Crypto for beginners: where to start and where money gets lost
You do not need to understand crypto like a programmer. It is enough to know what you are buying, how not to botch a transfer and how much you can afford.
- Three coins are enough for a beginner: bitcoin, ethereum and stablecoins.
- Money is lost not on the price but on a transfer over the wrong network — always send a test amount first.
- Crypto is a small part of your investments: up to 5–15%, bought little by little.
What it is, in plain words
Cryptocurrency is digital money that no bank and no state issues. The record of who holds how many coins is kept on thousands of computers at once and cannot be forged.
Two things follow. A transfer cannot be reversed, and nobody will return your coins if you make a mistake. In exchange, money can be sent to any country in minutes, with no bank and no permission.
Three kinds of coins to know
- Bitcoin (BTC). The first and largest coin. Its supply is capped, so people buy it as “digital gold” for years ahead. The price swings a lot.
- Ethereum (ETH). The second largest coin. Thousands of apps and other coins run on its network.
- Stablecoins (USDT, USDC). Coins pegged to the dollar: one coin is about one dollar. You do not earn on their growth; you pay, transfer and wait out falls with them.
Everything else is called altcoins. Some do well, but most lose nearly all their value over time. A beginner is wise to start with the first three.
Where people buy crypto
The simplest way is a large exchange. You sign up, verify your identity with a passport and buy coins by card or transfer.
- Identity verification (called KYC) is mandatory on all large exchanges. That is normal: deposits and withdrawals do not work without it.
- P2P is the part of an exchange where you buy coins from another person while the exchange holds them until the payment arrives. People use it where a card does not work directly.
Bybit is one of the large crypto exchanges: card purchases, P2P and stablecoins in one app.
Affiliate link: if you sign up through it, SK Invest may earn a reward. Not financial advice.
Sign up on Bybit →Your first purchase, step by step
- Sign up on an exchange and turn on app-based two-factor protection right away.
- Pass identity verification.
- Buy stablecoins (USDT or USDC) for a small amount — one you would not mind losing to a mistake.
- Swap part of it for bitcoin or ethereum in the ordinary trading section (“spot”).
- Stay away from leverage, futures and “earn up to 100% a year”. That is where beginners lose money fastest.
Networks and addresses: where most money is lost
The same coin can travel on different networks. USDT, for instance, exists on Tron (TRC-20), Ethereum (ERC-20) and others. A network is like a mode of transport: send a parcel by train while the recipient waits at the airport, and it will not arrive.
- The sender's and the recipient's network must match. This is the most common cause of lost money.
- Copy the address, never type it, and check the first and last characters.
- If the exchange asks for a “memo” or “tag”, provide it. Without it the transfer reaches the exchange but not your account.
- The fee depends on the network. A transfer can cost under a dollar on one network and ten times more on another.
Where to store it
An exchange is convenient, but in practice it holds the coins. Exchanges get hacked: in February 2025 about $1.5 billion worth of coins was stolen from Bybit — the largest theft in crypto history.
A sensible rule: keep on the exchange what you use, and in your own wallet what you save for years. How to store it properly is in the guide “How not to lose your crypto”.
How much to put in
Bitcoin has fallen 70–80% several times in its history. So crypto is a small part of your investments, not the core. The guideline this site uses: up to 5–15% of investments, and the older and more cautious you are, the less.
Buy a little and regularly rather than everything at once: that way you do not land on a peak. How that worked historically is in the guide on buying bitcoin every month.
Five beginner mistakes
- Buying at peak hype. When everyone talks about a coin, most of the rise is usually behind it.
- Trading with leverage. Borrowed money turns an ordinary price swing into a total loss.
- Everything in one unknown coin. A promise of “100x” most often ends at zero.
- Sending on the wrong network. Check the network every time.
- Trusting “helpers”. Nobody will earn money for you. Whoever asks you to send coins or reveal a seed phrase is a thief.
Checklist
- An account on a large exchange with two-factor protection on.
- The first purchase is a small amount.
- Network and address checked before a transfer, a test amount sent.
- Crypto is a small part of your investments.
- Purchases are small and regular.
- Leverage, futures and “guaranteed income” — skipped.
Bybit is one of the large crypto exchanges. Crypto is high risk: only invest money you can afford to lose.
Affiliate link: if you sign up through it, SK Invest may earn a reward. Not financial advice.
Open Bybit →Decide what share of your investments goes to crypto and into what exactly.
Splitter →This article is educational and is not investment advice.