Bitcoin Investing For Beginners 2021 (Full Course/Tutorial)

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- What's going on you guys? Welcome back to the channel. So in this video today, we're gonna be covering The Ultimate Guide on Bitcoin for Beginners. I'm gonna teach you everything you've probably ever wanted to know about Bitcoin, as well as the different ways you can purchase it, how you can earn interest on your cryptocurrency, and also if you're looking to store it offline in cold storage, I'm gonna show you exactly how to do that. We'll be showing you, basically a beginner presentation on Bitcoin. And then I'm gonna show you step-by-step tutorials on how to purchase Bitcoin, how to earn interest on it, and then how to store it in offline, a cold hardware wallet. So a lot to unpack here guys, I would recommend grabbing a pad of paper and a pen, eliminate those distractions around you if possible. But that being said guys, let's jump right into the presentation. Alrighty guys so let's jump right into the presentation here and talk about Bitcoin for Beginners. We're gonna be covering The Ultimate Guide on Buying and Storing Bitcoin Safely. Now, the first thing I want to talk about here is more towards my older audience who have been watching my videos for many, many years because pretty famously back in 2017, I made a video talking about why I would never put a single penny into Bitcoin back when it was $3,000 per coin. And I can tell you now guys that I have 1,000% changed my stance and opinion on Bitcoin and cryptocurrencies. And I basically went from saying, Hey, this is an asset I would never consider touching. Fast forward to 2021, and just recently, I actually sold off the majority of my Bitcoin investment and used it to purchase a second home in Florida. So I went from basically rejecting this to making so much money from it that I was able to buy a house so I can share maybe more details with that in another video with you guys. But I have a lot of cryptocurrency, I've traded hundreds of 1000s of dollars of it in the last couple of years and I've made a lot of money from it. And I've also lost some money on other cryptocurrencies. And basically I'm gonna share all of that in this video here with you guys. My firsthand experience and everything I've learned in the cryptocurrency space over the last four years. Now real quick guys, I do have a few disclaimers to make here, I am not a financial advisor. And this is not any kind of financial advice. And you should always do your own due diligence and research above and beyond this video. And this video here is for entertainment purposes only. Also, I am going to be including links down below which are affiliate links. So if you decide to use them, I may earn a commission in the process at no additional cost to you. And lastly, this video is sponsored by BlockFi. Now the very first thing I want to address here is the number of scam comments that are very likely to show up on this video. Unfortunately, there are so many people out there looking to scam others in the cryptocurrency space. So there will be scammers in the comment section below. I pay somebody who basically deletes them every single day, but it's impossible to keep up with them at this point. So what I'm gonna tell you guys to do, look for the gray outline around my name as well as that white checkmark and the number of subscribers I have. That's how you verify it's actually me commenting, nine times out of 10 it's going to be a scammer. I will never ever give you my phone number, a WhatsApp number, Telegram, any of that, if you're seeing any comments like that it is 100% a scam. And I encourage you to report those or just comment scam that way other people know that this is a scam so they don't end up losing money. And I'm gonna do my best to delete those comments on my end, as quickly as possible. So starting off from the complete beginning here, what exactly is Bitcoin? Well, Bitcoin is a digital currency that was created in 2009 and it follows the ideas of Satoshi Nakamoto. This is the first decentralized digital currency. And essentially what this means is that there's no governing body controlling Bitcoin, because up until this point, all of the currencies in the world other than things like gold, which isn't really a currency, that's more of a store of value, are based on a underlying government and this is referred to as a fiat currency. Bitcoin is a faster and cheaper way to move money more freely, and all transactions live forever on the blockchain, and we're gonna unpack what exactly that means as we go. So first of all, what exactly is the blockchain? So the blockchain is a public ledger that everyone has access to. And everybody can see this. And this shows all Bitcoin transactions in entirety. And this can be viewed by simply going to blockchain.com. Essentially, with the blockchain technology, you have these miners that are essentially loaning their computing the power in order to verify transactions and ensure that all records match up. So the blockchain is basically the most perfect record keeping system that we have ever really had. And in exchange for loaning out that computing power, these miners are rewarded with Bitcoin. However, one of the major criticisms surrounding Bitcoin right now, and the reason for the recent sell off is related to the amount of energy involved with crypto mining and specifically Bitcoin mining. So recently, Tesla said, "Hey, you know, "we're not going to allow people to purchase Tesla's anymore "with Bitcoin for that reason." And so that triggered the recent sell off that we've been seeing here with Bitcoin. So getting into a bit more detail here, looking more into the blockchain, let's talk about blocks. So each block contains a list of Bitcoin transaction, and then each block references back to the previous block. Essentially, this presents the blockchain from being tampered and it's impossible to counterfeit the Bitcoin cryptocurrency or do any type of fraudulent transactions, since it is a publicly viewable ledger. So what exactly is the purpose of Bitcoin? Well, this is something that is widely argued, even to this day, some people say this is purposeless, and it really should not have any value at all. Some people say this is digital gold, and it will one day have a similar market cap to the value of gold. And there's a lot of people that think the purpose falls somewhere in between. But let's cover some of the common ideas around the purpose of blockchain as well as Bitcoin. Well, Bitcoin, the whole purpose behind this is to democratize the financial system and create a currency run by the people. Especially right now, with the record amount of money printing going on with world economies in response to this global pandemic. A lot of people are concerned with inflation and devaluing of fiat currencies. So they favor one that is universally acceptable and transactable. And especially with Bitcoin, one of the things we're gonna talk about is the controlled supply, and the fact that there's only ever going to be 21 million Bitcoins period, not to mention, many of them have been lost forever due to the miss handling. That is why it is so important to do your research and watch videos like this to understand how to be safe with any type of cryptocurrency investment that you have. So beyond that others look at Bitcoin as a store of value that hedges against inflation, and that is due to that fixed supply, seeing as we can't make more Bitcoin, whereas with fiat currencies, the government's can make as much of that as they want. And in the future, could it be a currency to purchase goods? We're clearly not there yet with the ongoing volatility, but that is a use case or purpose that some people argue, however, in my opinion, I don't think Bitcoin will ever really be used in that manner, I think it's going to be more of a store of value, similar to the way that we don't go out there and use gold for purchasing. So that being said, How exactly does Bitcoin work? Well, it's a fully digital currency that anyone in the world can use, assuming you're not in a country where, Bitcoin exchanges have been blocked. Miners verify transactions and in return, they earn Bitcoin as a reward for mining that Bitcoin. However, that amount that they earn as a reward deteriorates or diminishes by 50%, basically, every four years, and we just had a blockchain reward halving back in May, which even constricted the new supply of Bitcoin to the market even more. So these blockchains keep records of transactions and ownership, and it is a trustless system, which is also a decentralized system with no single point of attack or failure. It's a system that nobody could, target one specific server and take the entire thing down. And this protects against fraud as well as attacks on the system and all kinds of things like that. Investors in Bitcoin primarily buy and HODL which stands for hold on for dear life. Because of the volatility that Bitcoin experiences and the only way right now to get paid in Bitcoin by owning the currency itself is by having a go up in value. However, there are ways you can actually loan out your Bitcoin to earn interest on it. And we'll be discussing that later on. But in and of itself, Bitcoin does not pay dividends or anything like that. So owners of the cryptocurrency are purchasing it because they believe it's going to have a higher value at some point in the future. So why exactly is Bitcoin valuable in the first place? Well, currencies are valuable because we can use them for purchasing. Currencies have scarcity, divisibility, utility, transportability, durability and counterfeitability. So those are a lot of the components of our typical fiat currencies. The US dollar has value because it is deemed a legal tender and so basically, because the US government says this is what we will use for purchasing. That is why it has value. Bitcoin is not legal tender, but it still has value because it can be used as a unit of exchange, and it certainly can be used as a store of value. Now if you look at the different things we have used over the year, as currencies, we go all the way back to gold. And I like this chart here from Investopedia that looks at the different traits of the money. So going all the way back to gold, it has a high fungibility, it is non consumable, moderate portability, it is large, probably not the easiest thing to move around. It is highly durable, it is moderately divisible, because you would actually have to physically separate it out. It is moderately secure, because it is difficult to