Cryptocurrencies - an Idiots guide

[Sir Snaz]

Hi all .........wondered if there are any crypto specialists on here that could explain to an old luddite, in very janet and john language, how to get started with them?

and I am talking REAL basic stuff .....ive had a quick look this morning but I am still stuck at the first hurdle of buying some ......

Are there any websites or books or seminars that could give me a really good grounding?

thanks in advance

snaz

[Sir Snaz]

bloomen said:

Well, I've been obsessing for several hours a day since 2012 or so, so might know a thing or two.

What basic things would you like to know? Purely how to buy and store them? Do you have some grounding in the principles of what they're about?

Edited by bloomen on Tuesday 9th May 22:58

Hi Bloomen ...thanks for the reply ......

I have been doing a fair bit of research over the last few days .... but really want some sanity checks ....this is all a very new arena for me .....and I don't mind admitting that some of the jargon (and even, if I am honest, some of the concepts) I really don't understand ...and that scares me ..

To give you some background, having traded FIAT FX/FXO for the last 20 odd years ....I have always taken the 'asset backed' nature of FIAT for granted ......... but I believe all of the QE, regulation and algo based trading (within the FIAT trading concept) we have seen in the last 10 years has broken this system beyond repair, and market fundamentals just don't exist any more. its time to look elsewhere ....

So here is where i need help:-

I think I understand the reasoning behind cryptocurrencies( instantaneous, peer to peer, non reversable, proof based instead of trust based - have I missed anything?)
Is my understanding correct for all of the different cryptos? ......not just BTC?.....and if there are differences between BTC, ETH, DASH etc etc etc what are they?

My understanding of 'mining', and how people make money by doing this is very hazy .......am I right in saying that people are rewarded for 'solving' sums? ...and if so what do these 'sums' relate too? also what happens when all the sums are solved (ie when the 21million mark is reached).

As above, I understand that there will only ever be 21mio Bitcoins. Is this a proper line in the sand definite number? .....or could there ever be a scenario where this limit is increased?
As an addendum to this question, is this concept the same for all cryptocurrencies?....and if so who decides on the limit?

I know that BTC are accepted as payment by a fair few retailers now, what about the others? ...I can't seem to find any retailers that take Litecoins or Etherium for example? .......does this mean that these are not 'real world' viable payment options, and only exist as an electronic concept?

More practically, I understand that I will need a 'wallet' for my BTC etc etc - what are the most secure wallets out there at the moment ( I am thinking cloud based - I will Lose a USB stick!!!)?
How do I actually go about buying some bitcoins and transfer these bitcoins to my wallet? is it as simple as cutting and pasting a blockchain code or QR code?

In terms of trading these cryptos, I have looked at sites like Kraken and Poloniex (are these good?) ...Kraken appears to let you deposit FIAT for crypto, where as Poloniex seems to only let you transfer cryptos from a wallet ? (I take it Kraken would become a form of wallet in this instance?)
I am obviously aware of the Mt Geox scandal, are there any safe guards out there that could mitigate exposure in another such event?

Now a theoretical question, taxation?.......if, for example, I seeded a BTC trading account with £100.00, and managed to turn that investment into say £15000.00, which I then withdrew to my 'real world' account - is there a capital gains issue? (as I am guessing none of these exchanges are set up for spread betting?).

Thinking bigger (and thinking in luddite FIAT terms) what is the practical depth of the respective crypto markets? .......for example is $10mio (equivilant) a market moving amount in BTC?

I have loads more questions flashing about my noggin ......but the above would really help me out ......


thanks in advance
snaz

[Sir Snaz]

Bloomen, Behemoth .....thank you very much for your input on this ...its such an interesting space, I am just very wary of getting caught up in the euphoria that often goes along with new things and missing the pitfalls .......so your insights are invaluable .....
I am sure that I will have other greenhorn questions over the next few weeks learning curve ......so expect some more idiotic questions!

Once again my thanks

Snaz

[Sir Snaz]

bloomen said:

But even with that it's still only really practical for businesses to use it as value transfer, not holding or investing. You can send millions and have it settled in 10-20 minutes.

This is really the bit I am interested in ........... bypassing CLS