Tip #7: Understand there's more besides Bitcoin

This forum got started back when Bitcoin was pretty much the only game in town when it came to cryptocurrencies. To this day its focus is on Bitcoin. However, we are now almost done with 2017, Bitcoin has been around for eight years, and it has inspired lots of new coins and other cryptocurrency related projects.

You may be feeling overwhelmed by all the information you are encountering about Bitcoin. I remember feeling that way too. I kept seeing these ads for writing to earn a different coin, also known as an altcoin, and I ignored them for several months because I thought I should just focus on Bitcoin until I'd mastered it.

If you ignore the other coins you are going to miss out on a good 99 percent of what the cryptocurrency world has to offer, including a lot of ways to earn.

There are currently over seven hundred actively traded coins, and several thousand more defunct coins. It is very important to understand that there are more dead altcoins than live ones.

So at this stage, I am only going to advise that you get to know about some of the other altcoins. I am going to show you how to most easily get the information and your "homework" will be to get to know two or three altcoins. Just get to know them, but don't buy any yet. I will provide future tips on what to look for in an altcoin, but today I'm going to focus on how you can find the information you'll need to make an informed judgment about an altcoin before you buy it.

Coin Market Cap will be your go to site to connect with all the active altcoins. You can also use it to look up inactive coins as long as you know the exact name or ticker symbol of the coin. Go ahead and bookmark coinmarketcap dot com.

The home page is a list of the top one hundred coins in terms of market cap. Market cap is the total value in Dollars represented by all the coins currently in circulation multiplied by the current market price of the coin. Right now, the price of one Bitcoin is $9607.11 and there are 16,705,012 BTC in circulation. So the market cap for Bitcoin is $9607.11 x 16,705,012 = $160,486,887,835. It's a very simple math problem and a good way to rank coins. It is an inflated number for a couple reasons. First, this amount would be realized only if every single Bitcoin were to be sold at its current market price all at once. However, if everyone who owned Bitcoins tried to sell them, the price would drop and drop until the last person to unload would get next to nothing. Second, it doesn't account for any coins that are lost. We know from various anecdotes that a few people who mined Bitcoin early on wiped their hard drives or in some other way lost access to those coins and so they are not actually in circulation.

The rank of coins has nothing to do with the coin's quality, only its market cap. You can have a coin that is high quality but still has a low market cap. Diamond, for example, has a current circulating supply of 2,531,992 and a price of $9.66, so its market cap is $24,447,193. Because the supply is so low compared to Bitcoin, even if Diamond were priced at $10,000 each, its total coin market cap would still be lower than Bitcoin's. As for the coin's actual value, well, you need to know right now that a lot of very poor quality coins go through periods of rapid price rise due to hype, pump and dump schemes or random weird market forces, so you can't just consider the price or the market cap in making your investment decisions.

If you click on the name of a coin from the Coin Market Cap home page, it will take you to a page that is just for that coin. For example, click on Ethereum to get to its page. You will see a repeat of the information for Ethereum that you saw on the home page. On the left hand side, under the name "Ethereum," you will see a short list of hyperlinked words like "Website," "Announcement," "Explorer," and more. The Website hyperlink takes you straight to Ethereum's website. The Announcement hyperlink takes you straight to Ethereum's announcement thread on this forum. the Explorer hyperlinks (in the case of Ethereum there are several) take you to block explorers for Ethereum. Other hyperlinks take to you other sources of information about Ethereum, such as Ethereum's own forum or message board, Ethereum's chat channel and even Ethereum's source code. If you were interested in investing in Ethereum, you would first want to spend time looking over those different sites.

We're still on Ethereum's page. Scroll down a bit to where the charts are. That shows a graph of the overall price (in BTC and USD) and market cap trends over time. You can click on Markets to learn where Ethereum is traded, Social to get updated feeds of various social media sites where Ethereum has a presence, and Historical Data to find out the daily high, low, open and close price for Ethereum as far back as you want to go (default is 30 days).