counterfeit gold and you can prove that it is a counterfeit based on testing the gold itself. Ease of transactability very low, it's difficult to buy and sell gold because it's a physical currency or commodity. Moving on there, the scarcity is moderate, as far as the sovereignty is low, decentralized low and smart, low. It's a lump of metal, it's not very smart. Moving on to fiat currencies, there were definitely some improvements in transactability for example, also the sovereignty being government issues. That was a basically a greater degree of trust factor that people had in that currency based on it being government issued. When you look at cryptocurrency and Bitcoin specifically, other than not being government issued, which a lot of people view as a positive, it knocks everything else out and out of the park. Highly divisible, easily transactable, it is a scarce predictable, controlled supply, decentralized, smart and programmable. And so that is why a lot of people think, cryptocurrency really makes sense for this digital era. So now let's compare Bitcoin to other currencies out there and other things people invest in. So starting off, let's look at Bitcoin versus money. So Bitcoin physically does not get worn out because it is a non physical currency, it does not physically exist. It is infinitely divisible, so you don't have to worry about 20s, 10s, fives, ones and different denominations of currency. Bitcoin 100% cannot be counterfeited based on the public blockchain. And Bitcoin has no centralized authority, because it is not a fiat currency. Money, on the other hand, has no inherent scarcity whatsoever, and they can just keep on printing, much like we've been seeing here with the multiple stimulus packages in the United States. Not to mention money can be mismanaged and manipulated, it can also be destroyed or damaged. And there's no scarcity whatsoever, just again, bringing that point up again, that is the main concern people have with money. And we have seen hyperinflation in the past, based on governments printing unbelievable supply of money, that ends up being a problem because then, there's too much money out there becomes almost valueless. And you have to bring a wheelbarrow full of money to buy yourself a loaf of bread. So specifically talking about the scarcity. This is why Bitcoin is what we call a hedge against inflation, potentially. With the volatility that we have seen, it's definitely not quite a store of value yet, but it will be interesting to see how this keeps pace with inflation going forward. So taking a look at this chart right here, this shows you the total amount of Bitcoin that will ever exist, and the last Bitcoins are going to be mined all the way over here. I believe it's past the year 2100. This is where we are right here. We just had another reward halving, we're gonna have them basically every four years and so the new supply of Bitcoin hitting the market is going to be reduced by 50%. essentially every four years. Only 21 million will ever exist, a lot of them are already out and many of them have been lost forever. So that is why the Bitcoin scarcity is quite interesting. And we certainly do not have this with fiat currencies. Now looking at Bitcoin versus gold, let's talk about the similarities and differences because a lot of people call Bitcoin, the digital gold, viewing it as a store of value. So Bitcoin is very easy to move because it is a non-physical. It is infinitely divisible so you can send as little of it as you want, or as much of it as you want, without physically dividing up a piece of metal, it's inexpensive to store and in, I would argue it can be more secure with proper cold storage than having gold locked up. It is also practical to transact with, some would argue against that based on fees, but more practical than gold. Gold, on the other hand, is not practical to move or transact with, it's difficult to divide into smaller parts. And much of it is controlled by governments in the Federal Reserve. So that is some of the differences there between Bitcoin and gold, as well as those similarities. Also, clearly with gold, we can't make any more of it. There's a controlled supply on this earth. And so that controlled supply is also what makes this similar to Bitcoin. So now let's consider Bitcoin versus stocks. Well, first of all, Bitcoin has greater potential for larger price swings, and we have found it to be way more volatile than the stock market. However, one of the pros of Bitcoin is global accessibility to purchase. And it's essentially a global market that anybody can participate in, as long as their country has exchanges available. Also, markets are open 24/7, which is really interesting and pretty exciting on the weekends, if you wanna keep an eye on crypto prices, or trade or whatever. And Bitcoin has potential to be used as a currency. On the other hand, with stocks, they're easier to value with various metrics, they also have a much longer history of being something that you put your money into, that tends to make your money, we're talking hundreds of years versus about 10 years here with Bitcoin. That's the longer track record, giving it more predictability and support levels. Also the ability to diversify risk across a number of different companies. You don't have that with Bitcoin, but if you do get into the world of Altcoins, and you do your own due diligence, I do own other cryptocurrencies outside of Bitcoin and you may choose to do the same. So that being said, the obvious question here, is Bitcoin a good investment? And, guys, this is a question you're gonna have to answer for yourself. I'm gonna teach you a lot more about Bitcoin and why it has gotten to the point where we are today. And then later on in this video for educational purposes, I'm gonna show you how you would physically go through the process of buying, transferring it to earn interest or into cold safe storage. But it's ultimately up to you if this is something that you want to get behind, and that you see value in. I'll tell you this right now, if you're simply buying Bitcoin, because you think you can make a ton of money with it and you don't really care about the underlying technology or any of this, it's probably not something that you should invest in because you're gonna end up having paper hands. And as soon as that volatility hits, you're probably gonna lose a lot of money. However, one benefit to locking up your crypto in cold storage is it's not that easy to access. So that can help to eliminate some of that desire for panic selling. So basically, many people wonder if it is too late to invest in Bitcoin, and basically time will tell whether Bitcoin holds the crypto throne. Right now it is the most valuable cryptocurrency. However, many other cryptocurrencies have had much better performance in 2021 compared with Bitcoin. Basically putting your entire life savings into Bitcoin, definitely not a good idea. Depending on your risk tolerance, it might make sense to allocate a portion of your Portfolio to cryptocurrency. Most experts are saying anywhere from 0.5% to 2%. I personally have cryptocurrency representing 3% of my total portfolio right now. So as far as owning Bitcoin itself, as I had mentioned earlier, the only real way to make money with the currency is by buying low and selling high, also referred to as asset appreciation. So let's say for example, you bought Bitcoin at $30,000. And then a week later you sold it for $40,000. And you had let's say, $200 worth. Well, you basically made money by purchasing at $30,000 and selling for a higher price at $40,000 because while you owned it, the demand for the coin went up and people were willing to pay a higher price. So far crypto has outpaced the stock market in 2021. However, we're seeing a lot of volatility right now. So it's gonna be interesting to see how things shake up for the rest of 2021. However, I also mentioned there are ways to earn interest by loaning out your Bitcoin. I do this through BlockFi, and I'm gonna show you exactly how to do that later on in the video. Beyond that, if you wanna participate in the actual blockchain, you could mine Bitcoin from your computer. However, there is currently a massive shortage on graphics cards, and PC gamers are furious with Bitcoin miners. So just be careful with that one. Bitcoin miners are involved with verifying Bitcoin transactions for a blockchain reward. This requires very powerful computers with numerous graphics cards, most of those mining rigs are gonna cost many 1000s of dollars, it's still powerful to mine Altcoins from your computer as well. So some people are actually mining Altcoins, which is most likely a more profitable venture than trying to mined Bitcoin just because that's what most people are focused on doing. So let's talk more about BlockFi now, and the BlockFi Interest Account. And this is where all of my cryptocurrency currently lives. So I reached out to BlockFi after I had been a user of their platform. And I asked them if they wanted to sponsor this video. And they said, "Yes," so that was super exciting guys, thank you to BlockFi. I'm a huge fan of their platform. And like I said, I have all of my money that is in cryptocurrency over on BlockFi, except for a couple of Altcoins that are not yet supported over there. So basically, with BlockFi, you can deposit your Bitcoin and a couple of other supported cryptocurrencies and receive interest on that cryptocurrency similar to a savings account for Bitcoin. The interest rates are currently 6% for Bitcoin, which is significantly higher than what you would earn at a bank account. However, there are a few caveats to discuss, you can benefit from the appreciation, owning the currency, if you believe it's going to go up in value from where you purchased, and earn interest payments on top of that, which actually go back into the issued currency. So it's a cool way to earn like compound interest on cryptocurrency. other cryptos pay all the way up to 8.6%. Depending on them, however, that rate is subject to change at any time. That being said guys, BlockFi has no type of government insurance. Since cryptocurrency is not recognized as like a federal asset, there's no insurance in place on it. So that is, the risk that you run here is that when you are giving out your cryptocurrency to a company like BlockFi, they've never lost anyone's money to date, they're a massive company backed by multi-billion errs, who have invested in this company. So they're very legit, I have all my money over there. But it is something that you should be aware of is, even though those