Whether it’s Bitcoin or Crypto: Here’s how to buy and store cryptocurrencies Pt 2

 

Using cryptocurrencies entails a different approach than regular currencies. The concept behind them makes using them require some understanding. 

Signu up on an exchange

The first step to getting involved with cryptocurrencies would be to choose an exchange. An exchange is an online platform where you can buy, store, sell and even trade cryptocurrencies. There are several exchanges available to use. It is wise to go for popular ones that are well trusted. Some popular exchanges include Binance, Buycoins and Bundle, among others. 

While cryptocurrencies are decentralized currencies that can be used anonymously, some exchanges use KYC (know your customer) protocols, which means your identity is tied to your crypto wallet. However, these details are only known to the exchange and not the public. 

There are exchanges that allow users to remain anonymous. These exchanges are, themselves, anonymous and have no known CEO, staff, or location, thus, making them risky to use. 

Buy some crypto

Once you’ve chosen your preferred exchange after enough research, you can proceed to buying a currency. Not all exchanges can hold all currencies. There are about 1,600 cryptocurrencies in existence but it’s best to stick to start with the most popular one as a beginner. 

Most exchanges offer different payment options for currencies. Pick the most suitable payment options and the requested currency would be delivered to your wallet.

Note that some banks do not support crypto related transactions. So whether buying or selling, it is important to verify the status of the bank when it comes to crypto transactions. 

Choose a storage wallet

There are two ways of storing cryptocurrencies; they can be stored hot or stored cold. 

Hot wallets

Hot wallets are online wallets. The wallet provided by an exchange is an example of a hot wallet. They are connected to the internet at every point in time, and are best for trading and facilitating speedy transactions with cryptocurrencies. 

While hot wallets  are convenient for transactions, they are, however, susceptible to hacks. 

Hacks are not frequent, but they have happened before. Hot wallets are best for trading or holders with little amounts of cryptocurrencies. 

Cold wallets

Cold wallets are simply wallets not connected to the internet. They can simply be referred to as offline wallets. 

A popular type of cold wallet is the hardware wallet. It is a flash drive or USB device where cryptocurrencies can be kept. The user’s private key is kept securely offline, and isn’t prone to hacks or viruses. 

Storing cryptocurrencies offline provides more security than storing them online. However, it requires a bit more knowledge to use. For crypto beginners, online wallets would suffice, as security protocols such as two-factor authentication, provide significant security for online wallets. 

Using more than one exchange could be a way to discover which is preferable. However, security and payment options should be a priority in choosing an exchange. 

When it comes to trading cryptocurrencies, things are more complicated but learnable. A comprehensive understanding of trading is required before delving into it. 

Getting started with cryptocurrency trading

Trading cryptocurrencies are similar to trading traditional stocks but with higher risks. Trading in any market comes with its risks but trading cryptocurrencies is significantly harder due to its volatility.

Investing in cryptocurrencies differs greatly from trading and should be treated as such. New traders often approach trading like investing which could lead to a loss. 

While trading might be trumendously risky, some people have made substantial profits from it. Enough patience and expertise could make a lot of difference in crypto trading. 

Regardless of what is done with cryptocurrencies doing your own research is imperative.

For more of cryptocurrency trading, read this guide: What is Cryptocurrency Trading? A Quick Step-by-Step Guide 

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