Investing in the Crypto Currency market space can be a bit daunting for traditional investors, as investing directly in Crypto Currency (CC) requires the use of new tools and adopting some new concepts. So, if you decide to dive into this market, you will want to have a good idea of what to do and what to expect.
Buying and selling CC requires you to choose an Exchange that deals with the products you want to buy and sell, be it Bitcoin, Litecoin or any of the more than 1,300 tokens at stake. In previous editions we have briefly described the products and services available in some exchanges, to give you an idea of the different offers. There are many exchanges to choose from and they all do things their way. Find things that interest you, for example:
– Deposit policies, methods and costs of each method
– Withdrawal policies and costs
– In which fiat currencies do deposits and withdrawals trade
– Products they sell, such as cryptocurrencies, gold, silver, etc.
– Transaction expenses
– where is this Exchange based? (USA / UK / South Korea / Japan …)
Be prepared for the Exchange setup procedure to be detailed and lengthy, as exchanges often want to know a lot about you. It’s like setting up a new bank account, as the Stock Exchanges are brokers of valuables and they want to make sure you’re what you say you are and that you’re a trusted person to deal with. It seems that “trust” is gained over time, as exchanges usually allow only small investments.
Your Exchange will save your CCs. Many offer “cold storage,” which means your coins stay “offline” until you indicate you want to do something with them. There is a lot of news about stock exchanges and theft of many currencies. Remember that your currencies are in a bank account on Exchange, but remember that your currencies are digital only and that all blockchain transactions are irreversible. Unlike your bank, these exchanges do not have deposit insurance, so keep in mind that hackers are always trying their best to get your cryptocurrencies and steal them. Exchanges typically offer password-protected accounts, and many offer two-factor authorization systems, which you need to keep in mind to protect your account from hackers.
Given that hackers like to take advantage of exchanges and your account, we always recommend that you use a digital wallet for your coins. It’s relatively easy to move coins between your Exchange account and your wallet. Be sure to choose a portfolio that handles all the currencies you want to buy and sell. Your wallet is also the device you use to “spend” your coins with merchants who accept CC’s payment. Both 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 printed prints. Using a cold wallet makes transactions more complicated, but they are the most secure.
Your wallet contains the “private” key that authorizes 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 move your coins anywhere they want and it’s irreversible.
Despite all the challenges and wild volatility, we are confident that the underlying blockchain technology will change the game and revolutionize the way transactions are conducted in the future.