rates are much higher part of that reason is because by getting those much more attractive rates, you're giving up that safety net of FDIC insurance by having your money in your bank account, and that's a toss off or trade off, you're gonna have to figure out yourself of which one is more valuable to you. Like I said, I personally have 3% of my Portfolio in cryptocurrency, and almost all of it is in my BlockFi account. That way I can earn interest, I don't have my life savings in there, and most experts would probably recommend you follow a similar strategy. So I wanna talk more about how powerful this all is. And I always like to look forward out into the future and make some predictions. So here is the future of finance based on where we are heading with cryptocurrencies. So instead of using traditional banks, many have switched to crypto based financial services, often referred to as DeFi or decentralized finance. The perks are more freedom and less headaches involved. BlockFi also has a borrowing arm where you can borrow cash using your crypto as collateral without a credit check. And I actually have done this myself, I borrowed $10,000 against my Ethereum balance, just to test it out, but also because I have to put some money into some repairs on my property at my new house. So I figured I would take advantage of that lower interest borrowing and test out BlockFi Borrow. So this service obviously appeals to the 31% of unbanked adults across the world, or people who may have a lot of cryptocurrency but they don't necessarily have good credit so they don't have any access to borrowing. BlockFi gives people in that situation, the ability to potentially borrow through their platform by putting up their crypto as collateral. And so honestly guys this ability to borrow against cryptocurrency, I think it's just the tip of the iceberg and it's only gonna continue from here, and we're gonna begin seeing mass adoption of more financial services in the crypto space related to mortgages, insurance, credit cards, alternative investments, and more. And I'm honestly super excited for it. I'm really excited about BlockFi as well. And I plan on taking full advantage of that borrow feature, which could be an absolute game changer if you know how to smartly use borrowed money. Now, if we look back at the history of Bitcoin guys, it's been a pretty wild ride. So I started talking about it on my channel, way back here in 2017, back when it was $3,000 per coin, and I was out there saying, hey, this thing is a joke, I'm never gonna buy it. Obviously changed my opinion, didn't really buy any during the first run up whatsoever. I earned some referral cryptocurrency from some of my videos, but not much to speak of. I began buying Bitcoin around anywhere from five to $10,000. That's when I started dollar cost averaging. But I've been buying at different points all throughout 2018, 2019 and 2020. I did some lump sum investing around the pandemic, when we had that sort of flash crash right here. And that is how I acquired my crypto. But obviously, compared to the 2018 run up, we're seeing a much bigger move in crypto this time, and hopefully one that is sustainable for the long-term. Now I'd like to cover a very brief history of Bitcoin here because it's interesting to note where we started from. So the idea for Bitcoin was first outlined in an eight page paper by Satoshi Nakamoto in 2008. Nobody knows who this person actually is, and he's never come forward or been identified. The first block ever was mined on January 3rd of 2009. And the first recorded use of Bitcoin was May 22 2010, someone used 10,000 Bitcoin to buy two pizzas worth $25. the crazy part is, that would be worth around $500 million now, if that person had held on to that Bitcoin, for the better part of 11 years. So then in 2011, Bitcoin got a bad name through a connection with the black market site called "The Silk Road." Bitcoin was the currency for purchasing illegal goods due to the anonymity of the currency. This negative connotation still lives on throughout today. And a lot of people are still using that to try to say, "Hey, this is not a valuable currency, "it's a criminal currency, and you shouldn't buy it." So in 2017, the price of Bitcoin went from around $900 to nearly $20,000, before there was a massive crash. And today, it's believed strongly that that was mostly due to big players manipulating the price of Bitcoin to profit from those moves. By the end of 2018, the price for Bitcoin was back down to $3,000. And since then, it has peaked at over $64,000 per Bitcoin. So talk about some wild price swings and volatility over the years. So looking at the future of Bitcoin here, companies like Tesla are accepting Bitcoin payments. However, Tesla then came back and said, "No, we're not doing that anymore." In my opinion, I think that that has something to do with how that news would impact the price of Bitcoin, and potentially being able to get in at a lower price to buy back in. That's merely speculation, but a lot of people have thrown that out there. It's unlikely that the price will stabilize enough in the near future to make transactions practical, because it just wouldn't make sense to keep your money in Bitcoin with the amount of volatility that it has, 'cause you just wouldn't want to have that for purchasing. And you wouldn't want to be accepting Bitcoin for goods because you'll be impossible to set prices based on the fluctuation of the value of the currency. Just recently, it's gone down to like $30,000 per coin, all the way down from $64,000. So you can't set prices when the value could drop 50% in no time at all. Now as a store of value many people are comparing it to gold and saying it could reach the heights of gold. Right now Bitcoin's, roughly $1 trillion market cap is around 10% of the total market cap of gold, and so the price of Bitcoin would need to reach over 400,000 in order to match the market cap of gold. Is that possible? Time will tell but some Bitcoin diehards predict this by 2030. For example, this individual here tweeted, "Bitcoin's market cap will surpass Gold's market cap by December 31 2029." That is certainly a bold prediction and hopefully that is the case. Now looking at Bitcoin versus other cryptocurrencies out there, there are over 10,000 different cryptos on the market today. Now half of the entire crypto market is made up of Bitcoin in terms of the market value, just showing how dominant Bitcoin is in this space. That would be like if in the stock market, one particular stock made up half of the entire world or global stock market, which is just not the case. Other cryptocurrencies like Ethereum and Litecoin, for example, have different purposes, instead of just being a store of value, they actually have utility value. Bitcoin has always dominated the space, but there are some strong rivals emerging, and this could change in the future. Now, when it comes down to actually buying Bitcoin, it's not like anything else you have likely done before. It's not like buying a stock. It's not like buying groceries. It's a very complicated process. And it's very important that you understand how the whole concept works, because there's no customer service number for Bitcoin. So if you lose your Bitcoin, if you lose your password, you are screwed. There's no way to retrieve this information. So pay attention guys, and make sure you understand everything. So with Bitcoin, you need a Bitcoin address and a Bitcoin wallet to actually purchase Bitcoin. And this is similar to an email address and a password for anything that you do online. These are long strings of encrypted letters and numbers. A Bitcoin address is also called a public key, a.k.a email address, whereas a Bitcoin wallet is also called a private key, more like your password. So you can share your Bitcoin address with other people, just like you would share your email address, but you don't share your Bitcoin wallet or private key with other people, because that is your password. So if you want to receive payments from friends or other people, you would share your Bitcoin address, a.k.a email address, which is that long string of letters and numbers, which is where you would receive that cryptocurrency. Bitcoin uses cryptography to maintain a secure system. So basically, someone sends Bitcoin to your public address, it goes through this entire cryptography process, and then you need your private key to receive the Bitcoin, maintaining that anonymity. So let's talk more now about that all important public key. So this is the address your Bitcoin will be sent to. And as mentioned earlier, just like with your email address, anyone can know your public key without risk to you. When you send a Bitcoin, miners will verify that your address holds enough Bitcoin for the transaction to go through and then signing up for a crypto exchange will generate both a public and private key for you to use. If you lose your public key, you can use your private key to recover your public key. So basically, in layman's terms, if you lost your email address, you could use your password to recover that email address. However, the process 1,000% does not work in the reverse direction. If you lose your private key, you cannot use anything to recover that because there is no backup. That is the importance of basically saving your password. And we're gonna talk about really good solutions later on, including titanium wallets and hardware wallets, different things like that, that I have utilized to maintain my private key. So when you own Bitcoin, what you really own in your possession is a private key. And this unlocks the right for you to spend or transact or move those Bitcoin. This is essentially your digital signature, verifying your identity. You should never under any circumstances give anyone your private key, just the same as you would never give anyone your password. This would allow someone to instantly drain the entire wallet of anything in there in a matter of seconds and it would be irreversible. Private keys should be stored offline in a secure location. Not to mention, a lot of people store these on paper. So if you ever had any fire damage, you would lose your private key. That is where the titanium wallet comes into play. This system ensures that it is virtually impossible to forge a Bitcoin transaction and this is the only way to make this happen. Now, as mentioned, when you sign up for a cryptocurrency exchange, they're gonna generate both of these keys for you. However, which exchange should you utilize? Well, I'm gonna just tell you exactly the process