I make regular investments in digital currencies. In this post I’ll describe why I do this and how I invest.
What is Decentralized Investing?
Decentralized investing is the act of buying bitcoins directly at the source (not through your bank) for a lower price and then reselling your savings to your bank account via a smart contract. It sounds complicated, but the concept is simple: instead of having to wait for someone to sell bitcoins for the desired price, you are actually exchanging your savings directly with a third party.
The process is similar to a stock brokerage. In fact, I have a website dedicated to bitcoin investments that I use to list some investment opportunities and review some cryptocurrency offerings. This is how you can access your savings:
As with any stock brokerage, a stock brokerage costs money. There’s a fee for every buy order, so you might expect to pay anywhere between $5-10. When you buy your first bitcoin, the investment is small and there will be little to no impact on your portfolio.
However, once your investment begins to grow, it’s more of a hassle to sell. This is where a third party step comes into play. The third party is a market maker that buys and sells bitcoins on your behalf and resells your savings at a lower price to you, effectively making the buy order in your favor.
I use Coinbase as my third party broker. Coinbase is a company based in San Francisco that offers bitcoin trading to retail investors, including those in the US, UK, Australia, and Canada. You can use Coinbase to buy bitcoin directly in your wallet and take advantage of one of the market makers to create more profitable buy and sells orders.
How do I invest?
The best part is that investing is completely free. There are no fees or commissions. Instead, when I buy bitcoin or exchange my bitcoin to BTC to other cryptocurrencies, the money is going to Coinbase.
To help you get started with this process, below I’ve taken a few simple steps to explain the process:
1. Get bitcoins
I buy bitcoin on CoinMarketCap – a website that helps you get a wide selection of bitcoins for just $0.01 to $0.5. It’s a solid place to start. Don’t worry, there aren’t too many people there buying coins.
Once I’m ready to buy some bitcoins, I visit my Coinbase wallet. You can use Coinbase to
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