You have probably heard of Bitcoin mentioned here and there in the news over the years, maybe even more so if your in to techy / computing related stuff. Those of us who heard of it back in 2009 and never took it seriously probably wished we’d just left an old PC mining some Bitcoin, as we’d all be millionaires today. Those of you with the foresight to do that, congratulations! I hope you’re putting your wealth to good use! If we fast forward to today you have probably seen Bitcoin is in the news a lot recently due to the massive price surges, there is also a lot of alternative crypto currencies similar to Bitcoin in 2017. These are known as Altcoin’s which is a blanket name for all these other coins. Two of the most popular Altcoins are Ethereum and Litecoin. Altcoins are what I think are worth investing in today, due to 1 bitcoin costing £11,500 at the time of writing this article you really do need a lot of disposable income to really invest in Bitcoin and make a nice return. Sure, you could purchase 0.1 Bitcoin and if Bitcoin keeps growing in value like it has you might double your money. However, given the volatile nature of Bitcoin and it could have lost or gained £1000 in value in the time you have read to this point of the article. Before we go any further some key points I’d like to state: I only consider myself a beginner in the crypto currency world, I’m not an expert by any means. However, I feel I’ve learned enough in the last six months to advise someone else who might be thinking of getting started. Like any investment your money is at risk, so only invest what you can afford to lose. Don’t be stupid and put all your savings in to Altcoins. This article is about investing in alternative crypto currencies (Altcoins) with the view of keeping them as a long term investment. In the short term you most likely lose a little money due to fees charged for buying Altcoins with FIAT (real money in your country) or fees from converting one Altcoin to another, however in the long term you should hopefully make some money. I’m writing this with the view of holding on to Altcoins for several years, making anything you lose in the short term irrelevant. I’d also state do your own research, you might find the ways I like to do things don’t work the best for you. I’m writing this from the point of view of someone who lives in the UK, however where you live only really matters for how you initially buy in to an Altcoin. After that everything else is universal. Hopefully my friends and Digiex members will seriously think about investing a little in to some of the upcoming Altcoins after reading this article. What Altcoins Should You Invest In? This will probably be the first question you have given there is so many different Altcoins out there. Really there is no right or wrong answer here, however I do think a good Altcoin needs to be something more than a Bitcoin clone at this point and have some unique feature or technology which will be useful in the real world. When deciding what Altcoins to invest in a few things I think you should keep in mind are: 1. Don’t put all your eggs in one basket – No one truly knows when an Altcoin is going to take off, or if it ever will. So, spread your investment across multiple Altcoins you perceive to have potential. You might gain some money on certain Altcoins and loose some on others, however if just one of those coins starts to significantly increase in value then you stand to profit. 2. Try and get a good amount of all the Altcoins you believe in when their affordable. Basic maths, the more you have the more you will gain if that Altcoin increases in value. Remember It’s easier for a coin to go from £1 to £10 then it is to go from £1000 to £2000. Therefore I think buying cheaper Altcoins with potential to do well can be more beneficial and less risky than buying 1x Ethereum and hoping its worth £10,000 one day. 3. Invest wisely and do your own research. Don’t just listen to what one person tells you, that includes everything you read in my article here. If you’re interested in an Altcoin coin, read up about it from multiple sources. Things you should be thinking about are: Why are people investing in this coin? Why are some people not investing in this coin? What makes this coin better than another coin? What are people saying on online communities such as Reddit about this coin? Does this Altcoin offer some unique technology or feature other altcoins don’t? Does this Altcoin have a target demographic that is interested in using the coin / technology it in the real world? One thing I have found is if you read the Subreddit’s for the Altcoins you are interested in, the more general /r/CryptoCurrency/ subreddit and search online for reviews and blogs about that coin you can develop your own opinion of what is potentially good and bad about the Altcoin and why people are either investing in it or avoiding it. This comes back to the first point I made don’t put all your eggs in one basket. For example, if you had £1000 to invest, put £200 in the top 5 Altcoins you are interested in. Hopefully you should get a good amount of each coin. It’s possible one of your chosen Altcoin’s could end up