I follow. And the later on in the video, we're gonna do a step-by-step tutorial on how to set it all up, how to purchase some Bitcoin, and then how to move it over to cold storage, as well as figuring out how to and then also how to move it over to cold storage, in addition to moving it over to BlockFi to actually earn interest. So once you have your public and private keys, you can buy and sell Bitcoin on an exchange. Buyers and sellers exchange, USD, Bitcoin, and many other cryptos, and one of the things I like about BlockFi is you can swap assets right within the app. So if you had Bitcoin, and you wanted to swap it for Chainlink, for example, you can just do a swap in the app rather than selling the Bitcoin into cash and then buying the new asset with cash. Now, that being said, not all exchanges are created equally, and you should do your due diligence before deciding on an exchange. That being said, the two most popular ones out there are Coinbase and Gemini. I personally use Coinbase for my purchasing, and then I use BlockFi to earn interest or to do swaps on my cryptos. However, I've also heard a lot of good things about Gemini, so you may want to do additional research on them as well. However, as we proceed here, we're gonna be using Coinbase and BlockFi as our examples because that's what I use. That's what I'm familiar with. And we're gonna be using the Ledger hardware wallet when I show you how to complete cold storage. So when you're actually choosing your cryptocurrency exchange, here are the main factors to consider. Number one, above all else, safety. There have been crypto exchange breaches and hacks in the past, and people have lost millions of dollars. With Coinbase and Gemini, these are massive companies, people have not lost cryptocurrency with them to date. So hopefully that is not the case here. And a lot of the crypto on these exchanges is held in cold storage. That being said, if safety is your absolute priority, then you just put it in a hardware wallet that you have control over and you're 100% safe if you keep all of that information private. So as far as safety goes, all exchanges have the potential to be hacked. However, learn about what safety protocols are in place to prevent this from happening, then look into customer service. Is it easy to get a hold of this group in the case of an emergency? After that, consider the cost. What are the fees you're gonna be paying for your trades? And look at the overall interface, is it easy to get up and running and actually utilize the platform? So Coinbase is the most well-known crypto exchange in the United States. The withdrawal fees are higher than many other platforms out there. However, if you're doing a lot of transactions, you may decide to pay for a service called Coinbase Pro, which may actually be less expensive. Currently, they support 51 different cryptos on the platform. And Coinbase was one of the first movers in the crypto exchange space, but it does lack some of those newer features. Gemini is a safety focused crypto exchange based in the United States, they have yet to experience a significant hack ever to date. They have a similar interface and ease of use to Coinbase. And they also allow you to make purchases using Gemini Pay. Less cryptos are supported, only 33 on that platform and their fee structure is very similar to Coinbase. BlockFi is not a crypto exchange. However, you can buy crypto on the platform, but that's not really the intended use case. And there's not a wide variety of cryptos supported. The primary offering is an interest account for your cryptocurrency giving you two means of making money you can earn from asset appreciation, hopefully your cryptos go up in value while you own them. But you can also earn interest on them. If you're comfortable with that cryptocurrency being loaned out to institutional crypto investors, allowing you to earn interest. And that is up to you whether or not you wanna have your crypto safely in a hardware wallet offline, or if you're comfortable working with a company like BlockFi for that additional kick in earning interest on your crypto. So you can buy your crypto right on BlockFi and then deposit it for interest but I personally purchased my crypto on Coinbase because I like buying other Altcoins that are not supported on BlockFi. And then I simply send any cryptocurrencies that are supported on BlockFi over to the interest bearing account, that way I can earn interest and then, potentially, borrow against those cryptocurrencies if needed. Now, there are a few other ways that you can purchase Bitcoin, but some of these are probably not very much recommended. You can buy Bitcoin directly from local investors. So let's say for example, your buddy owned some Bitcoin and you gave him cash, and he sent it over to you. I've actually done that in the past with purchasing some Ethereum from a friend of mine. So that is possible. And that's what's kind of cool about cryptocurrency is that transactability in the fact that you could literally just sell it to your friend if they gave you cash, and then you sent that over to them. There's also LocalCryptos, and LocalCoinSwap, which are two of the largest peer-to-peer exchanges that you can choose dozens of different payment methods, and you have full control over your Bitcoin with no middleman whatsoever. So you may have the ability to execute at better prices. You're also able to use escrow to ensure the transaction is legit. It's generally slower, however, and less efficient than just buying online. So my thoughts on this, most investors will be better off just sticking to a large exchange like Coinbase or Gemini, you can also purchase on BlockFi, you may end up paying a little bit more in fees, and it may not be the best pricing possible based on the spread but I think that's a cost that is worth it for the convenience personally. However, if you wanna execute at the best possible prices and cut that middleman out, you may want to delve further into these peer-to-peer exchanges. And then we have like the worst possible way to buy Bitcoin. I've done it for a TikTok video and that is utilizing a Bitcoin ATM. So investors are also able to purchase Bitcoin from physical Bitcoin ATMs. And I'll actually have my editor throw up a video of that TikTok right now, just so you guys can see that process. Here's the current price of Bitcoin I'm about to buy, then you just have to go ahead and scan your wallet down below. So I put $10 in after the 10% fee, I'll be getting $9 of Bitcoin to my wallet. So this is one of the few ways to purchase Bitcoin with cash, the Bitcoin is deposited directly into your existing wallet. However, typically there are very high fees about 10% when using a Bitcoin ATM, which is astronomical. Don't really use this unless it's your only possible way of purchasing Bitcoin. The fees are ridiculous, and I don't even understand how it's legal to charge someone that much in fees for purchasing. Now, that being said, there are some crypto buying limitations that you should be familiar with. Online exchanges frequently have limits in place to protect themselves and their users. And some of the most common are trading limits, purchase limits and withdrawal limits. Now a lot of that is based on the level of verification that you have completed. For example, you can simply open up an account on Coinbase without verifying your ID and begin purchasing crypto. But if you decide you want to send it, then you have to verify with photo ID and this is obviously for you know money laundering reasons and just being able to track potential cost basis and things like that if the IRS pulls records. And typically speaking, if you verify more information, they're going to increase trading limits, purchase limits, withdrawal limits, et cetera. BlockFi has a trading limit of 1.2 million per transaction, most of us will be nowhere near that figure. Coinbase has a purchase limit of $25,000 per day. However, that limit drops to 750 per week when using a debit or credit card but don't be a moron, do not buy Bitcoin or cryptocurrency on a credit card. And as I mentioned earlier, the more information you provide to the exchange, the fewer limits you will have on your account and the greatest amount of flexibility. So I always recommend as soon as you open up the exchange, get everything verified that way you'll have full use of the platform. Also there are some important laws to be familiar with surrounding cryptocurrency transactions. First of all, all financial institutions are required to follow a few important customer protection laws. First one KYC, know your customer, requires institutions to verify your identity through multiple means. This is why you need to provide your social security number and legal documents when signing up. Also, we have AML, the anti-money laundering laws. This is a broader set of regulations requiring that all suspicious activity is documented and reported. Essentially, any financial institution will need your personal information like your social and a photo of your ID if you're gonna be buying or moving large amounts of any cryptocurrency, and you should 100% assume that this is being reported to the IRS, you should operate above the table and pay taxes on cryptocurrency capital gains. And it's very important to maintain records of cost basis and different things like that in a spreadsheet or similar document. Now as far as the methods for actually purchasing cryptocurrency on an exchange, there's three primary options. Number one is the ACH transfer. Number two is credit/debit card. And number three is wire transfer. Each method has different pros and cons. Depending on the exchange you use, you may want to have more options. So I actually like linking multiple payment options, just so you have other options available. The fees for each option will also depend based on the exchange and some options will let you buy Bitcoin instantly, while others can take multiple days for your funds to settle. For example, with Coinbase, I use ACH transfers, and there's instant money available up to a certain dollar amount when you deposit, assuming you're verified, which means you're able to invest your money before it clears, allowing you to transact immediately. As mentioned earlier, you're typically going to see the highest fees and lowest purchase limits through credit/debit cards. And I've personally never used wire transfer. So I pretty much exclusively use ACH transfer. But I also have my debit card linked as a backup. So with the credit and debit card, it's typically the most expensive option