a guide to buying, selling, trading and storing altcoin in wallets

Bitcoin is regarded by the communities as the first legitimate cryptocurrency. It served as the catalyst. Bitcoin brought upon the birth of many other cryptocurrencies that exist today. Now, there are over 2,000 different cryptocurrencies. Each serving a different purpose. Some of those cryptocurrencies have even broken through and are seen in the same positive light as bitcoin.

Although some of the altcoins have become more popular. none have quite reached the media status that bitcoin has. Only a small percentage of the world knows about bitcoin, what more altcoins? How to buy altcoins? Where do you buy them? If there are so many, How do I choose which altcoin to invest in?

We’ll take a step by step approach to answering all those questions.

What are Altcoins?

Before we get into trading and storing your altcoins, it’s important to first define what they are. Altcoins, otherwise known as “alternative cryptocurrencies”, all launched after the success of bitcoin. They present themselves as better alternatives to bitcoin. They try to target bitcoin’s limitations and flaws and come up with versions with competitive advantages. The term “altcoin” refers to all other cryptocurrencies other than bitcoin.

Many altcoins are built using the framework that bitcoin provided. Altcoins also involve a mining process. Where miners solve different complex problems to unlock blocks. They also carry out cheap and efficient transactions throughout the web. This makes most Altcoins have a peer-to-peer aspect integrated into them. Despite altcoins using the basic framework of bitcoin, many of them differ from bitcoin. This means different proof-of-work algorithms, different mining means, etc.

Namecoin is regarded to be the first ever altcoin. Introduced in 2011, Namecoin has a lot of similarities to bitcoin. It uses the same proof-of-work algorithm and is also capped at 21 million coins. It separated from bitcoin as it made user domains less visible. With the intention to increase anonymity and censorship resistance.

Buying, Selling and Trading Altcoins

Like bitcoin, there are specialized exchanges that allow users to buy, sell, and trade altcoins. But where to buy altcoins? Altcoins cannot be exchanged for fiat currency. Most altcoins are traded in exchange for bitcoin (although some can be traded for Ethereum and Monero). There are some exchanges that will allow trades for fiat (usually USD or Euro), but they might be a little hard to find nowadays.

Why invest in bitcoins?

Granted that the price of cryptocurrencies–especially those of altcoins keeps on going up and down and there is way higher degree of volatility than established coins (like Bitcoin and ethereum), there are still many reasons you should consider investing in altcoins.

They are relatively small investments which can yield huge results.

Many cryptocurrencies are yet to hit the benchmark set by bitcoins (and they probably never will but that does not make them useless. While bitcoin is a good way to transfer wealth, there can be several other benefits of cryptocurrencies– Ethereum, for example, is gaining a lot of reputation for its ease to build decentralized apps (Dapps) on top of it. When people find out about the benefits of these currencies, investments starts pouring in and these coin become suddenly valuable.

They are excellent for day trading.

If you want to make side income day trading, altcoins are a better choice than bitcoin (or even ethereum for that matter). The price of the altcoin fluctuates in real time like crazy. If you can identify and recognize the patterns, invest when the price is low and sell when the price is high, you can make pretty good money flipping altcoins.

altcoin price fluctuating per BTC

Anonymity

Bitcoin is a pseudonymous peer to peer payment system while it is still more secretive than the traditional banking system, it’s not completely anonymous. There are, however, other altcoins which are completely anonymous. Monero, Zcash, and Pivx to name a few. If you want that extra layer of security, altcoins will facilitate it better than bitcoins.

How to buy Altcoins?

There are several exchanges that allow you to buy bitcoins in exchange for either fiat like USD, EUR etc or bitcoins. If you’re looking to start trading altcoins, make sure to do your research. Each exchange will have their own set of rules and guidelines for preventing fraud. Minimize your risk and make sure to do some digging up.

Some of the most popular exchanges for buying altcoins are:

  1. Binance
  2. Bitmex
  3. Bittrex
  4. Changelly
  5. KuCoin

Most of these exchanges, however, have KYC (Know your customers) in place so if you want to buy altcoins anonymously, these should be your pick:

An alternative to finding altcoin-specific changes would be to use peer-to-peer marketplaces. Peer-to-peer marketplaces have hundreds of payment methods available for buying and selling bitcoin. These payment methods should include several Altcoins that you can trade with. You can use a peer-to-peer platform to buy bitcoins and trade them in for the altcoin of your choice.

If you already have some bitcoin to spare (or bitcoin that you want to change into Altcoins), then you can automatically trade them in.

For example, you can sell your BTC for different altcoins in Paxful–one of the leading p2p bitcoin marketplace:

Sell your btc for altcoins like ripple (XRP) through p2p exchanges like Paxful

Where Do I Store my Altcoins?

Just like bitcoins, altcoins are also stored in wallets. There are wallets that only store bitcoins, there are wallets that only store specific altcoins, and there are wallets that store both. If you’re looking to trade a lot of different cryptocurrencies simultaneously, then you should go for an all-around cryptocurrency wallet. Bear in mind there is no such thing as the best wallet for altcoin, you should make your choice based on what your needs are.  