been worth £1000’s in the future, like Bitcoin, however don’t count on this. If your invested in several altcoins you believe have potential you have more chance on one of them doing really well. What Altcoins Did I Invest in? At present I’ve invested in to: Ethereum Litecoin Syscoin Stratis Vertcoin Ark Sia Nem Ripple Verge The coins above are listed in the order I invested in them, I have gradually invested in these 10 Altcoins, it’s not something I did all on day one. I started out with Etherium and Litecoin, then started looking at upcoming Altcoins which I perceived had potential. I want to get in on the next Altcoin which was going to significantly increase in value without having to risk a significant amount of money. Below I’ll try and write a bit about each coin I invested in, I would suggest you read some proper blogs to better learn about each coin as I will provide only a basic summery based on my personal understanding. Litecoin – Litecoin is one of the top three crypto currencies (the others been Bitcoin and Ethereum). It was introduced in October 2011, having been around for 6+ years its certainly proved it’s here to stay. Litecoin is very similar to Bitcoin, however improves on some of Bitcoins shortcomings, such as more efficient use of the blockchain resulting in much faster transaction times. Slow and expensive transaction times is a big issue for real world Bitcoin use at present. When I purchased some Litecoin in July 2017 I thought by the end of the year it might gradually climb to the prices Etherium was at the time, recently this looks to be coming true with Litecoin breaking the £100 per coin barrier for the first time on December 9th 2017. Etherium - is one of the top three crypto currencies (the others been Bitcoin and Litecoin). It’s however a little different to Bitcoin and Litecoin. Etherium allows SmartContracts and Distributed Applications to be built and run. Essentially the power of the Ethereum network can be leveraged, making the process of creating blockchain applications much easier. This is why I think Etherium has some great potential behind it, the Ethereum network has the potential to grow, evolve and have real world uses. Syscoin – This is another Bitcoin like Altcoin that’s pretty cheap at present, so if you get it on it now and it grows you have the potential to get a good return on a cheap investment. What drew me to Syscoin was Syscoin is on Microsoft’s Azure Ecosystem, allowing developers and business to deploy it as a blockchain-as-a-service platform. As Blockchain technology becomes widely adopted this could mean Syscoin greatly increases in value as its powering real world blockchain applications. Stratis - Stratis is a UK-based blockchain startup also offering a blockchain-as-a-service platform. Stratis is developing tools primarily targeted at Microsoft products, with that in mind Microsoft has also added Stratis to their Blockchain-as-Service on Microsoft’s Azure Ecosystem. As Blockchain technology becomes widely adopted this could mean Stratis, greatly increases in value as its deployed powering real world blockchain applications. The advantage of Stratis is that it uses a common coding language (C#) making it easier for developers to develop solutions based on Stratis. Other blockchain-as-a-service platform’s use more obscure programming languages, which could be perceived as been less developer friendly. Vertcoin – Vertcoin is developed by community members working as volunteers and stays pure in the original idea of a decentralised cryptocurrency. Developers have pledged to take whatever steps are necessary to protect this coin from specialized mining equipment and make sure that it will always be possible to mine with consumer grade hardware. Vertcoin looks to be doing well and I really liked the community focus of the Altcoin. Ark – This is an ambitious project. Bitcoin brought us the blockchain. Ethereum brought us smart contracts. Other Altcoins brought us their unique features. Ark is aiming to combine all this and more, aiming for real consumer adoption. What I liked about ARK is the Delegated Proof of Stake system. Only 51 delegated people can mine Ark, if they drop out of the top 51 they can no longer mine. If you vote for somebody and they’re in the top 51, you get a profit share of the Ark they manage to mine. Currently every Sunday I get some Ark deposited in to my wallet from the delegate I voted to mine Ark. The amount you get depends on how much Ark is in your wallet, the more Ark in your wallet the more you get from your profit share of the mining activities. Essentially think of this as interest on the Ark you are holding, in addition to the price of Ark gradually rising. I really do like how transparent Ark is with their road map, yet how ambitious the project also is. I do really think this has some very good potential to be the next big thing. Sia – Sia is a crypto currency / distributed cloud storage network. Sia splits apart, encrypts, and distributes your files across a decentralized network. Since you hold the keys, you own your data. No outside company can access or control your files, unlike traditional cloud storage providers. As a user of Sia