in terms of fees. Also, buying crypto with a credit card is never a good idea because returns are not guaranteed and paying interest is, so simply put don't do it. The advantage is that it is faster processing typically allows instantaneous purchasing but with lower limits. So if you are in a pinch, you could use this as an option. However I prefer ACH personally. The ACH transfer is by far the most common way to buy. Many exchanges do not charge any fees for ACH. However, it typically takes longer for your funds to settle unless you use a exchange like Coinbase, which essentially loans you the money on a good faith agreement. Gemini may do the same thing, but I am just not sure because I've never used that platform. Generally this is a safer process than using a card because you can securely link your bank account to the exchange, typically via Plaid. There are higher purchase limits than a debit and credit card. But for some even that 15 to 25k daily limit is too low. And I am envious of you guys because that is a lot of money flooding into a crypto. But if you're one of those people, the next option may be for you. So if you're looking to buy tons of Bitcoin, like more than $10,000 or $25,000 per day, you may look into a wire transfer. While there are fees, there are usually no transfer limits, but the process is a bit more involved for you. And it's going to take more time. 99.9% of people are not going to be utilizing this service. So let's just go ahead and move on. So now that we covered the basics of buying Bitcoin and how exchanges work, so now let's talk about storing your Bitcoin. Well, after buying crypto, you need to keep it safe because there is no federal insurance for cryptocurrency. No FDIC, No SIPC. This means it is your responsibility to keep your Bitcoin safe. And we know that crypto exchanges have been hacked in the past. And if your crypto is lost, it is not recoverable and it is gone forever. So you can't just call up your bank to try to get a refund if you lose your Bitcoin or if the exchange is hacked, or if you basically lose your private key. The more control you have over your crypto, the safer, however, it is going to be the lowest, yielding option because if your Bitcoin is just sitting there in a hardware wallet, you can't exactly loan it out and earn any interest on it. So basically the safest place possible for your cryptocurrency is an offline hardware wallet. However, that is not the most profitable place to store it. So let's talk more about the dangers of keeping cryptocurrencies on an exchange. So most exchanges out there hold your Bitcoin or other cryptocurrency in something called a hot wallet. And keeping your crypto in a hot wallet is very risky. This is because these wallets are connected to the internet and your private key could be exposed if there was a hack. Now BlockFi, Coinbase, Gemini, they're all very secure platforms. However, there's always some level of risk that a hack may occur, there is no guarantee in the world. Other smaller exchanges may not be as safe. So that is why you should be very careful when deciding what crypto exchange you work with. And, again, consider if you're not earning interest on crypto, it should most likely just be sitting offline in cold storage. Now the only benefit to keeping your crypto on an exchange is that it requires no extra work to sell it and you also don't have to buy a hardware wallet. However, there is the risk that you could lose that cryptocurrency if there was a breach. In my opinion, there's no real reason to worry about this until you have about $1,000 worth of cryptocurrency. At that point, it's definitely time to consider setting up a hardware wallet. But that is just my two cents based on the cost of a hardware wallet. And so for example, when I ended up selling my Bitcoin to put towards the purchase of my home, it was a bit of a complicated process because I had that cryptocurrency offline in cold storage. So I basically had to send that cryptocurrency from my hardware wallet back to the Coinbase exchange. And then on the Coinbase exchange, I was able to sell that Bitcoin and put it back into US dollar, then I took the US dollar and moved it back to my U.S Bank Account. So it's a little bit longer of a process. If you keep your crypto on the exchange, you don't have to transfer it back out of your hardware wallet, but you are running that risk of a potential breach or hack. Now with the hardware wallet, this is generally the safest way to store your Bitcoin or other cryptocurrency and it's often referred to as well as a cold wallet or cold storage because it is not connected to the internet and is less susceptible to a hack, unless somebody can physically locate the device or your recovery phrase. Crypto cannot be moved without physically having the wallet and your passcode. However, if somebody finds your passcode, they can simply order a new wallet online and tie those two together. So the most important part is not the actual wallet itself. It's the actual recovery phrase or passcode. With this, the Bitcoin is fully under your control, you have custody of it, you create a secret phrase to recover if lost. And it is a random sequence of 20 words, you put it on a piece of paper, what I recommend is cutting it up into pieces, giving it to two different people. But I also set up my recovery phrase on a titanium hardware wallet just in case there was a fire that would not burn, it could be recovered to find that cryptocurrency. I take this stuff very seriously guys, and I try to store my cryptocurrency as safely as possible, assuming I'm not earning interest on it over on BlockFi. Now as far as the hardware wallet goes, it's not very expensive, it's around $59, there's gonna be a link down below if you want to check out the exact hardware wallet I use, which is the Ledger Nano S. It's not very expensive, somewhere around 60 bucks, and it is pretty easy to set up and I'll be walking you through some of those steps later on in this video. Now, just to give you more detail here on BlockFi and their storage of cryptocurrencies, well, keeping your Bitcoin in an interest bearing account like BlockFi is a mix between the two options we discussed before. It's definitely less safe than a hardware wallet because you don't have actual physical custody of your crypto, but it is as convenient as keeping it on an exchange in terms of transactability and the ability to swap currencies. The benefit is that you're earning interest on your Bitcoin and now potentially able to be paid in two different ways instead of just asset appreciation. The downside is you are taking on more risk. However, BlockFi keeps their crypto stored with Gemini, which does have a private insurance policy on their stored crypto. Thankfully that insurance policy has not been needed yet because they have yet to experience any significant hacks. Now that being said guys beyond the storage risks and exchange risks, there are other risks associated with Bitcoin and other cryptos specifically. As a newer asset class, it is still relatively unproven and very volatile. It is also very possible that another crypto could take the throne of Bitcoin based on what we have been seeing this year. There's a lot of speculation maybe that could be Dogecoin. It could be Cardano. There's a lot of new players in the market. And probably I'll be doing another video at some point discussing what Altcoins I am personally buying. Also, guys, as mentioned with the storage risk, if you lose your crypto, also meaning losing your private key or recovery phrase, it is gone forever. If somebody gets your private key, they can steal your Bitcoin and it's gone forever. Also, crypto is very susceptible to big booms and busts. And it has been heavily manipulated in the past, not to mention the utility value of Bitcoin as a currency has yet to be seen based on that volatility. And there is still ongoing regulation risk and risk of restrictions from governments could cause dramatic price movements, not to mention, we've also seen this sort of risk associated with Elon Musk, and whatever he has to say about Bitcoin and cryptos on a given day, contributing to massive price swings. And so if you want the honest truth coming from me as a four year crypto investor, on what's going on with crypto investing in 2021, well, most beginners are going to expect unrealistic returns from cryptocurrency. And many make the mistake of speculating and trying to bet on Bitcoin or other Altcoins looking for 100% returns or more in the short term. Not so much with Bitcoin, but a lot of people are trying to buy Altcoins, like Shiba Inu, for example, and some of these Sheep Coins, I don't even know what they're called. But I've been seeing people losing money left and right on all these random dog coins. And that's the type of speculation that is very dangerous. Keep in mind investing is a marathon, not a sprint. And short term investing is speculating largely, relying on luck, whereas long-term investing is about the underlying utility value or value that something may have. If you personally see value in Bitcoin, it might be something you put your portfolio in, or you just have a better understanding of it and why it has the perceived value that it does. Also, most crypto investors buy and sell at exactly the wrong time, based on psychological factors driving our buying and selling decisions. And also, I do have a quote I like to hear from Richard Branson, he said, "People have made fortunes off Bitcoin, "some have lost money. "It is volatile, "but people make money off of volatility, too." So that is how most people make money with crypto is long-term buy and hold or profiting off of the ongoing volatility. So the next thing I want to talk about here is taxes associated with a cryptocurrency investment. Because at the end of the day, the taxes incurred from investments are not created equally. And there are certain things you may want to take advantage of in the tax code. Basically, the tax system favors long-term investing strategies and you can apply this with cryptocurrency investing as well. And this is why I personally recommend and follow a long-term investing strategy. So your crypto gains can be taxed as ordinary income, or as long-term capital gains. And there can be a huge difference between these two in terms of the amount of money you're actually paying in taxes. So if your crypto falls under the classification of ordinary income, your gains are taxed at the same rate as your wages and this is the highest tax rate you will pay as an investor and it is in your best