I used Ethereum as an example, but the pages are laid out the same for each coin. Some coins may have slightly less information than Ethereum, but it will all be there.

So, for your "homework," spend some time on Coin Market Cap. Get familiar with the home page and the pages of a few individual coins. When selecting coins to learn more about, don't limit yourself to the top 100 ranked coins. You can easily ask to see the next 100 to get lower ranked coins. Once you've picked a few, then start digging into the hyperlinked information found on each of their pages. Feel free to post any summary information of what you've learned here.

I'm going to choose to go with the above theory. I hope if that's the case that some of the funds get put towards a solid marketing effort.

There's a lot of bad advice on this thread. It is an illusion that cryptocurrencies can't be tracked. Digital transactions leave way more of a trail than cash does. If you have enough crypto-wealth that you're concerned about how much your tax bill is going to be, then consult with a competent professional tax adviser or accountant who understands cryptocurrencies and trading in general. A good tax accountant can help you find legitimate discounts and loopholes, but you shouldn't deliberately break the law.

I would think you could if you used delegated harvesting and had your harvesting address connected to a node.

Wonderful to know, especially since I'm actively buying more DNotes now. Any idea on timing for the conversion to DNotes 2.0? I'd like to know how much time I have to accumulate more because I am pretty sure the transition will come with a major price hike.

I think DNotes will win the most undervalued coin of 2017 award!

Hi there, thanks so much for stopping by.

Generally ANN threads start out as announcements about new coins and projects. For coins, these threads are often linked to directly from a coin's page on Coin MarketCap. For example, if you go to the DMD Diamond page on Coin Marketcap, you will see a series of links on the left hand side just below the coin name. The headings are "Website," "Announcement," "Explorer," etc. The link called "Announcement" will take you directly to DMD Diamond's Announcement thread right here on Bitcoin Talk. I like that they are posted on Coin Marketcap because there you can easily look up a coin you want to know more about, and from there easily get to the coin's website, the coin's announcement thread, the coin's block explorer, trading platforms that support the coin and more.

An airdrop is a way to distribute a new coin. There are various ways of distributing, including ICOs, mining, proof of stake minting and more. Airdrops involve the distribution of free tokens to people based on some parameter such as geography, citizenship, being a customer of a particular retail store, etc. In order to qualify for an airdrop, you would have to meet its requirements. I personally do not have a lot of experience with airdrops, but I did find this website which claims to monitor airdrops. Anyone who has used that site or who has others to recommend, I would love your feedback.

A bounty is a reward offered for work done in the development of a particular coin or project. For example, maybe a new coin's development team has a wallet for the coin for Windows and Linux, but none of their developers are familiar with Apple computers. If the team wants an Apple wallet developed, they could advertise a bounty offering to reward a programmer with a certain amount of coin once he has successfully created a wallet that people can run on their Mac computers. I am a writer, so I have earned a few bounties for various writing projects for different coins. In one case I earned a bounty for writing up an FAQ page for a website. The bounties I have earned I generally learned about in the course of my normal day to day interaction with a specific project's community (often the announcement thread for the project), but I believe people will also post threads announcing bounties as well. In order to be able to earn a bounty, you usually need some specific skills--programming, writing, etc.--that would help you to accomplish the particular project to be rewarded with a bounty.

Another way to earn money here that is fairly new to me is with signature campaigns. Each Bitcoin Talk user is allowed a signature which will show up at the bottom of each post. People have learned that signatures make great advertising, so the development teams of various projects have been willing to compensate people for placing an advertisement for that project in their signature. My signature at this time is an advertisement for DMD Diamond, and yes, I am participating in a paid DMD Diamond signature campaign.

