Investing in Crypto Currency market space can be a bit daunting for a traditional investor, as investing directly in Crypto Currency (CC) requires the use of new tools and the adoption of new concepts. So if you decide to get your fingers into 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 in the products you want to buy and sell, be it Bitcoin, Litecoin or more than 1300 tokens in play. In previous editions we have briefly described the products and services available in some exchanges so that you can get an idea of the different offers. 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 for each method
– Withdrawal policies and costs
– What fiduciary currency they treat for deposits and withdrawals
– The products they deal with, such as cryptocurrencies, gold, silver, etc.
– Transaction costs
– Where is this Exchange? (USA / UK / South Korea / Japan …)
Prepare for an accurate 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 intermediaries of valid objects, and they want to make sure you say that you are who you are and that you are a reliable person to deal with. It seems that “trust” is achieved over time, as exchanges typically only support small amounts of investment.
Your Exchange will store them in your CC repository. Many offer “cold storage” which means that your coins are kept “offline” until you indicate that you want to do something with them. There are news outlets that have exchanged and stolen a lot of coins. Imagine that your coins are in something like an Exchange bank account, but remember that your coins are digital only and all blockchain transactions are irreversible. Unlike your bank, these exchanges do not have deposit insurance. So keep in mind that hackers are always trying to get and steal everything from Crypto coins. Exchanges generally offer password-protected accounts, and many offer 2-factor authorization schemes, something to consider when protecting your account from hackers.
Keeping in mind that hackers love to exchange and capture your account, we always recommend using a digital wallet for your coins. It’s 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 a device you use with merchants who allow you to “spend” your coins for CC payment. The two types of wallets are “hot” and “cold”. Hot wallets are very easy to use, but they leave your coins exposed 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.
There is a “private” key in your wallet that allows you to start all the transactions you want. You also have a “public” key that is shared on the network so that all users can identify your account when they make a transaction with you. When hackers get your private key, they can take your coins wherever they want, and it’s irreversible.
Despite all the challenges and wild volatility, we are confident that the technology of the underlying blockchain is a game changer and will change the way transactions are conducted in the future.