interest to minimize the amount of taxation as ordinary income. So there's two different types of profits recognized that will fall under ordinary income. First of all, if you do what I do and utilize BlockFi to earn interest on your crypto, that is unfortunately going to be ordinary income no matter what. Also short term capital gains, meaning you buy and sell a cryptocurrency within 365 days and turn a profit, you would pay the maximum possible taxes on those gains. So if you bought something for $3500 and sold it for $4000, a day later, you know you're gonna pay ordinary income tax on $500 short term capital gains. So more information on short term cap gains here guys, if crypto was purchased and sold within 12 months, it is taxed as ordinary income. And depending on what state you live in, this could be as much as 50% in total taxes. So the taxation system favors investors as traders are taxed at the ordinary income rate. So if you wanna minimize the amount of taxes you're paying on your crypto aim to own it for longer than one year to pay long-term capital gains tax. Now with long-term capital gains taxes, you're basically paying either 0%, 15% or 20%. However, this may change based on the new administration. One of the easiest ways right here guys to cut down on your taxes is just to go long and hold your crypto for longer than 12 months, and it's gonna be taxed at long-term capital gains tax rate. That being said, here's some other important details surrounding a cryptocurrency taxation. First of all, you're only taxed when you sell or once a gain or loss is realized. So even if you buy Bitcoin, and you're up a ton of money, if you don't actually sell and realize that gain, you don't pay any taxes, not to mention also the record date and cost basis are used to determine the tax classification and taxable income. So you need to keep track on your own of your cost basis. Now, if you're not doing too many transactions, this really shouldn't be too difficult. But if you're trading left and right, you're gonna want to make sure you keep track of all your transactions. And there's a tax site called TaxBit, which could do this for you at a cost if you plan on doing a large number of crypto transactions. If not just log all of your purchasing in a spreadsheet and keep track of that cost basis that way. Also, if you move your cryptocurrency off of the exchange into a hardware wallet, you will no longer know your cost basis because you could be receiving money into that wallet from all over the place. So cost basis is impossible to track at that point, which is why you need to maintain your own records. Also, let's talk about capital losses with a cryptocurrency investment. If you lose money on crypto, and you recognize a loss by selling this is considered a capital loss. And a capital loss is typically tax deductible and can be used to offset income from a capital gain. So if you made $20,000 on cryptocurrencies, but you lost 10,000 on another investment, that loss would offset that gain. Or if the money that you lost exceeds the money that you made, you can deduct $3,000 of capital losses from your taxes each year. And anything above and beyond that $3,000 can be deducted in the following years. So if you somehow lost like $10,000, in cryptocurrency, in 2021, you can deduct that against your personal income for the next four years going forward. Obviously, guys, that is not the goal here of losing money. But if you do just understand that you can use that to offset gains or potentially income. Also, guys, if you are looking to pay less in taxes, there is a option to invest in Bitcoin through an IRA. The option I like for this is Bitcoin IRA, I have a link for them down in the description below. And I may do a full video in the future just explaining the process of how to buy Bitcoin through a retirement account, which could basically, give you a huge advantage in being able to shelter yourself from Bitcoin related taxes. So that wraps up the presentation here, guys. Let's jump over into my Coinbase account and talk about the process of getting set up over there. Okay, guys, so I'm gonna walk you through the process now of signing up for a Coinbase account, I already have one. So we're just gonna do with some fake information for now, just to show you what that looks like. That being said guys, if you use my affiliate link down below, you're gonna get $5 in free Bitcoin when you sign up. And I'm also going to earn a commission if you do that. And I greatly appreciate that guys, because dozens of hours went into making this video. And that's kind of an easy way to give back to me at no additional cost to you. However, it's completely up to you guys. No worries if you don't want to use it. But this is still what I use and recommend regardless. So right on Coinbase after clicking that link down below, you're gonna drop your email here and do Join Now. So I'm just gonna put a fake email in and get that process moving. So at this point, you're just going to add First Name, Last Name, set a password and certify that you are 18 years or older and include your state. So after that, Coinbase is gonna walk you through step-by-step how to verify your photo ID and get your free $5 in Bitcoin. So now you just click Continue. At this point, they're gonna send you a verification email. So you should go ahead and verify that email. So at this point, the next step here is to set up two-step verification. I already have this set up on my mobile phone, but I'll go ahead and set it up with a Google Voice Number just for demonstration purposes. Okay guys, so at that point, you're gonna link your phone number and enter the authentication code used for two factor authentication on your phone. So after you do that two-step authentication there with your phone now you have to verify your information by including your name, date of birth, address, as well as what you'll be using Coinbase for, what your source of funds is, your employment status, and the last four of your social. Now, since I already have a coin base account, this is as far as I can show you guys. So you just finish up the verification process. And then you're going to link your bank account via Plaid, it's gonna walk you through step-by-step, and then you're gonna earn your free $5 of Bitcoin. So now I'm gonna log into my Coinbase account, and we're going to complete a Bitcoin purchase live. So here we are logging into my Coinbase account. And it's gonna kick back a two-factor authentication code, just to make sure your account is secure. Alrighty guys, so here we are inside of my Coinbase account. And in this account, I have a total value of around $3,000. And that is because the majority of my cryptocurrency is over on BlockFi, that way I can earn interest. I'm gonna show you that next. But let's first discuss Coinbase. So this is the desktop version of the app. But they also have the mobile app, which is awesome as well. But I'm just gonna show you how to do everything over here on desktop. So this right here shows you a view of your Portfolio, as well as overall performance watch lists. They also have options where you can like earn free cryptocurrency by learning about different cryptos, I've never done that myself personally. And then you can also go over here and do recurring buying if you wanna follow dollar cost averaging, which is definitely something I recommend. So my Portfolio right now here is a tiny bit of Bitcoin, here I have about 10 bucks worth and then I have a 99.8% of my Portfolio here in Polygon, which is a cryptocurrency Altcoin that I am personally bullish about. So that being said guys, let's go ahead and purchase some Bitcoin on Coinbase. So what you're gonna do is click on this blue Buy Sell button at the top, and you're gonna come to this screen here. Now Coinbase allows you to buy, sell, or you can convert your currency right here, if you wanna just swap it from one thing to the other, which is really handy. But what we're gonna be doing is purchasing $200 worth of Bitcoin out of my bank account. So it's a one time purchase, and we're gonna type in $200, we're gonna be buying Bitcoin, but you can also select any of these different currencies like Ethereum, Cardano, Uniswap, Bitcoin Cash, Litecoin, Chainlink, Polygon, and then all kinds of other Altcoins that are supported via Coinbase that you can store on this exchange as well. We're gonna do $200 worth of Bitcoin paying with my bank account. So we click on Preview Buy and it's gonna show us what is going to happen. So we will be buying with my bank account, paying a price of $38,486.78 per Bitcoin for a purchase of $197.01. And we're gonna pay Coinbase here a fee of $2.99. So what we're gonna do is click on Buy Now and let it do its thing and just like that guys, our order completed here. So if I go ahead and refresh this, we should see a new value to my Portfolio. And there we go, guys, the Portfolio is now worth $3183.01 since we added our Bitcoin, which is reflected right here. So this wallet here now has a balance of $205.98. And we're gonna send some of that over to a hardware wallet now for cold storage. And we're also gonna send some of it over to BlockFi to demonstrate how you can earn interest on your crypto. Alrighty guys, so now I'm gonna show you the signup process for BlockFi assuming you want to earn interest on the crypto that you purchase. Also, guys, if you use my affiliate link down below, you can get a cryptocurrency bonus by making a certain deposit. So let me just scroll down now and show you guys the bonus tier. So if you deposit anywhere from $100 to $249, you're gonna get a free $15 payout in Bitcoin. If you do $250 up to $1000, you're gonna get $20 in Bitcoin, if you do $1000 up to $5000 basically or $4999 you're gonna get $40 in Bitcoin, $5000 to $9999 you get $75 of free Bitcoin. If you do $10,000 to up to $19,999, you get a free $150 in Bitcoin. And if you deposit 2$0,000 or more, you get $250. I personally transferred over about $13,000 worth so I got a $150 bonus in Bitcoin when I completed my transfer. So if you wanna take advantage of that guys, use that link down below and you can get a bonus in Bitcoin for your deposit and I would earn a small commission as well if you do decide to use that link. So after you click on that link to get that bonus, you're gonna click the yellow Sign Up button and follow this process of filling out your name, email. And you can leave that partner code there, assuming you want to get that bonus, and you want to give me credit for the referral. So let me go ahead and fill this out now with some fake