Earning with your signature is an option that only gets better as you carefully cultivate your Bitcoin Talk reputation, as higher ranked members have better signature options. So please make sure that your posts are courteous, relevant, and either informative or asking good questions. It helps to also use correct grammar and spelling for the language you are writing in. And when you are participating in a signature campaign, be sure that your posts do not degenerate into spam. Do not post just to hawk the product you are advertising with your signature. You can bring it up if it's relevant to the discussion, but otherwise just post good quality posts in threads you are interested in and the people who read your material will also notice your signature.

That's a very insightful article. I've started to notice that the "new" coins that are most likely to succeed long term have to be more than just coins. They actually need to be entire ecosystems. You can see that especially with STEEM, which is powering an entire social network, and it has three different "currencies" within it (STEEM, SBD, and SP). DNotes is turning out like that but not exclusively through what's on its block chain, but more by its supporting "bricks and mortar" as well as internet-based infrastructure. If you want to start a new coin today, it has to be an entire ecosystem or it will be short lived.

The problem, though, as well as the path forward, is that all these coin/ecosystems out there are still isolated from each other and largely from the rest of the financial world. As the article points out they each have their own assets and investors and their ecosystems only really work as isolated entities. Breaking into what's going on in the rest of the world is a challenge. I think the next big thing in block chain technology, then, will be a coin/ecosystem that truly integrates with the rest of the financial space. It might take a while to get there, and it will need to be thoroughly thought out. I don't think it will happen randomly, though there is a remote possibility it could.

I for one am looking forward to learning more details about how DNotes is positioning itself to integrate in a more complete way with both the current financial space and the rest of the block chain based world. The coin that succeeds in effectively bringing those two worlds together in a meaningful way for ordinary people is going to in retrospect turn out to be the absolute best financial investment anyone could make now.

I can think of at least one now defunct coin that made a valiant effort in that direction, and its failure, while largely internal, also speaks to the magnitude of this challenge.

I am happy to see the price of NEM bumped up just a bit at the same time that Bitcoin is experiencing another major run up. It says a lot about the solidity and stability of the coin that it's held a fairly stable 20 to 21 cent price tag in the past few weeks. We all are looking forward to that stable price tag being over a Dollar, but at least it has a stable price now.

Thanks for the heads up. That is not a good sign when a site goes down with no explanation. It's especially rough on those who have standing market orders (read, funds held on the exchange).

One practice I do (mostly) is that when I want to trade coins and I'm getting ready to send them to the exchange, I first log in to the exchange and check the deposit address. It's not that I can't have my wallets "remember" various exchanges' deposit addresses. It's that before I send in a bunch more coins I want to make sure the exchange is still there.

Congratulations! These are record high prices for Bitcoin. I wonder how long it's going to take to hit $9,000. Someone in my area was predicting Bitcoin would hit $10,000 before the end of the year, and now that seems quite doable.

Those are some very good questions, and ones that I hadn't thought of before.

At this point, anyone who gets involved with a cryptocurrency is an early adopter, and as such, will have early adopter advantage. I think that once cryptocurrencies truly go mainstream, it will be more difficult for people to put in small amounts of money and see their investments grow 100 times or more. However, I think that the next stage will be that people can use cryptocurrencies to buy stocks and things, and there will always be new ventures that people could invest in. I actually believe that some of the US regulations do make it more difficult for ordinary people who aren't wealthy to have access to some good investments. For example, recently there have been a number of ICOs launched in the US which will only allow accredited investors to participate. In that case, people like me are excluded and if they turned out to be good products, then I miss out on the financial opportunities. For this reason I am super excited about the micro-IPO provision that Dyna and the DNotes team discovered. That is seriously an amazing find!

When a coin starts getting adopted by a much wider group, the price will go up, but it will hit a point where people won't pay any more for it and then it will come down and eventually reach an equilibrium until another mass adoption event happens to push the price up. The secret here is to always have a good reason for someone to buy DNotes. If they didn't get in on the very first price hike, if it's a good project (which it is) then there will always be another price hike when it picks up a new market, and in between the price should be pretty stable I would think.

