Investing

Plain and simple, you can buy cryptocoins now and hold on to them, hoping their value will rise when you can sell them for a profit.

It’s the same as investing in gold, silver, stocks, bonds, etc. Buy low, sell high.

On the technical side, this is a much easier way to get into cryptocurrencies. But you still have to jump through a few loops.

First of all, you need a way to pay for the cryptocoins. You do this by signing up with a bitcoin wallet and platform site where you can use USD (and possibly other currencies, but since I’m in the US I’ll only talk about doing this with USD) to buy and sell Bitcoins.

I use Coinbase. You sign up with Coinbase and connect your bank account so you can fund your account. Once you have money in your Coinbase account, you can use this to buy Bitcoins.

Now, they only deal in Bitcoins, but that is fine. I know I talked about other cryptocurrencies earlier, like Litecoin, but the grand-daddy of them all is Bitcoin and honestly if you’re going to use any cryptocoin like currency, it will probably be Bitcoin anyway. You may buy/sell/earn other cryptos, but you will eventually trade them into Bitcoins so you can use them.

Once you buy Bitcoins, you can then use them in one of the many exchanges to buy other cryptocoins. BTC is like the USD of the world. You can trade almost any currency to/from Bitcoins.
I’ll give you a quick example to clarify.

Joe wants to buy Litecoins. At around $21 each, he feels that the price is good and the long term potential for profit is high. He has read where LTC might reach $100 by the end of 2014.
Joe opens an account at Coinbase. He verifies his bank account and deposits $800 into his Coinbase account. 

Joe then uses Coinbase to buy Bitcoins directly at their current buy price. Since right now it is exactly $800.00, he gets exactly one BTC. 

Joe then opens an account with Cryptsy, a cryptocurrency exchange. 

Within Cryptsy, Joe creates a new deposit address. This is a long alphanumeric string like 17jUWvAWa79boxmgdnEtf4JLv4CBUW8b3D. 

Joe then goes back to Coinbase and chooses to Send Money. He copies the deposit address from Cryptsy, the amount he wants to send (in this case 1.00 BTC) and clicks to send the money. 

After a period of authorization for this transaction (could be 15 minutes or longer) he goes back to Cryptsy and sees that he now has a balance of 1.00 BTC. 

Within Cryptsy, he goes to the LTC/BTC market to buy LTC. 

The price per LTC is currently 0.02629412 so he can buy 37.95 LTC with his 1.00 BTC. This includes a 0.20% fee (in BTC). I figured this out just by putting in different amounts for how much LTC I wanted to buy until my net total was just barely under 1.00, since that is all I had to invest. 

Joe clicks on Submit Buy Order and he buys 37.95 LTC. At around $21 that is worth $796.95, so he paid around $3 in fees. Not too bad.

 At this point you have a balance of 37.95 LTC at Cryptsy. You can use this to buy any cryptocurrency that trades on Cryptsy.

You now have two options: leave the balance at Cryptsy, or withdraw the balance to a local wallet.