Balances and confirmations – this is where you fund your exchange accounts, and also where the money you trade will be deposited. Bear in mind that when you send cryptocurrency to an exchange, or you withdraw cryptocurrency to your personal wallet, there will be a delay that varies per exchange. Each exchange will wait for a certain number of confirmations before effectively releasing your funds, this happens on the blockchain.
Diversification allows you to recover from the loss of your total investment (20% of your portfolio) by gains of 10% in the two best companies (25% x 40%) and 4% in the remaining two companies (10% x 40%). Even though your overall portfolio value dropped by 6% (20% loss minus 14% gain), it is considerably better than having been invested solely in company E.

Regarding your private keys, can either keep them on a software wallet, or on a hardware wallet. The software wallet is the easiest way for beginners, but it implies that you have a computer that is properly secured (strong password, antivirus etc.) and that you do backups of your data. Remember, if you lose your private keys, the money is gone forever. As you get into cryptocurrencies more seriously, you will inevitably look for a hardware wallet, which is a dedicated device resistant to hacking where you can store your private keys (or to say it in an easy way, your crypto assets/invested money). I have already written an article on a hardware wallet, the TREZOR (see here). The most common wallets are the TREZOR and the Ledger Nano S. The TREZOR has a new model being sold from January 2018 (Model T) which will support much more currencies than the current TREZOR. The Ledger Nano S has more integrations currently, but I would recommend to wait for the TREZOR T to judge properly. Those devices usually cost around 100 USD, so once you have more than 100 USD to protect it starts making sense to get one.
1$0.00 commission applies to online U.S. equity trades, exchange-traded funds (ETFs), and options (+ $0.65 per contract fee) in a Fidelity retail account only for Fidelity Brokerage Services LLC retail clients. Sell orders are subject to an activity assessment fee (from $0.01 to $0.03 per $1,000 of principal). There is an Options Regulatory Fee (from $0.03 to $0.05 per contract), which applies to both option buy and sell transactions. The fee is subject to change. Other exclusions and conditions may apply. See Fidelity.com/commissions for details. Employee equity compensation transactions and accounts managed by advisors or intermediaries through Fidelity Clearing & Custody Solutions® are subject to different commission schedules.

A warning on backup phrases: It is absolutely crucial if you’re into this seriously to WRITE DOWN ON PAPER the sequence of words, write it down properly, and check it rather twice than once. NEVER EVER store it on a cloud drive, as a file on your computer, or even worse as a screenshot/photo on your mobile. Store it in a safe place where you and anyone you deem to be a trustworthy person knows. Don’t leave it on your desk, don’t leave it in the kids room, as there are many horror stories of people who lost money because of this.

The Intelligent Investor by Ben Graham ought to be required reading for every private investor. While the innovations he brought to stock analysis have long been outdated and the red flags he used to watch out for in a company's accounts are now regulated against by the SEC, many of his insights about thinking about investment still stand. For example, his description of Mr Market is still an excellent way of understanding how a crowd moves with the daily news.


Warning 2: this is serious. If you don’t believe me, just go on Reddit (r/Cryptocurrency) and look for posts of people who ask for help. There are some devastating stories out there which are all based on greed, credulity, inexperience and/or outright stupidity. You may become rich, but you may also lose everything. People are taking loans with high repayment rates to buy at peak price and will end up ruined. Young inexperienced people have burned their relatives’ lifetime savings, others have no money to pay their university tuition. Don’t be those guys.

It’s all fun and games until the taxman passes. There is no clear legislation on taxes and it varies on per case and per country basis. My personal recommendation is to declare the money you cash out on your tax form. This would normally be taxed as « financial income money », just like if you sold shares or cashed out money from the income of your own company (like when you get paid dividends). Example: 15% financial income tax. You cash out 10000 EUR, you get taxed 15% on this.

So you’ve seen it on TV, everybody talks about it in office or between friends, and everybody knows « that guy who invested xx months/years ago and is now rich », and you want in too. Like a vast majority of people, you are not in because you believe in the world-changing capabilities of cryptocurrencies but you just want to make some nice amounts of cash. Fair enough!
Advanced exchanges such as Kraken and GDAX will allow you to do what is called « pair trading ». Pair trading allows you to trade one fiat currency against one specific cryptocurrency, or cryptocurrency against cryptocurrency. For example, you might have an USD/BTC pair (exchange US Dollars for Bitcoin), or a GBP/ZEC pair (exchange British Pounds for Zcash), or even a BTC/LTC pair (Exchange Bitcoin for Litecoin). Bear in mind however that most exchanges which handle fiat currencies do not manage a lot of cryptocurrencies, only the mainstream ones.
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