoin is increasingly more used as an inflation hedge and a strategic reserve asset by investors and corporations. It is a mind blowing unique historical event in our financial history and represents an unprecedented financial paradigm shift.
Getting started. There are plenty of options where you might start your bitcoin journey. It is essential you pick the right one and that you open an account on a trustworthy bitcoin exchange. LiberBits has made a selection of the best exchanges you could start as a beginner and as an advanced trader. LiberBits recommends our readers to open an account with one or two of the below mentioned exchanges and compare them:
Bitvavo Exchange - Amsterdam.
Bitvavo is a leading European cryptocurrency exchange. Bitvavo has a maximum trading fee of 0.25%. The simple and advanced interface for experienced traders make the currency of the future accessible for everyone for the lowest price. Bitvavo is trusted by brokers and institutional investors. It is one of the first digital asset provider in Europe with an insured cold storage solution. Bitvavo aims to be at the forefront of regulatory compliance, technological innovation and security in the digital asset industry, which is developing at an increasing speed. Bitvavo uses data centers compliant with the following certifications: ISO 9001, ISO 27001, ISO 27017, PCI DSS Level 1, SOC 1 - 3. These standards help Bitvavo to achieve high levels of security and compliance in its cloud infrastructure. For more information: visit Bitvavo.
Gemini Exchange - New York
Gemini is a licensed New York trust company that undergoes regular bank exams and is subject to the cybersecurity audits conducted by the New York Department of Financial Services. SOC Certifications - Gemini is SOC 1 Type 1 and SOC 2 Type 2 compliant. Gemini is the world’s first cryptocurrency exchange and custodian to complete these exams. Insurance Coverage - all crypto held online in the exchange wallet is insured and they use best-in-industry cold storage coverage with leading insurance providers. For more information: visit Gemini.
AAX Exchange - Hong Kong
AAX is powered by LSEG Technology’s Millennium Exchange – the same matching engine that powers the London Stock Exchange – AAX is an institutional-grade exchange platform offering OTC, futures and spot trading, plus high-interest savings. The exchange has ultra-low latency (as low as 90 microseconds and sub-millisecond averages), with superior functionality and support for 50 spot pairs, derivatives, fiat-to-crypto on/off ramps and benefits from a high level of security thanks to its partnership with cybersecurity giant Kroll. For more information: visit AAX.
Kraken Exchange - San Francisco
Kraken is one of the largest and oldest Bitcoin exchanges in the world, Kraken is consistently named one of the best places to buy and sell crypto online, thanks to their excellent service, low fees, versatile funding options and rigorous security standards. For more information: visit Kraken.
Binance Exchange - Global
Beyond the world's leading cryptocurrency exchange, Binance spans an entire ecosystem. Binance offers their users everything they would desire and more. It is a labyrinth of possibilities. Binance has a spot & futures exchange, DEX, P2P-marketplace, savings accounts, debit card, lending facilities, staking options, research division, startup incubator and launch pad, etc. Customer service is not always the best compared to other exchanges. For more information: visit Binance.
Bitfinex Exchange - Global
Bitfinex is the longest-running and most liquid major cryptocurrency exchange. Founded in 2012, it has become the go-to platform for traders & institutional investors. Bitfinex strives to achieve it by providing the users with state-of-the-art trading tools, innovative technology and unparalleled levels of customer service. For more information: visit Bitfinex.
Hodl Hodl P2P exchange - decentralized
Hodl Hodl is a global P2P Bitcoin trading platform, that allows users to trade directly with each other and it doesn't hold user’s funds — locking it in multisig escrow instead. This minimizes the possibility of Bitcoin assets theft and reduces trading time. Because Hodl Hodl does not hold any money (neither Bitcoin, nor fiat) it is not subject to complex compliance procedures. This allows trades to happen directly between users' wallets and without having to submit your identity to the trading platform. Another important feature of Hodl Hodl is that you can trade Bitcoin in any location in the world, use any payment method, and be paid in any currency. For more information: visit Hodl Hodl.
Do not trade, but apply a DCA and HODL method
The next step is to learn as much as possible about Bitcoin and don't trade it if you are not a professional trader. LiberBits recommends their readers to adopt a simple DCA-method to accumulate Bitcoin (BTC). Bitcoin dollar cost averaging consists in investing a fixed amount of EUR, into BTC, on regular time intervals. You’ll often see it referenced by its abbreviation of "DCA".
Purchasing 100 euro every week, for example, would be dollar cost averaging. This strategy is mostly used by investors that are looking to purchase Bitcoin for the long-term, since it protects them from potentially allocating all their capital at a price peak. Only invest your savings you can allocate to bitcoin for a long term period and potentially sell of some bitcoin during a bitcoin cycle peak.
Furthermore, LiberBits does not recommend to buy other crypto assets. Investors should start by investing in education not with speculation with other unrelated crypto assets and tokens. LiberBits recommends our readers to check out the following bitcoin educational sources:
- The Bitcoin Beginner's Guide - Podcast series on Bitcoin of Peter McCormack
- Unchained Capital - Blog with great content on Bitcoin's value proposition.
- Saifedean Ammous - Educational content of the writer of the Bitcoin Standard. A masterpiece on financial history and bitcoin.
- Robert Breedlove - Bitcoin educator with fantastic content on bitcoin.
- Microstrategy on Bitcoin - collection of the best video's and content of bitcoin's value proposition.
- Einfach Bitcoin - German site on bitcoin with great content for the German readers.
- Beste Bank - Dutch reference site on bitcoin content and resources with a free bitcoin course.
This information is not investment advice. Do you own due diligence before investing in bitcoin.