As for the current wealthy (hedge fund managers and the like) getting involved, I'm not too worried about them. Sure, it's great if you happen to be holding the coin that they're suddenly interested in. But if they're really buying your coin for their clients, that's a good time to take some profits, because I think they can pump the price a lot because they have plenty of money, and that pump is less sustainable than the kind of pump you get when your coin gets into a genuine new market, i.e., a new group of genuine adopters.

I obviously don't have a crystal ball, so no guarantee that any of this will actually happen. But that's how I see it. Ultimately, a coin will rise or fall on its fundamentals, and DNotes has some great ones. I tell people that DNotes currently is one of the most undervalued coins in existence. But honestly, all the coins that are good are very much undervalued because so few people (relatively speaking) even know about them.

Tip #6: Start keeping records

This is a tip I sincerely wish that I had put into practice when I first got going with Bitcoin and other cryptocurrencies as I am now in the unenviable position of having to reconstruct the story of my involvement in cryptocurrencies as told by hundreds, possibly thousands, of different transactions.

You can see from the above post that sometimes things in the cryptoworld end up being more complicated than anticipated, and that is definitely the deal with Coinpot and its connected faucets. Don't sweat the faucets. The main point with doing anything with them is to start working with actual Bitcoin. There is nothing like actual experience to get a real education. Have fun with the faucets and get the experience, but my sincere hope is that it won't be long before you move beyond them. And anyway, the real important faucet site is Free Bitcoin, not so much because of its faucet feature, but more because of its interest earning feature. So, play that faucet, and keep track of your interest payments, your faucet payments, and if applicable, your referral payments.

Why is it important to keep records of your crypto-transactions? There are several reasons, depending on the direction you take. If you get into trading, you will want a way to objectively analyze the profitability (or lack thereof) of your trades. If you buy and hold a particular coin, you will want to know the price you paid for it in order to determine a good time to sell it. A really important reason is that some of the transactions you make in the crypto-world are taxable events. In order to properly comply with the tax laws where you live, you will need to know what you did.

I am not in a position to give any kind of tax advice. However, I think it is safe to say that your tax reporting will be much easier if you go into it with thorough records, and there is no better time to begin keeping thorough records than right as you're just getting started.

Fortunately, it is not as difficult as you might think, and there are some great tools which have been developed with cryptocurrencies in mind. I know of two, which I will recommend you check out. Both have a free limited account option. Both have a price tag you will need to pay in order to fully utilize them.

Coin Tracking is a very comprehensive service that has been in business since 2013. You can easily import records from over twenty different trading platforms, you can import wallet transactions, and you can run APIs to automatically track future transactions. The tool is loaded with all kinds of analytics and will even generate completely filled in tax forms for a number of countries including Germany and the US. I played around with it some and contacted support with some questions pertaining to my own particular situation (which I'll admit is a bit off the beaten path, even for cryptos). I got a very detailed reply back within 24 hours telling me that yes, this tool could handle the particulars of my situation.

The tool is complicated and takes time to learn the ins and outs of. The free account allows tracking of up to 200 trades and manual wallet transaction entries. As you gain transactions in Bitcoin and other cryptocoins, you can enter those into Coin Tracking and use the information to figure out how it works. You will need to spend time learning how to do it, and the final results of analyses, tax forms, etc. will only be as good as the accuracy of your data. As I mentioned above, I would have loved to have known about this tool back when I had less than 200 trades to my name.

Bitcoin Tax is another tool that I am exploring. Its free version will allow up to 100 transactions, so again, great to work with in the very beginning at no cost. Once you exceed 100 transactions you have the option to buy a premium version for 2017 which will then allow you to input an unlimited number of transactions from 2017. If you have any transactions from 2016 or earlier years you will need to buy the premium version for those years. In that sense its fee structure is similar to the kind of tax reporting software you might purchase in the United States. You buy the software for the tax year you are filing for and then the following year you buy a new license.

