Please share your knowledge on cryptocurrencies
December 15, 2017 3:44 AM Subscribe
I want to get into trading cryptocurrency in a small hobbyish way. I'm looking for your recommendations on what to read, who to follow on twitter, advice on good currency exchanges, storage options, and anything else you think my help me get up to speed.
DON’T take out a loan with anything you need as collateral to do this, and don’t quit your job to do it. Odds are, you aren’t going to get rich doing it. Have fun, if gambling is something you like, but be safe.
posted by Anne Neville at 5:31 AM on December 15, 2017 [2 favorites]
posted by Anne Neville at 5:31 AM on December 15, 2017 [2 favorites]
Response by poster: To be very clear I won't be putting in anything I can't afford to lose.
posted by roolya_boolya at 7:00 AM on December 15, 2017 [2 favorites]
posted by roolya_boolya at 7:00 AM on December 15, 2017 [2 favorites]
Antonopoulos is a good starting point, with his book Mastering Bitcoin.
Coinbase is good for a starting point if you're US-based. I've put USD in and taken USD out, and put cryptocurrency in and taken cryptocurrency out. Which doesn't rule out a hypothetical future Mt Gox scenario, but CB seems solid at this time. (And if you don't know what Mt Gox is, read up for a lesson in how things can screw up badly in this world. It's less of the Wild West out there than it was a few years ago, but the money is bigger and the players in the game are bigger now as well.)
posted by theorique at 7:12 AM on December 15, 2017
Coinbase is good for a starting point if you're US-based. I've put USD in and taken USD out, and put cryptocurrency in and taken cryptocurrency out. Which doesn't rule out a hypothetical future Mt Gox scenario, but CB seems solid at this time. (And if you don't know what Mt Gox is, read up for a lesson in how things can screw up badly in this world. It's less of the Wild West out there than it was a few years ago, but the money is bigger and the players in the game are bigger now as well.)
posted by theorique at 7:12 AM on December 15, 2017
Also: If you want to run an Ethereum node, you'd better have an SSD and a fairly fast computer. The Ethereum blockchain with the geth client has a tough time syncing on older and/or slower machines.
posted by theorique at 7:13 AM on December 15, 2017
posted by theorique at 7:13 AM on December 15, 2017
Arstechnica has a brand new guide up that starts at the start, has a couple of useful illustrations and is an excellent overview.
posted by zenon at 7:29 AM on December 15, 2017 [1 favorite]
posted by zenon at 7:29 AM on December 15, 2017 [1 favorite]
One question to ask yourself is whether you are going to be a trader or investor.
Being a trader involves taking positions for shorter time periods. Generally, in trading you can only be successful if you have some sort of information advantage over other market participants. Large bank and hedge fund stock and bond traders are on the phone constantly with potential buyers and sellers of large blocks of stocks. A lot of what they do is connect these buyers and sellers and essentially take a fee for it. Sometimes they will buy from a seller without knowing who they might later sell the stock to. Once they buy, they will feverishly work the phones to sell the stock. So the question to ask yourself is what information advantage you have. Do you know the other market participants well enough? Do you have a good way to gauge what their intentions are, or what they might do given a number of likely events? Do you have information they don't? Are you able to buy on one market and sell on another at profitable prices? Do you have speed advantages that others don't? Do you have access to technology others don't? My advice is to evaluate whether you have any of these advantages, and then write them down. From there you can generate the trading strategies you will use. Again, write these down. Do not drift from them unless you go through the same process of writing things down.
I cannot count the number of times I have spoken to people who are investing significant amounts of money with a strategy that boils down to: "I read blogs, newspapers, twitter feeds, CNBC, etc to evaluate sentiment on a stock, and then buy with no sense of what my intended holding period or selling price will be." These investors generally lose money. Also, their investing strategy is too embarrassing to write down, so they don't. They keep no written record of their rate of return on their invested capital, preferring to forget their losing trades, and remember only their winning ones. Also they have no sense of their trading costs, currency conversion costs, or tax implications of their trading.
If you are an investor, you will buy and hold. This is in many ways harder than trading, since you are looking for a hobby, but investing involves long periods of doing absolutely nothing. And you'll be doing that nothing while you are watching the market doing lots of things. If you see lots of market participants doing lots of things, you'll be temped to do those things too. But if you can be patient, you have more of a chance of being successful, because fewer transactions means that more of your invested dollars stay with you instead of being eaten by the fees you pay for transactions. Again, a written plan you can refer to is helpful in reminding you to do the things you set out to do.
Lastly, read Matt Levine's daily newsletter at Bloomberg. He's a lawyer and former investment banker at Goldman Sachs. Nearly every day he's got something interesting to say about bitcoin, the various market structures involved, and also the growing SEC enforcement actions on some of these ICO's.
posted by thenormshow at 8:32 AM on December 15, 2017 [5 favorites]
Being a trader involves taking positions for shorter time periods. Generally, in trading you can only be successful if you have some sort of information advantage over other market participants. Large bank and hedge fund stock and bond traders are on the phone constantly with potential buyers and sellers of large blocks of stocks. A lot of what they do is connect these buyers and sellers and essentially take a fee for it. Sometimes they will buy from a seller without knowing who they might later sell the stock to. Once they buy, they will feverishly work the phones to sell the stock. So the question to ask yourself is what information advantage you have. Do you know the other market participants well enough? Do you have a good way to gauge what their intentions are, or what they might do given a number of likely events? Do you have information they don't? Are you able to buy on one market and sell on another at profitable prices? Do you have speed advantages that others don't? Do you have access to technology others don't? My advice is to evaluate whether you have any of these advantages, and then write them down. From there you can generate the trading strategies you will use. Again, write these down. Do not drift from them unless you go through the same process of writing things down.
I cannot count the number of times I have spoken to people who are investing significant amounts of money with a strategy that boils down to: "I read blogs, newspapers, twitter feeds, CNBC, etc to evaluate sentiment on a stock, and then buy with no sense of what my intended holding period or selling price will be." These investors generally lose money. Also, their investing strategy is too embarrassing to write down, so they don't. They keep no written record of their rate of return on their invested capital, preferring to forget their losing trades, and remember only their winning ones. Also they have no sense of their trading costs, currency conversion costs, or tax implications of their trading.
If you are an investor, you will buy and hold. This is in many ways harder than trading, since you are looking for a hobby, but investing involves long periods of doing absolutely nothing. And you'll be doing that nothing while you are watching the market doing lots of things. If you see lots of market participants doing lots of things, you'll be temped to do those things too. But if you can be patient, you have more of a chance of being successful, because fewer transactions means that more of your invested dollars stay with you instead of being eaten by the fees you pay for transactions. Again, a written plan you can refer to is helpful in reminding you to do the things you set out to do.
Lastly, read Matt Levine's daily newsletter at Bloomberg. He's a lawyer and former investment banker at Goldman Sachs. Nearly every day he's got something interesting to say about bitcoin, the various market structures involved, and also the growing SEC enforcement actions on some of these ICO's.
posted by thenormshow at 8:32 AM on December 15, 2017 [5 favorites]
This thread is closed to new comments.
posted by ropeladder at 4:14 AM on December 15, 2017