WEBVTT

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all right so you've watched mining adventures part one two and three you've

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got your dank mining rig and an asic or two and you are well on your way to

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becoming crypto rich but how do you keep those sweet bitcoins

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and altcoins safe and for that matter if you're not necessarily into buying a

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bunch of hardware how do you just speculate on the coins buying and

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selling them let's find out

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but first let's tell you guys about ek water blocks ek's mlc phoenix lineup is

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designed around quick disconnect couplings and brings a modular approach

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to connecting and expanding your loop learn more at the link below

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so if you've already been mining you're likely withdrawing your rewards to an

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exchange be it gdax kraken binance or

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any of the other few hundred exchanges out there

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or you might be using a wallet on your pc

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now most casuals will probably stick with the former because being able to

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sell without moving your funds from your local wallet to an exchange can actually

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save both time and money in transfer fees

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however there are some serious drawbacks

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to this approach first and most importantly you are not

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in control of your private keys

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what's a private key ah i thought you'd never ask

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okay so i'm gonna use bitcoin as an example

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in layman's terms a bitcoin address that

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string of numbers and letters is kind of like a see-through donation container at

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the local mcdonald's there's a slot in the top so anyone can see how much is in

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it and anyone who knows the address can put money in

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but if somebody wanted to get money out like to transfer funds to a friend or to

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buy something they would need the private key to open up the box signing

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the transaction now there are a couple of exceptions to

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this for example monero makes use of ring signatures to hide balances and

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transaction amounts but most cryptocurrencies are fundamentally

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similar in this way so then when your funds are in a wallet

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on your pc the private keys are owned

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and can be encrypted by you so if there

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is a fork a duplication of the existing

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blockchain with whatever new and different features that the duplicator

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may desire you can export your private keys and then import them into the forks

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wallet to get access to the duplicated funds

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if your funds are on an exchange however support for forks is completely up to

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them because they are in control of the private key so let's look at bitcoin

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gold as an example of why this matters

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many exchanges chose to not support this fork outright so many people missed out

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on what was essentially free bitcoin gold because they were not holding their

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own private keys at the time of the fork

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now either of those approaches though even with those drawbacks is probably fine

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for casual miners who aren't holding more than a couple hundred dollars worth

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that is as long as they can afford to lose what they have more on this later

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for larger scale miners and investors though something called a cold wallet is

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basically an essential tool now to be cold a wallet cannot have an

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active network connection this makes it nearly impossible to hack

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now some people will just use a network gapped computer so it's unplugged with

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no wi-fi with normal software wallets

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and then a system of either webcams and qr codes or thumb drives to complete

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their transactions but this method can be kind of a hassle so many people with

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large crypto holdings are using what's called a hardware wallet these come in

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the form of little devices with physical security prompts like the ledger nano s

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or tresor once this device is plugged into a pc

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you enter a pin code open up a companion app and then you go about your business

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now it should be noted that even the methods that we just outlined do carry

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some risk but if you think about it so does

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putting money in a bank so you know your your pc's drive could die

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you could lose your hardware wallet or

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in both cases you could forget your password but

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as long as you back up your wallet and you keep your backup codes somewhere

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safe a safety deposit box in a bank is a pretty good bet you should be okay

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all right then so now that your cryptos are safe let's talk about buying and

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selling though i really need to preface

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this with a quick warning we are not endorsing any of the exchanges that i'm

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about to mention and i personally would not recommend buying cryptocurrency

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unless you know what you're doing and you are comfortable losing literally

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all of the money you spent like literally like this

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gone alright there is a very public history of

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exchanges disappearing overnight or being hacked and losing anywhere from a

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lot to all of their users money so be

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safe with that out of the way there are a ton

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of exchanges out there let's look at one of the most mainstream ones coinbase

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it's fairly limited in features but should work pretty well for casual

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buyers the process is pretty simple just hook up your bank account debit card or

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paypal account and you are free to buy

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and sell cryptocurrency up to your limit

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and you can raise your limits by doing additional verification with the

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exchange but this simplicity comes at the cost of

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pretty high fees nearly four percent for debit and credit transactions and i

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should also point out that coinbase has a history of freezing trading during

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high traffic times so take that as you

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will some of the more pro oriented exchanges

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will charge a small fixed fee of a few dollars for bank transfers in and out

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and then cryptocurrency transfer fees are typically dependent on that

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currency's specific network fees so bitcoin will likely have a fee of a few

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dollars while something like zcash will have almost no fee at all

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these exchanges like binance gdax bittrex poloniex cryptopia and bitfinex

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also have crypto to crypto trading pairs

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so you can actually take uh your bitcoin and then turn that into litecoin without

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having to first go to a fiat currency this helps you save some fees and is

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pretty snazzy now if you're not super concerned with getting the best possible

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rate a market trade can be a pretty easy way to go you just

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pick how much you want to buy or sell

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and then the trade will transact at the current market rate

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just remember that especially for very large amounts that that rate can

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actually change literally as your transactions are going through so you

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might end up paying more or getting less than you initially expected

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now limit trades these allow you to set the price point

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that you want your trade to execute at meaning that you may actually be able to

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get a slightly better rate or if things go the other way you might

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end up with nothing going through at all some exchanges allow what's called

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margin trading in this situation you can auto magically

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borrow money from the exchange to leverage your bet based on a multiplier

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so let's say you wanted to margin trade a thousand dollars with a leverage of

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two to one you would essentially be trading a thousand dollars plus another

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thousand dollars borrowed from the exchange and then you would be charged

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interest on it in most cases and the benefit is that you could double

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your profit or the drawback is that you could still

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lose all that money and still need to pay the stuff that you borrowed back so

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unless you're a seasoned gambler excuse me uh trader we would recommend staying

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away from margin trading in conclusion trading can be a fun way

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to play around with some disposable income but again i think i've said this before

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but i would caution against using any money that could seriously negatively

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impact your life if you were to lose it so be safe and probably don't buy any

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so yeah

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i fix it then you know those guys really like to take stuff apart and teach

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forever so thanks for watching guys if this

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video sucked you know what to do but if it's awesome get subscribed hit that

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like button or check out the link to where to buy the stuff we featured in the video description except don't buy

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the stuff we featured unless you can afford to lose that money yeah also

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linked in the description is our merch store which has cool shirts like this one and our community forum which you

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should totally join i think an ifixit kit is probably a

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better investment than cryptocurrency all you have to do is like a few device

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repairs for people and you'll get that investment right back several times over

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uh where'd that money go