This isn’t a guide to explain “the why.” If you’re not already bought into crypto, then you must go on that journey on your own. Once you’re ready to dip your toes in and don’t know where to begin, let this guide help you get started.
The world of crypto is very much a work in progress. It’s exciting because people are building in realtime, right in the open, with new projects launching weekly. There are a ton of different ways to get involved, and I believe that the Ethereum network is presently one of the most engaging spaces to immerse yourself in. Most of the hype projects you see trending on Twitter are being built within the Ethereum ecosystem. Though there are endless entry points, the path this guide outlines is a good place to start.
This guide will walk you through how to:
- Buy your very first cryptocurrency
- Set up a wallet
- Send cryptocurrency (ETH) to your wallet
- Prosper
Some notes:
- THIS IS NOT FINANCIAL ADVICE! Following the steps in this guide requires you to use your own money. It is absolutely possible that you may lose that money. Do not invest more than you can afford to lose.
- The fiat currency I will be focusing on is USD, but you could easily translate it to the fiat currency of your respective country.
A Very Quick Primer Because There is a Lot
💫 If your only exposure to crypto up until this point has been Bitcoin, it’s important to know that there is a difference between it and Ethereum. Bitcoin is currently *just* a currency whereas Ethereum is a system that includes its own currency, the ability to create applications using the system, and a vibrant developer ecosystem.
💫 You may have heard that crypto is decentralized, but what does that mean? Decentralization is interesting because it’s a way for money to exist online, detached from a single, central institution like a government or a traditional financial institution. It means that you could be in control of your money, with no middlemen, and the value would be determined by the people who own the same currency. Right now, all of our USD is government-backed, so its value is determined by the US economy. Not that we have much control over how any types of markets move, but a lot of people feel bad about the value of their money being tied to (and so, controlled) by the government of the country they happen to live in. Borders are stupid! Also, your money in the bank is not actually there for you whenever you want it because banks use your money to make themselves money. If something happens to the bank, it is not guaranteed that you will get your money back. The list goes on and on!
💫 You may have seen the words DeFi and web3 floating around. Both concepts point to the idea of building new, decentralized systems for both financial structures and the internet. The backbone of these decentralized systems will be blockchain networks, like Ethereum. In order to participate in most of the popular projects within the DeFi space right now, you will need to leverage Ethereum’s currency, Ether (ETH). ETH is, under the hood, used for computing transactions and transaction fees. On its surface, ETH is money that you can send, receive, use to pay for things, lose!, etc.
💫 Coinbase, Gemini, and Robinhood are exchanges, not wallets. \n (Coinbase does have a separate wallet app called Coinbase Wallet, which is confusing. It’s not super fleshed out yet and there are better wallets out there so don’t worry about it for now.)
💫 All crypto is very volatile and will probably continue to be for a long time. Values of coins/tokens/currencies can fluctuate in the hundreds and thousands on a daily basis. Like with any monetary investment, there will inevitably be ups and downs, so if you’re risk averse then this may not be for you.
💫 In order to participate in most of crypto, especially in the FOMO-inducing projects and communities that you see everyone tweeting about (like investing in expensive NFTs, for example), you have to shell out some money. Crypto today is pay-to-play. This unfortunate, high (monetary) barrier to entry is definitely problematic.
💫 Community building is an important aspect of crypto. Twitter, Discord, and Telegram seem to be the main social apps of choice for people involved.
Getting Set Up
Step 1: Trade US Dollars for ETH
Because the cool crypto projects at the moment are pay-to-play, you need some cryptocurrency to get started. There are several different ways to purchase crypto, but the easiest would be to use a crypto exchange like Coinbase or Gemini. Oftentimes when you travel to a foreign country, you need to exchange USD for that country’s currency so that you can pay for things in that country’s economic ecosystem. The concept is the same when you trade USD for crypto through Coinbase or Gemini (or any fiat onramp).