you are able to rent out your free hard drive space for a set amount of time, in turn earning Sia for your free storage. I’m not really sure if this will ever be profitable for the average person to do, however as demand for cloud storage grows Sia is something I thought was a pretty unique offering. In my opinion well worth a punt given how cheaply you can buy a lot of Sia for. Nem - Introduced new features to blockchain technology such as its proof-of-importance (POI) algorithm, multisignature accounts, encrypted messaging, and an reputation system. What I think is also interesting is the NEM blockchain software is used in a commercial blockchain called Mijin, which is being tested by financial institutions and private companies in Japan. Nem is designed to be used by other platforms and decentralized applications. The more decentralized applications using Nem in the real world, should in theory increase the value of Nem as it’s showing trust in the technology if a major bank adopts it for example. Ripple – What I liked about Ripple is the technology is targeted at payment networks and banks, in addition it is actively used by them too. Ripple is currently used by UniCredit (an Italian banking / financial services company), UBS (Swiss financial services company) and Santander (a bank you have probably heard of) Given Ripple technology has been adopted by some pretty major entities I think it has a bright future. Verge - Verge is an anonymous cryptocurrency, built with a focus on privacy. It obfuscates your IP address to increase privacy by default. After the revelations Edward Snowden revealed of the capability’s of government surveillance I think anything that can be truly anonymous has a place in the world. Especially in less civilised countries. There has been a lot more interest in this coin since John McAfee (you might remember him for McAfee Antivirus) started recommending it. This has certainly caused an increase in value, however could just as easily dip again. I do think Verge has potential though and this is another Altcoin I took a chance as it’s still very affordable. Storing Your Bitcoin and Altcoins In A Wallet: So you have decided to invest in some Altcoins, however to store your Bitcoin and Altcoin you will need a virtual wallet. This is where things can get a bit technical. You want to store the coins in a wallet where you hold the private keys that control ownership your coins, think of this as the password to prove you own these coins. If someone else has this private key then even though the coins might be yours that person or company has the overall say about what happens to those coins and can take them away for you. After looking at a lot of different wallets for both PC and Mobile I settled on Coinomi Why use Coinomi? The number one reason is Coinomi is secure, the private keys that control ownership your coins are stored on your device. The keys never leave your device, meaning no 3rd party can get access to your coins. Some other wallets store the encryption keys on their servers, which would allow the developers of that wallet to steal your coins if desired. Also anyone who hacks in to that server could get your coins, which has happened (Google Mtgox). So ensuring only you have access to your private key is essential. Coinomi supports more Altcoins than any other wallet, meaning you can buy more obscure Altcoins and store them with ease all in one wallet, I think this is great for someone starting out with Altcoins. To see which coins Coinomi supports have a look at Coinomi Supported Coins It’s possible to convert between different Altcoins from within Coinomi, meaning you don't have to register on an exchange. Certainly for newcomers to Altcoins it makes things as user friendly as possible. One-time Backup – enables you to keep everything accessible and secure with just one -passphrase which you only have to back-up once and for all. Again for newcomers to Altcoins this is very useful. If you are not going to use Coinomi then please do your research and ensure you are downloading a genuine wallet. Even on the iPhone app store fake wallets have been published which people have lost Altcoins for using. So, don’t just automatically presume something is safe, do your own research like I did before I decided on Coinomi. Coinomi is currently Android only, however is due to be released on iOS anytime now. So should then hopefully be accessible to the majority of smartphone users. I can’t really advise on any alternate Wallets for other platforms as I’ve not used them. Setting Up Coinomi: Getting started with Coinomi is pretty simple, you can install Coinomi from Google Play Or download the Coinomi Android APK directly from the Coinomi website, be sure to check the SHA 256 if you do this however to ensure the app has not been tampered with. I’d suggest downloading from Google Play for most people. To create your Altcoin wallets with Coinomi you basically need to follow the on-screen instructions, during the setup process you will be given a recovery phrase. I can’t stress how important it is you write this down and keep it somewhere safe! If anything was to happen to your device you can recover your