The world of finance was never the same when the first cryptocurrencies came around. The number of users grew bigger each year and now there are lots of crypto users. But that doesn’t mean that there are too many of them, and you can join their ranks if you wished it so.
Cryptocurrencies come with many benefits, like keeping your identity anonymous and off the hands of third parties like banks. As digital currency users, you’ll be able to enjoy these perks. But before you start owning and trading crypto you’ll need to learn the basics.
What Is a Cryptocurrency?
This kind of currency is digital. In other words, it’s online and it doesn’t come in the form of coins or banknotes. You can’t touch it, but that doesn’t mean it doesn’t have value. As mentioned before, this kind of currency keeps your identity safe when you’re online. Third parties can’t keep records of your transactions.
Instead, blockchain technology is used to keep track of them and you have a virtual ledger where all of them are kept. And making a transaction is pretty simple. All you need are 2 keys. The first one is a public one and the second one is a private one. The public key links you to another user’s public key when making a transaction. The private one is there to confirm each transaction and also lets you access your account.
You can also use these kinds of currencies to make purchases. A good number of businesses and companies accept them as viable payment methods. But the thing that makes each cryptocurrency valuable is its profit potential. This is usually the reason why so many traders are present on trading platforms.
Each crypto comes with high volatility which means that its value can either go up or down. You can hold a crypto asset and wait for the value to grow and then sell. Alternatively, you can buy some assets when their value is low. This is a general trading theory every beginner should know. But you’ll also need to know a bit more if you’re looking to trade.
Picking the Right Platform
There are lots of crypto users out there and there are lots of platforms they can trade on. You can stick to the country you’re from when looking for such a platform. For example, if you’re from Australia then you can go for the best trading platform Australia has to offer. Alternatively, you can go for trading platforms that operate in multiple jurisdictions.
But before you register you’ll need to do some research. In other words, you can go for reputable platforms and see what kinds of perks they offer. Make sure to go for customer reviews because as a customer you’ll need to be taken care of as well.
Another thing to research is the platform’s history. These are online platforms and hackers are looking for the next big score. They have hacked platforms in the past and rid users of their assets. If a platform has been hacked a couple of times then there’s a high probability that it will be hacked again. This means it isn’t safe, which means you should go for another platform.
Getting a Wallet
Just like in the real world, where you need a wallet to hold your credit cards, coins and banknotes, you’ll need a wallet for your cryptocurrencies. There are several companies that produce such wallets and all of them come with their pros and cons. Just like with the platforms, you can go for a popular wallet, but not before researching it.
See the pros and cons as well as customer reviews of it before sticking to one. It’s also vital to know that there are different kinds of different kinds of crypto wallets available. The main or general division is in hot and cold wallets. The hot ones are online while the cold ones aren’t.
In other words, the hot ones are called hot because you can access them online. That makes them somewhat convenient because you can make transactions and trade assets whenever you want them. But they’re also prone to hacker attacks and other breaches of security. This doesn’t mean that there are no others that come with good security measures.
The cold ones don’t share access online and work as storage. You can store a finite amount of assets in them and not fear that someone will hack them and steal your assets. But you’ll need to connect to the net every time you’re looking to trade, sell or make a purchase.
It’s up to you what kind of wallet you’re going to go for.
Now that you know the basics, you can start trading digital currencies. Once you’ve picked your wallet and platform you can start with one kind of asset and then expand your portfolio. Naturally, you’re free to experiment with different kinds of trading, wallets, and platforms.