To all my beautiful Crypto Mama’s…
Last Monday we talked about why now is a good time to begin educating yourself about crypto. Today we are getting practical. No more big picture inspiration, no more lunar energy, just the real information you actually need to know before you spend a single cent on anything.
Consider this your pre-flight checklist. The stuff nobody tells you until after you have already made a mistake.
I wish someone had sat me down and explained this clearly before I started. It would have saved me a lot of confusion and honestly, some money. So let’s do this properly.
First Things First — What Are You Actually Buying?
When you buy Bitcoin you are not buying a share in a company. You are not buying gold. You are buying a digital asset that exists on a decentralised network called a blockchain. There is no head office. There is no customer service number. There is no government guaranteeing its value.
That is both the most exciting and the most important thing to understand about it.
Bitcoin was created in 2009 by an anonymous person or group using the name Satoshi Nakamoto. There will only ever be 21 million Bitcoin in existence. That fixed supply is one of the core reasons many people consider it a store of value, similar to gold but digital and borderless.
Right now there are approximately 19.7 million Bitcoin already in circulation. The remaining ones are still being released through a process called mining, which we will cover in another post. The point is, scarcity is built into the design and that matters when you are thinking about long term value.
The Difference Between a Coin and a Token
You are going to hear these words constantly and they are not the same thing.
A coin is a cryptocurrency that operates on its own blockchain. Bitcoin is a coin. Ethereum is a coin. They each have their own independent network.
A token is a digital asset that is built on top of someone else’s blockchain. Most of the thousands of smaller cryptocurrencies you see advertised on social media are tokens, not coins. They do not have their own infrastructure. They piggyback on existing networks like Ethereum.
This distinction matters because tokens are generally considered higher risk than established coins. Anyone can create a token. Not anyone can build a blockchain. When someone on Instagram is breathlessly telling you about a token that is going to make you rich overnight, this is the context you need to have in your mind.
What Is a Wallet and Why Do You Need One
This is where a lot of beginners get confused because the word wallet is a little misleading.
A crypto wallet does not actually store your crypto. Your Bitcoin lives on the blockchain. What your wallet stores is your private key, which is essentially the password that proves you own that Bitcoin and gives you access to it.
There are two main types of wallets.
A hot wallet is connected to the internet. This includes the wallet built into the exchange where you buy your crypto. It is convenient but it is also more vulnerable to hacking because it is always online.
A cold wallet, also called a hardware wallet, is a physical device that looks a bit like a USB stick. It stores your private key offline, which makes it significantly more secure. If you plan to hold any meaningful amount of crypto long term, a hardware wallet is not optional. It is essential.
We will do a full post on wallets and specifically on Ledger, which is the hardware wallet I use and trust, but for now just know that the phrase not your keys not your coins is one of the most important things you will ever hear in this space. If someone else holds your private key, they technically own your crypto. Not you.
What Is an Exchange
An exchange is the platform where you actually buy and sell cryptocurrency. Think of it like a stock exchange but for digital assets.
Some exchanges are centralised, meaning a company runs them and holds your funds on your behalf. Binance is the largest centralised exchange in the world and it is the one I recommend for beginners because of its size, security track record, and the range of educational resources it offers. Coinbase is another well known option particularly popular in the United States.
Some exchanges are decentralised, meaning there is no company in the middle. Transactions happen directly between users via smart contracts. These are more advanced and not where you want to start.
When choosing an exchange, check three things. Is it regulated in your country. Does it have strong security measures including two factor authentication. And does it have a clear process for verifying your identity, which is actually a good sign not a bad one, because regulated exchanges that follow KYC rules (Know Your Customer) are far less likely to disappear with your money.
How Much Should You Start With
This is the question everyone wants answered and I am going to be very straightforward with you.
Start with an amount you are completely comfortable losing. Not because you will necessarily lose it, but because your first purchase should be about learning the process, not making a profit. You need to feel what it is like to buy, to see it in your wallet, to watch the price move up and down without panicking.
For most people that is somewhere between 50 and 200 euros or dollars. Enough to be real. Not enough to keep you awake at night.
You do not need to buy a whole Bitcoin. This is one of the biggest misconceptions beginners have. Bitcoin is divisible into tiny units called satoshis. One Bitcoin equals 100 million satoshis. You can buy 20 euros worth of Bitcoin and you will own a small fraction of one coin. That is perfectly valid and it is exactly how most people start.
The One Thing That Will Protect You More Than Anything Else
Before you buy anything, write down your seed phrase and store it somewhere safe and offline.
Your seed phrase is a set of 12 or 24 random words that your wallet generates when you set it up. It is the master key to your entire crypto wallet. If you lose access to your wallet for any reason, your seed phrase is the only way to recover it.
Do not photograph it. Do not store it in your email or in a note on your phone. Write it on paper, ideally two copies, and keep them in separate safe locations. This is the single most important security habit in crypto and the one most beginners skip because it feels overly dramatic.
It is not dramatic. It is essential.
Crypto is one of the most exciting financial technologies of our generation and it is genuinely accessible to everyone. But it requires you to take your own security seriously because there is no bank to call if something goes wrong. That responsibility is part of the deal and once you understand it, it actually feels empowering rather than scary.
You are your own bank, Mama. And that is a very powerful thing to be. 🌙