wallet and Altcoins with that recovery phrase, without it your Altcoins are lost and no one can help you get them back. No amount of information you provide, such as past transaction id’s will be any use in the recovery of your Altcoins. Keep in mind somewhere safe doesn’t mean on the same device as your coins. Printed out and stored in a safe would be ideal, or hidden somewhere in your house. In addition, you will have to set a password that you need to remember. You will also need this password to recover your Altcoins, or to send your coins to someone else. So again this is extremely important, no one can help you recover this password if you forget it. Just to re-enforce: Altcoin’s are not like online banking, no one is responsible for your Altcoin except you, no one can recover your Altcoin except you. I hope I’ve stressed how important your recovery phrase and password are, apologies for all the red text! Now you have setup and secured your Altcoin wallet you can send and receive some Altcoin. On the coins you have selected to use by default Coinomi will show your balance. You can then swipe left to see a wallet address you can receive coins at. This changes each time you use it for your own privacy, this makes it a lot more difficult for people to trace your walled on the blockchain and try work out how many coins you have. Swiping to the right allows you to send coins to another wallet address, sometimes you will be given a QR code you can scan to make things easier, if not you need to carefully enter the address, then the amount of coin you wish to send. You will be asked to enter your password to confirm you wish to send the Altcoins. Once you have entered your password to send the coins that is it. If you find the address you have entered is incorrect, no one can stop the transaction. This is why I would urge you to triple check before sending coins, just to re-enforce you are responsible for everything. Hardware Wallets: A hardware wallet is a special type of Altcoin wallet which stores your private keys on a secure hardware device. The real advantage here is your private keys are never on an internet connected device, however can still easily be managed when the hardware device is connected to a computer. For anyone starting out in the Crypto Currency world I don’t think investing in a hardware wallet is essential right away. This is something I might well do in the future once I’ve researched this area more. Another idea I have is to buy an Android device such as the Mi A1 or the Moto G5 and flash LineageOS on it, without any Google services or anything else and using this to store my Altcoins. Only connecting it to the internet if I ever wish to make an Altcoin transaction. For anyone getting started I’d say keep things simple and stick to Coinomi. Buying Bitcoin and Altcoin: So now you should have an idea of what Altcoins you wish to invest in and have created a wallet to store the coins you purchase. Like with choosing a wallet to save your Altcoins you should again do your research on where to purchase Bitcoin and other Altcoins from. Its worth keeping in mind that if you are buying direct with FIAT (real money) then you will end up paying more than the Altcon is actually worth. This is due to the seller / exchange making a little profit and the transaction fees for sending the coin to you. In addition if you are paying by credit / debit card the card processing company can be taking up to 1-3%, so the exchange his to cover these costs which are out of their control. You will likely notice that bank transfer gets you Bitcoin / Altcoin at the cheapest prices, for example you will see for paying by Credit / Debit card if you were to buy just 1 bitcoin your paying £1,284.80 more than you need to. Even the £14,500 is £246 more than the actual value of Bitcoin at that time. However it could always be worse, if I wanted 1x Bitcoin for cex.io it would currently cost me £17813.75 which is £3559 over the market rate: What I’m saying is do your research before buying, my very first Altcoin purchase was some Ethereum. For that I paid more over the market rate than I needed to. However, I’m ok with that as I wasn’t totally sure what I was doing and I’ve learned a lot since doing so. In the long run that wasn’t a mistake as the Ethereum I have is now worth more than I purchased it for. That again brings me to why you should purchase Altcoins with the view of holding on to them for the long term. Initially you probably will loose a little money as you have to buy something for more than its worth. At first I did loose some money on Altcoin, however with the value of the Altcoins I invested in steadily increasing I’ve made money on every investment I’ve made currently. That’s not to say something could happen that negatively impacts the Altcoin market tomorrow, however something could just as easily passivity impact the market too. As with any investment it’s a risk, which is why I’d reinforce don’t go stupid, just invest only what you are prepared to lose if the worst happens. How Can I Purchase Bitcoin and Altcoin's? This part is mainly relevant to people in the UK as I live in the UK and buy from a UK based service, however