information. So that's as far as I can show you guys with the sign up process there since I already have a BlockFi account, but you're basically going to verify your email. And then I would highly recommend setting up the Google Authenticator two-factor authentication, which it should prompt you to do. And at this point, guys, you don't really have to do much more here, you should verify your identity with your license just so you have full functionality of the app. And this is when you would now be able to send your cryptocurrency from Coinbase over to the BlockFi wallet in order to earn interest. So let me show you guys how to do that now. Okay, guys, so here we are inside of my BlockFi account, and we can see what exactly I have going on here. So right now the total value of my assets here is about 13.8k. It was around 22k before the sell off here with Ethereum. And that is the majority of my Portfolio right now. As you can see, I do have Borrow against this Portfolio. So I do have a loan out against my Ethereum in the amount of $10,200. As I said, I'm just putting that towards home improvements right now. So my active balance here is $9547, that excludes the collateral I have in place on that loan here. And today, I've earned basically $17.71 in interest from my crypto balance. So aside from the collateralized asset there with the Ethereum, these are my other crypto balances here, I have 5799 in Bitcoin, tiny bit of Ethereum, tiny bit in Chainlink and a little bit of Litecoin over here. So let me show you now how you would send your Bitcoin from Coinbase over to BlockFi in order to earn interest. So what you're gonna do from this screen right here is click on the Deposit button assuming you want to deposit Bitcoin. However, if you're looking to deposit other currencies, these are currently the ones that are supported. Bitcoin, Ethereum, Litecoin, Chainlink, PAX Gold, US Dollar Coin, Binance USD, PAX and then GUSD. I'm not familiar with most of these, but I do have these four balances in this account. So let's go ahead and add some Bitcoin by clicking on Deposit. At this point, This right here is the public address. At this point right here, this is your public key, this is your wallet address, or your email address, which you're able to share. And you guys right here are able to see this, if somebody wanted to, they could send Bitcoin right to this address, but they can't take it out. It's only a one way street. Since I'm looking to send my Bitcoin here, I'm gonna go ahead and copy this wallet address, and now switch back over to Coinbase. So now over on Coinbase, I'm gonna want to scroll down to my Bitcoin wallet and click on it. And then I want to click on Send slash Receive. Now I want to go ahead and send $75 worth of Bitcoin over to my BlockFi address. So let's go ahead and do that now. So I'm sending it at $75, and we're going to pay with my Bitcoin wallet, and we're gonna send $75 worth and I'm simply going to paste in the address here. At this point I'm paying with Bitcoin, we can double check and verify I'm receiving to a Bitcoin wallet, because if you were to send Bitcoin to an Ethereum wallet, for example, it would be irrecoverable and lost forever. So you always have to send your crypto over to the correct wallet. At this point, I'm gonna click on Continue. And then it's showing I'm sending $75.15 and I am paying a network fee basically and it should be over there in about 30 minutes. So let's click on Send Now. I now have to confirm that with my phone by entering the two factor code. So there we have it guys, I entered that two factor code and my $75 in Bitcoin was officially sent over to my BlockFi account. Now we wait about 30 minutes and we will see the balance settle over there in BlockFi. So while we're waiting for that to come over, let's go ahead and cover the current interest rates on BlockFi, which are subject to change at any time. Right now on Bitcoin, they're paying a 5% APY. On Ethereum balances, they're paying 4.5% on Litecoin they're paying 5.5%, on Chainlink 4.5% APY, on PAX Gold 4% APY, on the US Dollar Coin that is the highest at 8.6% APY, Binance USD also pays 8.6% APY, PAX also pays 8.6%. And the GUSD also pays 8.6%. I'm not familiar with these myself, the only balances that I hold are Chainlink, Litecoin, Ethereum, and Bitcoin within my BlockFi wallet. Also guys, the transaction showed up under Pending here almost instantaneously showing the deposit here on May 19. And if you want more information, if you click on Transaction Hash, that brings you over to the public blockchain Ledger, we were talking about earlier, where you can see all of this in action. So right now somewhere in the world, there is a Bitcoin miner, verifying this transaction and completing this process of sending some Bitcoin from Coinbase over to BlockFi. And in return, I pay that small network fee to facilitate the transaction and essentially give that miner a kickback for completing this for me. Alrighty, guys, so now I'm gonna talk about the Ledger Nano S Hardware Wallet. And I actually have three of them in front of me right here. And that is because I'm gonna be using one of these as a demo device to set up and I'm gonna be giving two of these away to the viewers here. So if you want to potentially win a free Ledger Nano S, these are all factory sealed right from Ledger, completely legit. All you have to do is basically share this video with a friend and then take a screenshot of you doing that and send that to me over on Instagram @ryanscribnerofficial, make sure you blur out phone numbers and personal information. All you have to do is share it with a friend. And in the next two weeks, I'm gonna pick one person who does that, actually two people rather and they're each going to win a free Ledger Nano S Hardware Wallet. Also guys, if you wanna purchase a Ledger Nano S hardware wallet, I would highly recommend using the link down below directly on the Ledger website because there are a lot of scams out there. And you wanna always make sure that you have a factory seal on your Ledger hardware wallet. So the safest possible way to do that is with the link below doing it directly through the Ledger wallet store. But I'm gonna go ahead and open this bad boy up and we're gonna start the process of setting up a hardware wallet. So I took the rap right off of it, all these, as I said, were sealed and then we're gonna go ahead and open it up and talk about what comes inside. So the first thing is the actual USB device itself, pretty much just looks like this. It has a couple of rocker buttons on top for making selections and a USB port on the bottom. Beyond that in the packaging, you have the bottom that comes out here and then you're going to find your different paperwork and other things that you may need. So this also comes with this free lanyard that you may want to attach. I personally am not gonna do that. And then another lanyard if you want to potentially wear your wallet around your neck that way nobody could ever lose it, but that seems crazy. And then a ring here if you want that as well and then a USB card. Pretty much you can set everything aside for now. What you're going to need though, is just the USB cord, as well as the wallet itself and then this packet of information right here. So when you open up this envelope, it's gonna come with a couple of different things. You have three different recovery sheets for you to record your recovery phrase. It also comes with instructions on getting started which is going to start.ledgerwallet.com so we'll go ahead and do that on my computer now. Okay guys, so here we are on start.ledgerwallet.com. And we're gonna go ahead and follow the setup instructions now. So step number one is get Ledger Live to start setting up your device. I'm using this on my Mac. So we'll click on Get the Ledger Live App and then click on Mac. So all I did so far is go to that website, download Ledger Live, install it and now here I am getting started with the Ledger app itself. So we're gonna click on the blue Get Started button. At this point, you just have to go ahead and accept their different Terms of Use and Privacy Policy. Obviously read that very carefully. And then you decide on your device. So as we can see right here, this is the Ledger Nano S, that's what we're gonna go ahead and select. So let's pick Ledger Nano S and then continue. Hello first time using your Ledger Nano S? That is the case. So let's click on First Use, this is gonna now walk us through the basics of getting it set up and explaining how this is going to work. Explaining the private key and a lot of the things that we have already covered. So now after you read through that, click on the blue Let's Do This button. And honestly guys, Ledger has made this way easier than it was When I started three years ago, setting up a hardware wallet. They said it is gonna take about 30 minutes, you should grab a pen to write with and stay alone, and in a safe, quiet environment. Also, guys, don't do something like this in public, where somebody could be potentially watching you or jotting down your recovery phrase. If somebody gets this phrase, they can get anything you have in your wallet and clear you right out in a matter of seconds. So what we're gonna do now is actually plug the Ledger wallet in. So you basically have a USB port on the bottom, and it comes with a USB cord. So we go ahead and push that into the bottom. And then you plug the other end of the USB right into your computer. And as soon as you do that, you start getting this blue flash on the Ledger unit itself, showing you that it's actually in use. And it says, Welcome to Ledger Nano S, and we press the right rocker to continue. So the first thing you have to determine is going to be your PIN code, which is a four to eight digit number that you should store safely and you can't forget this code. If you do forget it, you can use your recovery sheet to recover it. But if you lose both of these, you're completely SOL. So this is where you set that pin code, you check the box saying that you understand, that you have to choose it yourself and keep it safe, and then set up your PIN code on the device itself. So I'm gonna do that now. And I'm not actually gonna share this with anybody, this wallet, so we're just gonna set it as 1234. And then after you set the code, you have to confirm the PIN code once more. And so now it's gonna go word by word, and give you 24 words to write down on the sheet. I'm gonna show you guys because I'm not gonna put much of any crypto in here I'm actually gonna move it out as soon as I'm done with