Investing in the Crypto Currency market space can be a bit daunting for a traditional investor, as investing in Crypto Currency (CC) directly requires the use of new tools and the adoption of new concepts. So if you decide to immerse your fingers in this market, you want to have a very good idea of what to do and what to expect.
CC buying and selling requires you to choose an Exchange that deals with the products you want to buy and sell, be it Bitcoin, Litecoin or more than the other 1300 tokens in play. In previous editions we have briefly described the products and services available in some exchanges to get an idea of the different offerings. There are so many exchanges to choose from and everyone does things their way. Find things that are important to you, such as:
– Deposit policies, methods and costs of each method
– Withdrawal policies and costs
– What fiat currency they use for deposits and withdrawals
– The products they sell, such as cryptocurrencies, gold, silver, etc.
– Operating costs
– Where is this Exchange? (USA / UK / South Korea / Japan …)
Get ready for a detailed and lengthy Exchange setup procedure, as Exchanges generally want to know a lot about you. It’s similar to setting up a new bank account, as Exchanges are stockbrokers, and they want to make sure you’re sure what you’re saying and that you’re a reliable person to deal with. It seems that “trust” is gained over time, as exchanges typically only accept small amounts of investment to begin with.
Your Exchange will store your CCs for you. Many offer “cold storage,” which means your coins are kept “offline” until you indicate that you want to do something with them. There is considerable news that the exchanges are being hacked and many coins have been stolen. Consider that your coins are in an Exchange bank account, but remember that your coins are digital only and all blockchain transactions are non-refundable. Unlike your banks, these Exchanges do not have deposit insurance, so keep in mind that hackers are always there trying to get and steal your Crypto Coins. Exchanges generally offer password-protected accounts, and many offer two-factor authorization schemes – something that should be taken seriously to protect your account from hackers.
Considering that Hacker likes to capture Exchanges and your account, we always recommend using a digital wallet for your coins. It’s pretty easy to move coins between your Exchange account and your wallet. Make sure you choose a wallet that handles all the coins you want to buy and sell. Your wallet is also a device you use to “spend” with merchants who accept your coins for payment CC. The two types of wallets are “hot” and “cold”. Hot wallets are very easy to use, but they reveal your coins on the Internet, but only on your computer, not on the Exchange server. Cold wallets use offline storage media, such as specialized hardware memory sticks and simple paper printing. Using a cold wallet makes transactions difficult, but they are the safest.
Your wallet has a “private” key that allows you to start all the transactions you want to start. You also have a “public” key that is shared on the network so that all users can identify your account when they participate in a transaction with you. When hackers get your private key, they can take your coins to wherever they want, and it’s irreversible.
Despite all the challenges and wild volatility, we are confident that the underlying blockchain technology is a game changer that will reverse the way transactions are conducted in the future.