Finding the right wallet is something that you should take very seriously. Wallets differ in many factors: ease of use, convenience, and most importantly, security. Mainly, there are two kinds of wallets: “hot wallets” and “cold wallets”. Hot wallets are wallets that are connected to the internet, cold wallets are ones that aren’t.

DISCLAIMER: The following descriptions of the wallets before are short and simple. For a more in-depth guide on the different wallets, you can use for your altcoins, you can check this article out.

Hardware Wallets (cold wallet)

Hardware wallets are regarded to be the most secure wallets. These are physical devices that store your private keys offline as anything connected to the internet can pose a possible threat to security. Keeping the keys offline makes them immune to computer viruses.

Most hardware wallets will allow you to set up a PIN that will be required to access the device. You can also back these devices up just in case you lose the physical device.

The only bad side to hardware wallets is that they’re pricey. This is why they’re ideal for storing a lot of cryptocurrencies. After all, you can’t put a price on security, right?

Paper Wallets (cold wallet)

As an alternative to expensive hardware wallets, paper wallets are literal pieces of paper that have your private and public keys on them. There is a number of trusted generators that you can use to make a paper wallet. Despite it being a cheaper alternative to hardware wallets, paper wallets have their own set of downsides. One of the bad sides is that if your computer gets hacked when you create your paper wallet, your public and private keys could be compromised. Another bad side to it is that you cannot withdraw a fraction of a paper wallet. You’ll have to get the whole amount and then the paper wallet cannot be used anymore. You’ll have to get a new one.

Paper wallets are ideal for storing a large amount of cryptocurrency for a long period of time.

Desktop Wallets (hot wallet)

These are computer programs that store your public and private keys on your computer. Desktop wallets are more susceptible to viruses, especially if your computer gets infected. If your hard drive isn’t backed up, you run the risk of losing your keys. This wallet, unlike the other two previously mentioned, is not ideal for storing significant amounts of cryptocurrency.

Online Wallets (hot wallet)

Online wallets are wallets that are accessible through online browsers. They can be accessed from any device from anywhere in the world. This is both a good thing and a bad thing as it becomes susceptible to hackers.

The downside is that instead of you holding your own public and private keys, the websites are often the ones that hold them. For online wallets, more trust is required on the platform’s part.

Mobile Wallets (hot wallet)

These are wallets that are accessed via applications on your smartphone or tablet. A great advantage of mobile wallets is its accessibility. Because it can be accessed on your smartphone or tablet, you’re able to send and receive cryptocurrency on-the-go. There are two types of mobile wallets: (1) ones that store your private keys on your device and (2) ones that hold your private keys.

Here is a review of 5 of the best altcoin wallets in the market right now.

The most promising Altcoins of 2019

Now that you know all about trading altcoins and where to store them, you must be thinking about which altcoin to actually invest in. Here are a few top altcoins, dubbed by BitDegree, to be the “best altcoins of 2019”. These are also the altcoins to watch out for the next year.

  1. Ethereum

Ethereum is an obvious choice since it comes second to bitcoin in the most valuable cryptocurrency. Compared to bitcoin, Ethereum is more than a digital currency. Ethereum allows developers to build blockchain-based smart contracts and Dapps (decentralized apps). Ethereum was the first to introduce smart contracts (which some people claim to be the “next big thing”).

According to BitDegree, it grew from $9 (January 2017) to $1,389 (January 2018), showing a 17,000% return.

  1. Litecoin

Created in 2011, Litecoin stands as one of the oldest altcoins. It was created as a solution to bitcoin’s slow transaction speed.

Litecoin is widely recognized to be the “silver” to bitcoin’s “gold”. According to BitDegree, it grew 8,000% in 2017 (growing from $4 in January to $350 in December.

  1. NEO

NEO is a cryptocurrency that was developed in China in 2014. By far, it’s the biggest cryptocurrency that has emerged from China. Its use of smart contracts and Dapps draws similarities to Ethereum. It even goes far enough for people to call NEO the “Chinese Ethereum”.

The value of neo almost doubled from $44 in April 2018 to $82 in January 2019.

Bitcoin is Not Alone

bitcoin mostly controls the fate of altcoin

Ultimately, it’s up to you if you want to start investing in altcoins. Look out because, in time, the top altcoins of 2019 may change right away. The cryptocurrency industry is one that requires a tremendous amount of research.  If you’re convinced that you’re ready to get in it, you’ll first need to do your research. First, you’ll need to research on which altcoin you want to start investing in. Since there are over a thousand cryptocurrencies out there, you’ll really need to dig deep. Next, you’ll want to find a way to buy your altcoin. Check if there are trustworthy dedicated exchanges for it. If there are none, you can try your luck at a peer-to-peer platform and see if they have it as a payment option. There will be many other ways to buy your altcoin, you just need to know where to look. Next, you’ll need to know what kind of you’ll need to use. Look through the different wallets mentioned above and see which one suits your situation.

Once you’ve figured those things out, ONLY THEN are you ready to start trading. To recap, research plays a very important role. Not only when cryptocurrency is involved but also with any kind of investment imaginable. Doing your own digging and accepting risks can save you a lot of time and money.

It’s a very intimidating process but once you get the hang of it, it’ll be like clockwork to you. You’ll soon be learning how to make profits via altcoin flipping