the same principle applies no matter where you’re buying from, so you can still learn from reading though this section. This is where you again need to research what works best for you locally, for example in Europe you have a lot more options for buying Bitcoin than we do in the UK. Despite what most UK banks tell you, they’re not Crypto Currency friendly. Many exchanges in the UK are using bank accounts based abroad due to UK banks not playing nice with them, which makes things more expensive for us. It is possible to use some European exchanges by using Revolut to convert £ to Euros, then opening a free Euro bank account in Ireland via Fire however that’s beyond the scope of what I’m writing here. I also personally don’t like this as it takes a few days for your Euros to transfer in to your Euro account, then you need to transfer it to a Euro based exchange which again takes time. By that time the cheaper Altcoin’s could have easily gained in price to cover you paying slightly more than it’s worth. Plus it’s far from user friendly for someone starting out in the Altcoin word. That is essentially why I do things the way I’m about to describe, my way might not work best for you, which is why I’m just making you aware it’s not the only way. For people reading this outside the UK, Coinbase seems to be the recommended place to start your Altcoin journey if you have Euros or USD. How I Purchase Bitcoin and Altcoin in the UK: I use Bittylicious, now at first glance you might think their website doesn’t exactly look that modern. That did cause me to overlook them initially. However don’t let the look fool you, you see everything you need to see and nothing more, their service is excellent and are rated 9.5 / 10 on Trustpilot with 892 reviews at present. Look at reviews for other services and exchanges, then look again at Bittylicious, you will see you don’t get a rating like that without putting some serious effort in to fantastic customer service and running a great site. You can make a small transaction without registering on Bittylicious, however in general your going to need to register and confirm your details. Why might you ask? Bittylicious follow industry best practices when it comes to Know Your Customer (KYC) and Anti Money Laundering (AML). With that in mind you will need to upload a photo if your driving licence or passport, along with a utility bill which shows your address. You will also only be able to purchase using bank accounts or Credit / Debit cards in your name. This protects you, the seller and Bittylicious as you are buying Altcoins from other people in the UK, who have gone though even more strict identification checks to be able to sell on Bittylicious. The sellers coins are held in escrow by Bittylicious, so as soon as your payment is confirmed the process of transferring the coins to your wallet starts. Once you are logged in to Bittylicious and your ID is confirmed everything is really simple. You choose the type of coin you wish to purchase and select the amount. By default Bittylicious shows Bitcoin, however you can click on this and choose various different Altcoins to purchase. The price you will pay will depend on the payment method, which is shown on screen. You then need to enter your walled address: Then finally click get some coins. You are then directed to make a payment and have 30 minutes to complete the payment. If paying by bank transfer the bank account details you are paying will be shown on screen, all you do is log in to your online banking and make the payment. After you have done so click confirm. I’d recommend logging in to your online banking first, so you can promptly complete the transactions. As only bank accounts that support Faster Payments are supported (this is most UK current accounts) the payment is confirmed within a couple of minutes and the coins are released from escrow and transferred to your wallet. It really is that simple, if you are capable of making a bank transfer you are capable of buying Bitcoin / Altcoin from Bittylicious. Once you have made your first transaction you will realise how easy it is. In my opinion its honestly more effort going though all the security checks on your bank’s online banking than it is to buy some Altcoins. One thing to note is some bank accounts seem to stop letting you send “Faster Payments” after a certain time of day. With HSBC this seems to be after 8pm in the evening. Anything you try send after that time will be sent the next day. With Nationwide I’ve never noticed this and have made some late purchases around midnight where the payment has instantly gone though as a Faster Payment. Converting Bitcoin, Ethereum and Litecoin to other Altcoins: Something you might find is its not always possible to buy the lesser known Altcoins. Bittylicious does have quite a good selection of the Altcoins I’m interested in, however it doesn’t have them all. Some of the larger exchanges only support Bitcoin, Ethereum and Litecoin. However that is ok as you can easily convert the more popular Altcoins or Bitcoin to some of the lesser known Altcoins using services such as: ShapeShift.io Changelly Coinswitch Shapeshift and Changelly can be used