You’ll have to link your bank account or debit card to trade funds. The user flows are pretty straight forward: you select the currency you’re interested in purchasing > press Trade > press Buy > continue on with your swap. I recommend buying ETH since it will unlock the doors to most DeFi projects and will give you access to ETH wallets. FYI, there will be an annoying exchange/transaction fee if you use Coinbase or Gemini.
CONGRATULATIONS! You now own your very first crypto!!!
Important things to know at this step:
- Despite transaction fees, I’d suggest starting small while you’re learning. Do not throw in more than you can afford to lose while you are in your learning phase.
- The crypto you buy is living on the exchange itself. Think about how when someone pays you on Venmo, it sits in your Venmo balance (so within the Venmo platform) until you withdraw your funds. The same notion applies here. At step 3, you will be withdrawing the crypto to your own wallet.
- You can actually have/buy no ETH and still create a wallet. You won’t be able to do much without ETH since you need to pay for gas fees (I will cover what that is later) per transaction, but people/projects can send things to your wallet and you can participate in some free projects.
Step 2: Set up a wallet
IRL, your wallet generally consists of some cash, some credit cards, a debit card, some random rewards cards you picked up at the movie theater and boba shop, and your drivers license (ID). An Ethereum wallet is similar in concept. Your wallet address stores your identification, and instead of having to create unique accounts on all Ethereum apps, you use your one wallet address to identify yourself everywhere. You also use your wallet address to pay for things, or collect rewards. Using most wallets, you can send and receive Ethereum objects (ETH, tokens, coins, NFTs, etc), perform transactions (like buy, sell, and trade things), log into platforms, and interact with different projects.
If I’m being honest, at the moment, most wallets leave a lot to be desired, and the user experience of using, connecting, and transacting with most wallets is rough. For the purposes of this guide I will help you get set up with MetaMask as that’s my current wallet of choice. MetaMask is very popular in the industry and supported by almost every DeFi app. The UX can be tricky, and I would encourage you to move slowly and read everything before confirming anything while using it.
Visit the MetaMask website and download the MetaMask Chrome extension. There is also a MetaMask mobile app, but I prefer and recommend starting with the Chrome extension for ease of use. Once installed, go through the flow of creating your wallet address.
**IMPORTANT** You will be given a secret recovery phrase. This is completely different from a regular password, it is the master key to your vault, and there is no way to recover it if you lose it. MAKE SURE YOU SAVE IT. Store it somewhere SAFE that could not be easily hackable - ideally not on a computer at all. Don’t email it to yourself. Don’t text it to yourself on your “end-to-end encrypted” messaging app. Don’t send it to your friend. If you somehow forget your wallet password or download a new instance of MetaMask on a new device, you will be prompted to input your secret recovery phrase to access your wallet. If you no longer have your secret recovery phrase, you will not be able to access your wallet. This phrase is all anyone needs to fully control your wallet, with no ability to stop them. I cannot stress enough how important it is to SAVE this and to never share it with anyone. This can be scary at first (and I have learned the hard way), but it’s what allows you to have full control of your money. **IMPORTANT**
After you save your secret recovery phrase in a super secret and safe place (AGAIN, DO NOT SKIP THIS), you’ll create a wallet password, and then voila! You have your first wallet set up! Your wallet address will look like some wacky, long jumble of letters and numbers, most likely starting with “0x”. That’s your address, your identity! Welcome to ~the metaverse~
At this point it’s important to understand that you alone are fully accountable for your wallet. What separates crypto from traditional finance and banking is that there is no bank or entity that is responsible for your wallet, only you. That means if you lose your secret recovery phrase, or you get scammed/hacked, there is no support person to call to help you retrieve your information, there is no insurance company to call to claim your lost money. I know I sound like a broken record, but again: only put in as much money as you’re ok with possibly losing.
Step 3: Withdrawing your ETH from your crypto exchange to your wallet
As I mentioned earlier, the ETH you own is hanging out in the place that you exchanged it, and you need to move it to your personal wallet.