the video. So if you want to hack me, you guys can but there's gonna be no cryptocurrency in this wallet. Anyway, let me write those words down now. Okay, guys, so I just wrote down my 24 word recovery phrase here. If you want to try to get a good look at it, you can, as I said, there's not gonna be any cryptocurrency in there, but if you want to try to steal it, go right ahead. Obviously guys, you don't wanna show this to anybody. And you don't want to share your pin with anybody either. And this is all somebody would need to get access to all the cryptocurrency held within this wallet. So what I recommend doing is taking this sheet itself, wrapping it in packing tape, cutting it down the middle, and then giving each piece to one trusted person each. That way you need both pieces to actually recover this and each person with half of the card can't necessarily do anything unless they work together. But that's why you do this with a trusted friend. Also, we're gonna talk about titanium wallets which is an additional step seeing as this is paper and it could be burned or destroyed. And then at this point you have to confirm your recovery phrase, which is a very tedious process, you got to confirm all 24 of those words to prove that you actually wrote it down. Okay, guys, so it took me about five minutes to put in all of those selections and verify that phrase. Now it is processing and finishing up the setup here for the Ledger. So I'll go ahead and click Continue. We already did the recovery phrase step. So I will continue that as well. We wrote that all down, confirmed the phrase. Now we are all set, and we are ready. And basically now it's actually gonna have you answer a short quiz this is totally new to me to see if you understand how this works. So as a Ledger user, my crypto is stored on the blockchain or on the nano, the answer is actually on the blockchain. Okay, the next question here, if my recovery phrase is no longer secure, or private, no problem, Ledger can send me a copy or my crypto is no longer safe, and I need to transfer them to a secure place. That is, of course the answer. And then the last question here, when I connect my Nano to the Ledger app my private key is? And the answer is still offline. There are the answers to that quiz you successfully passed. So now I got a confirmation saying my device is now ready. And now we can press both buttons to enter the dashboard. And we'll click Next Step over here on my computer. Now it's gonna do a quick check to make sure this is a genuine Ledger Nano S. You'll see this inside of the welcome papers that you get. It says right here: Did you notice there is no anti-tampering sticker on this box? A cryptographic mechanism checks the integrity of your Ledger's device internal software each time it is powered on. The secure element chip prevents any interception or physical replacement attempt. This is basically how it verifies it is a legitimate device. And that happens every time that you plug it in and connect it to your Ledger dashboard. So let's go ahead and have it check my Ledger now. And we got confirmation that this Ledger Nano S is genuine and we are ready to use Ledger Live. So let's press Continue. Now we have to add an account to get started. And we wanna start off with a Bitcoin wallet because that is what we are looking to store. But as you can see, there are tons of different wallets available, hundreds of them available through the Ledger Nano S. So let's go ahead and use Bitcoin right here. And I will press Continue. At this point, I now have to open the Bitcoin app over here, which means I have to install it. So we select the button over here that says Install App, which we have to do over in the Ledger Manager, over on our computer. Now before I do that, I wanna go ahead and update the firmware to the most current firmware on this device. Checking the box saying I have my recovery phrase before we proceed. So at this point, the Ledger is just performing the update. This should take around two to three minutes. And you'll have to confirm your pin in order to complete that process. So it successfully completed and now I have to open up my Ledger using my pin. And now we're gonna go ahead and install some apps on our newly updated device. And for the time being, the only thing we have to install is that Bitcoin wallet for demonstration purposes. So we click on Bitcoin and we click on Install, and it's going to go ahead and do that for us now. So it shows us confirmation that the app installed successfully and we can now add our Bitcoin accounts. So let me click on Manage My Accounts. At this point, I'm setting up a Bitcoin wallet. So I click Continue, and then on my device, I have to open up the Bitcoin app with confirmation. The whole point of this is you always have to confirm with the buttons on the side before you can really do anything with the Ledger Manager giving it that additional step where somebody could not remotely hack your device without pressing these buttons. And right now it is setting up a Bitcoin wallet and synchronizing that. So just go ahead and let this go automatically. So it took about 20 seconds to synchronize the account. Now it's all set, so we click on the blue button for Add Account and the account was added successfully, meaning we are ready to send the Bitcoin from Coinbase over to our Ledger hardware Wallet for offline storage. So at this point, we see a $0 balance in our wallet. So let's go over here to Accounts and we see our Bitcoin wallet. Once we do that it shows us there are no crypto assets yet so we're gonna go ahead and click on the blue Receive button and we want to receive money to our Bitcoin 1 account. So we click Continue. At that point, we have to verify the address on our Ledger wallet and make sure it matches the one shown here and you do that by using the buttons on top. So the address matched up, I'm gonna go ahead and approve it and now we are ready to receive Bitcoin. So what you're basically gonna do here is take this address for Bitcoin 1 and you're gonna click on this Copy button right here and now that address has been copied. Now we're gonna jump over to Coinbase and send some Bitcoin to this wallet. And just like earlier guys, this is gonna be pretty much the same process, you're gonna go over here to Send/Receive, and we wanna make sure that we are paying or sending our Bitcoin. We're gonna go ahead and send $10 worth of Bitcoin over to our hardware wallet, which we copied, so we just paste that address in there. And then we click Continue. So now at the confirmation, it shows us the total cost with network fees is gonna be $11.34. So the more you send, it's typically going to be less expensive, but we're just doing it for demonstration purposes. So now we click the blue Send Now button. At this point, we have to enter again, that two-step verification code from your device. Okay, guys, so we just got confirmation from Coinbase that we successfully sent over our $9.97 to our hardware wallet. So now we just wait about 30 minutes for that transaction to confirm over on Ledger Live. Okay, guys, so just like that, we now have that $9.94 that came over and it actually has gone up a tiny bit in value since then. So we have now successfully stored that $9.96 on our Ledger Nano S Wallet in cold storage. The only way to access this is by utilizing this device with your pin or by having this recovery sheet right here. So again, keep those two pieces of information stored offline completely and safely. I recommend splitting this up across two people. Or you can also get a titanium wallet if you want to be ultra safe. And that's gonna be linked up on Amazon, the exact one I used, down in the description below. It basically comes with a bunch of metal numbers and you make a metal version of this recovery sheet and you store it somewhere safe. And then even if there was a fire, you would still be able to recover that and recover your cryptocurrency even if the paper was destroyed, and the USB itself was completely destroyed. Now as mentioned, this is going to be the safest way to store your Bitcoin and crypto. However, you're not able to earn interest directly through the Ledger platform. They may partner with somebody here because they offer a lending program, but I'm not familiar with that. I personally use BlockFi for my crypto lending. And then of course, if you wanted to sell this, you can sell through the Ledger app, but I would just personally sell through Coinbase. You would send this crypto back out of this wallet and into the Coinbase wallet and then that would be allowing you to transact and put it back into US dollar. Or if you wanted to send crypto from your Ledger wallet over to your BlockFi account, or back and forth in order to earn interest you're able to do that as well. So anyways guys, that is gonna wrap up this video. Thank you so much for tuning in. As I had mentioned earlier, I am giving away two completely sealed Ledger Nano S Hardware Wallets to two people who basically share this video with a friend. What I'm asking you to do is basically send a text or a message over to a friend, take a screenshot of that and send that to me on Instagram @ryanscribnerofficial. Of course blur out any personal information. And honestly I think this is one of the best resources I've seen out there on Bitcoin for Beginners. I certainly hope you guys agree. So hopefully by sharing it with other people, we can provide more value to them and give them a easier way to learn about how to potentially invest in Bitcoin and other cryptos. Thank you guys so much for tuning in. If you wanna stay updated on my investment portfolios and what I'm doing, make sure you subscribe, hit that bell for future notifications, drop a like if you made it all the way to the end. And as always, I hope to see you in the next video.
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Channel: Ryan Scribner
Views: 6,626
Rating: 4.8682632 out of 5
Keywords: how to buy bitcoin, how to buy bitcoin on coinbase, where to buy bitcoin, bitcoin hardware wallet, bitcoin hard wallet, how to store bitcoin, how to store bitcoin offline, how to store bitcoin on usb, ledger, ledger nano s, bitcoin, investing in bitcoin, how to buy bitcoin with debit card, how to buy bitcoin cash app, how to buy bitcoin with credit card, coinbase review, tutorial, how to buy bitcoin 2021, how to buy bitcoin in 2021, bitcoin hardware wallet 2021, 2021, bitcoin 2021
Id: jJo5vWOtLXM
Channel Id: undefined
Length: 90min 45sec (5445 seconds)
Published: Tue May 25 2021
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