directly from your Coinomi wallet: (Screenshot) Keep in mind with Shapeshift what it says on screen is what you will get, as the total displayed includes the transaction fee. Where as the total Changelly shows doesn’t include the transaction fee, so you will get less off the coin you are converting to. Coinswitch is a web based service which compares various exchanges and conversion platforms to get you the best rate. You would generally use this in a web browser, then scan the barcode to send your Altcoin to convert to, supplying your wallet address to receive the converted coins. When starting out I’d recommend Shapeshift for ease of use, unless Changelly or Coinswitch offer you a much better rate. At the time of writing the transaction fee’s for Bitcoin are around £38! So if you converted £100 worth of Bitcoin you’d loose £38. This is not always the case, the Bitcoin network is overloaded at the moment due to all the media attention its been getting. With that in mind use Litecoin or Ethereum if possible to save money on the transaction fees. How Much Have I made On My Altcoin investments? I’m not going to post what I invested in to each Altcoin, or how many of each Altcoin I own. However I will give you some percentages of how much the value of each investment has increased by: As you can see, the above is a fantastic return on the initial investment. It has certainly given me some insight in to how someone with a lot of money to invest could make some serious money with Altcoin investments. However even if you’re the average working person like myself and you could invest £50 - £100 a month and make a nice return on that. Even if you have little free money at all you could easily go without something you don’t really need and invest what you save in to Altcoin. For example if your spending £3 at Starbucks, 5 days a week, every week of the year that’s £780 a year you could have invested. At the rate Litecoin has increased in value since July you could have turned a £780 Litecoin investment this July in to £4680 based on the price of Litecoin when I wrote this. That isn’t bad for going without an expensive cup of coffee if you ask me. I’m personally someone who likes to play things safe, however investing small amounts in the right Altcoin can still be profitable, especially for the long term. Just only invest what your prepared to lose, not your life savings. Conclusion I hope this post have given you some insight on how to get started with Altcoins. Despite this article been almost 5500 words I’d never call it a definitive guide, unlike with other thing’s I’ve wrote guides for on Digiex you could go about getting your first Altcoins in so many different ways, depending where you are in the world different ways will work best for you. However if you know very little about Altcoins I hope you found it a great starting point. If I had to give you 10 points to take away from reading this post it would be: It’s never too late to invest a little, especially in to some of the upcoming Altcoins which might actually have some real-world use beyond been another Bitcoin clone. Like any investment your money is at risk, so only invest what you can afford to lose. Don’t be stupid and put all your savings in to Altcoins. You are responsible for your actions, no one else is. I personally think the best thing to do is invest in Altcoins with the view of keeping them as a long term investment, by long term I mean multiple years. In the short term you most likely lose a little money due to fees charged for buying Altcoins with FIAT or fees from converting one Altcoin to another, plus the general up and down’s. However long term you should hopefully make a nice return on that investment. Don’t put all your eggs in one basket, no one truly knows when an Altcoin is going to take off and significantly increase in value. The best thing you can do is spread your investment across multiple Altcoins you perceive to have growth potential. Try and get a good amount of all the Altcoins you believe in when their affordable. Store your Altcoins in a wallet you control the private keys to. Don't leave them on an exchange, or buy Altcoins using something like Revolut where you can't even transfer the Altcoins out the app. Do your own research, you might find the ways I like do to things don’t work the best for you. Once you have purchased your first Altcoins and gone though the process everything should fall in to place and seem a lot less complex. It’s really not as hard as it first looks which is a barrier I perceive causes people not to bother, or loose interest. Don't expect to make a significant amount of money overnight, however hopefully in a year’s time you will come back and thank me for convincing you to invest a little. To conclude I do still consider myself a newbie in the Crypto Currency world, however do feel I’ve learned a lot in the last six months and now feel confident enough to share my experience. So I’d say decide on how much you wish to invest and have a go, you really don’t need to go crazy. Start with a little amount and have ago. Hopefully this article was of some help and you too can make some extra money investing in Altcoins.