Note: you can only send ETH to your ETH wallet (in this case, MetaMask). If in step 1 you chose to buy another currency like Bitcoin or Litecoin, you will have to convert it to ETH first.
Head back to the crypto exchange you bought ETH with at step 1. You’ll want to select the option to “Withdraw” and then input the amount of ETH you want to withdraw to your wallet. The exchange will then prompt you for the address you want to send that crypto to. Remember the long wallet address you created on MetaMask that started with “0x”? That’s what you input. That is YOUR wallet address, where you will send your crypto. You will then have to confirm your transaction, and within moments, your crypto wallet will be ready to go!
Additional note: sometimes there are very long wait times when transferring ETH from exchange to wallet. Like longer than 1-5 minutes. This is scary and confusing as we are used to instantaneous feedback from software, especially when dealing with money. Sometimes folks accidentally end up buying more ETH because they think their transactions didn’t go through. I’d say that with all transactions, you should err on the side of waiting for a while instead of trying to move fast.
Another Very Quick Primer Because You Will Encounter New Confusing Things
💫 GAS FEES, BABY! The bane of transacting on Ethereum today! NGL, when I was first getting started, I thought people were referring to actual, IRL gasoline whenever they talked about gas fees. Gas fees actually refer to Ethereum network transaction fees. They are payments to compensate for the computational energy used to process and validate transactions on the Ethereum blockchain. You will inevitably encounter “gas fees” as you use your MetaMask wallet, and the fees will often be ridiculously high (in the several hundreds), fluctuating rapidly when there is high usage or activity on Ethereum’s network. You will be paying gas fees every time you perform a transaction, including when you buy ETH. Even projects that are free to participate in (like Loot being free to mint) will still require gas fees to mint. This is changing and being fixed soon, and that’s a whole different thing to get into, but just know that high gas fees are another painful barrier to entry for everyone right now.
💫 There are scams galore!!!! The team at Rainbow (another cool mobile wallet to try out when you feel comfortable) wrote these great guides for How to Avoid Crypto Scams and How to Protect Your Ethereum Wallet and I highly recommend reading both before you start doing anything with your wallet.
Getting the Party Started
There are so many things you can do now that you have some ETH in your wallet! A route that many people first take is getting involved with lending, trading, and other (confusing) financial transactions. In an effort to keep this as beginner as possible, here are some less financially motivated things you can try:
You can create a .eth wallet address!
These are ENS domains. They translate your wallet address (that long, jumbled string that begins with “0x”) to something human-memorable. A common practice is to get yourname.eth, or randomword.eth. With an ENS domain, you can easily link your ENS in places that require you to input your wallet address without having to go back to your wallet to copy the long address string.
You can buy your first NFT!
NFTs are huge drivers of hype (and cashflow) in the system at the moment. If you’ve finally moved past the “but it’s just a jpeg” phase of your crypto journey, why not invest in some digital art? Popular NFT platforms include Foundation, Zora, and OpenSea. Support your favorite artists!
You can participate in the $WRITE race on Mirror!
Mirror is one project that you don’t have to spend any money to get involved with, and it’s what this blog is built on! Think Substack but on the blockchain. You’ll have to win an upvoting contest ($WRITE race) to receive the ability to create your Mirror publication (which could take some time and some heavy PR), but the community, the writing, and the features on Mirror are very inspiring and worth the effort!
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My hope in writing this guide was to make crypto feel more accessible and approachable! Hopefully this helped you get set up and started with your crypto journey. If you have any additional questions or concerns, feel free to reach out at @ikasliwal on Twitter. Good luck, have fun!
💓 Huge thanks to James, Janak, Tareq, Jeanette, Jonathan, Chris, Alaa, Morgane, Drew, David, and Kanan for feedback and edits. Shout out to Dame for getting me set up with Mirror and being an all around great guy.
Support me as an author and/or experience buying your first NFT with some artwork that represents this piece :)