Bitcoin tax in my opinion is simpler and more intuitive than Coin Tracking, and it's much less expensive. You will be spending more time working with your data, though. While Coin Tracking is programmed to accept whatever CSV format its numerous exchanges spit out, Bitcoin Tax really only accepts a particular format, which means that when you get the CSV exports from your exchanges (and they are all different) you will then need to import the data yourself into a program like Excel in order to put it into the right format for Bitcoin Tax, and then you can import it in. That is not an issue for me as I have those skills. There may be some other features that Coin Tracking has that Bitcoin Tax does not have. It also seems to be mainly geared with US tax filing in mind, so if you file taxes in a different country it may not be as helpful to you.

If you are at the point where all you have are a few wallet transactions, that is a great time to begin the discipline of record keeping. You can enter your transactions manually, and that's a good discipline at first as another way to work with your information and really get to know what you're doing. But most coin wallets do allow you to export data into an importable file format, and it's a matter of then working with that data to get it into whichever record keeping tool you're going to settle on. I would recommend trying out both tools and getting to know how they work, so that when you need it to give you some actual results, you don't feel like you're just running everything through a magic black box. Hopefully by the time you max out what you can do with a free account, you will be comfortable enough with one of the services to be willing to pay for it and consistently use it.

When entering records, keep in mind that it's not a transaction until funds hit your wallet. So, for example, if you are accumulating faucet earnings in Coinpot, you don't really need to track those until you get a payment from Coinpot to your own wallet. At that point it's a transaction you should record as some form of income. Since interest and faucet rolls are immediately credited to your Free Bitcoin account, and you have access to those funds, you can record those as they happen. At this point Free Bitcoin doesn't offer historical records (I have submitted a support requesting that for my own account), so the best thing is to record your interest and referral earnings at least once a week and your faucet claims as they occur. With that said, since you don't technically own the Free Bitcoin wallet, one could make the argument that you don't need to record anything until you make withdrawals, at which point you would consider any amount beyond what you have deposited to be income. This is the part where I'm supposed to say you need to consult with your own qualified tax advisor.

Bottom line: start keeping records of what you are doing with your cryptos.

I did check, and Coinpot will send your earnings to the Moon Bitcoin registered address once 25,000 satoshi accumulate, so in that respect you don't have to do anything. But with the high Bitcoin price which corresponds to low faucet earnings, it's going to take a long time to reach that threshold on just one faucet.

Coinpot is one of several faucet aggregation services. I remember one called Faucetbox and another called Coinbox. Not sure if either of those are working now.

Honestly the reason I recommended Moon Bitcoin is because of its longevity. So many faucets come and go, but this one, along with Free Bitcoin, has stood the test of time. They recently contracted with Coinpot for distributions, but before that, their own internal threshold was 25,000 satoshis before they would pay you, so that part hasn't changed.

Edit: I tried to link a full blown Coinpot account to my Free Bitcoin deposit address and I will admit that is going to be at best an annoying process and at worst won't even work at all. What happened was I tried to register a Bitcoin Bonus faucet account, and it required me to register with an email account. Well, that registration automatically registered me with a full blown Coinpot account which wasn't the same account as the one connected to my Moon Bitcoin faucet address. So then I tried to link the two accounts and Coinpot wants me to either sign a message with the address or send a small deposit from it to prove that I own it. Well, since it's a Free Bitcoin address, I don't technically own it. I tried to send a small deposit, but it's probably not going to come from that particular address, which means I just blew many many claims worth of faucet earnings to try to prove ownership of an address I really don't own. I contacted their support to explain the situation but I'm not holding my breath for a reply. Personally I think demanding proof of ownership of addresses for faucet earnings is overkill.

So, what I would recommend you do once you register a Moon Bitcoin account (using your Free Bitcoin address) is to immediately then register the Coinpot account as a full blown account and hopefully the address will link that way with no fuss. Then when you register for other faucets using your email address, just use the same email address as you used to register your Coinpot account. But the important thing is to register your Coinpot account first, then register for the other Coinpot faucets. Someone who does this, please post here how it went.

I unfortunately did it in the wrong order, so for now I have one Coinpot account that is linked to my Moon Bitcoin faucet address (which is my Free Bitcoin address), and another Coinpot account with no addresses that will collect earnings from Bonus Bitcoin and Bit Fun. This simply means that I'll have to accumulate 25,000 satoshis in two accounts rather than just one, so not as efficient. And in order to send the earnings from the email-based Coinpot account I'll have to locate a Bitcoin address that I actually own, which may honestly not be worth it to me at this point. I'm hoping for a favorable response from my support request.

Oh I would so love that! But won't happen this year. Cruises are still out of my budget, but maybe when DMD reach $100 I could put some of my minting and MN earnings towards a cruise for the whole family...

Enjoy the cruise and the conference. I'd especially enjoy getting the report on just how big a deal NEM is over there, and of course where DMD might get a foothold as well...

I don't know where your money is, but have you opened up a BitTrex support ticket?

Also, when you send funds directly from one centralized service (where you do not have private keys to addresses) to another centralized service, you are taking a risk. Usually it works out, but, to be more safe, you should first withdraw to a wallet you control and then from there, withdraw to your second centralized service.

Tip #5: Register a Moon Bitcoin account

Moon Bitcoin is a faucet in the classic sense. I recommend it here because like Free Bitcoin, it is a longstanding and stable faucet. You register on Moon Bitcoin by simply entering a receiving address. Enter your Free Bitcoin deposit address so that your earnings can get sent over to your interest bearing Bitcoin wallet.

Moon Bitcoin uses an intermediary service called CoinPot. It sends your earnings to CoinPot, which also aggregates earnings from other faucets. You can then request a withdrawal of the coins directly to your registration address. If you visit five other faucets which use CoinPot, then your faucet earnings will pile up faster than they would if you were only visiting one supported faucet.

Once you've registered on Moon Bitcoin, then find and register for a few other fauets, making sure to use your Free Bitcoin deposit address each time you register.

Visiting faucets is fun. You just don't want to overdo it. I recommend regularly visiting no more than ten faucets, and make sure that all proceeds from all the faucets go directly to your Free Bitcoin deposit address.

Happy Thanksgiving to all, especially those living in the US.

I'm about to join the shared MN at miningfield and I'm expecting nothing but good things. If Cryptonit says it's a good reliable service, then it's a good reliable service.

Thanks for the kind words. I like your perspective on Ethereum--focus on what that project has accomplished, which is considerable.

The two "new" coins I got into in 2014 are NEM and DNotes. With DNotes, it was the professionalism and dedication to developing solid infrastructure that won me over. With NEM, I kind of fell into it because I had been playing around with NXT, unfortunately not profitably, and some of their team decided to launch NEM and I got a stake figuring I had nothing to lose. Now I wish I'd gotten two or three. In 2015 I got involved with DMD, which by that time was already nearly three years old, and the longevity interested me. Early on I took a small writing gig with them and was very impressed with the thoroughness and ease of communication I had with the lead developer. That coin is now 4.5 years old and going strong, and paying a lot of my bills. The two newer coins I'm into now are STEEM--I really like the blogging for currency concept--(though right now I need to figure out if they're having growing pains or real issues), and VIVA, which I think is a great concept that will make it but at this stage is still a wild card.

Honestly, four or five coins is about all I can handle keeping up with, so I'm not even looking at the new ones coming out. One thing I love about DNotes is that if I'm not around for a couple months I don't have to worry that there will ever be some deal breaking piece of information that I missed that I should have acted on immediately (as in sell off all my coins). I can know that DNotes will still be there and making progress.

I just read on their thread that Bankera plans to provide both Ethereum and NEM based tokens once they are done with their ICO. You can choose at that time how you want your tokens delivered (I think).

This is really exciting news for me

Sweet! When will I be able to withdraw those tokens to a NEM wallet?