Investing in the Cryptocurrency market can be a little scary for a traditional investor, as investing directly in Cryptocurrency (CC) requires the use of new tools and the adoption of some new concepts. So, if you decide to dip your toes in this market, you will want to know very well what to do and what to expect.
Buying and selling CCs requires you to choose an exchange that deals with the products you want to buy and sell, whether it’s Bitcoin, Litecoin, or one of more than 1,300 other players. In previous publications, we have briefly described the products and services available at several exchanges to give an idea of the different offers. There are many types of stock exchanges to choose from and they all do the right thing for you. Look for things that are important to you, such as:
– Deposit rules, methods and costs of each method
– Withdrawal policies and costs
– What fiat currencies do they deal with for deposit and withdrawal
– Crypto coins, gold, silver, etc. Products they deal with
– Operating expenses
– Where is this exchange located? (USA / England / South Korea / Japan …)
Because stock exchanges generally want to know a lot about you, be prepared for a detailed and lengthy procedure for setting up an exchange. Exchanges are like opening a new bank account because they are brokers of valuables and want to make sure you have what you say and are a reliable person to work with you. “Trust” is gained over time because exchanges usually only allow small amounts of investment to start.
Your exchange keeps your CCs for you. Many offer “cold storage”, which means keeping your money “offline” until you say you want to do something with them. There are several reports of stock exchanges being attacked and many coins stolen. Think of your coins as something like a bank account on the Exchange, but keep in mind that your coins are only digital and all blockchain transactions are irreversible. Unlike your bank, these exchanges do not have deposit insurance, so remember that hackers always do their best to take and steal your Crypto Coins. Exchanges generally offer password-protected accounts, and many offer two-factor authorization schemes – something that is seriously considered to protect your account from hackers.
Given that hackers love to hunt on stock exchanges and accounts, we recommend that you always use a digital wallet for your money. It is relatively easy to transfer money 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 the device you use to “spend” your coins with merchants who accept them for payment. There are two types of wallets: “hot” and “cold”. Hot wallets are very easy to use, but expose your money to the Internet, but not on the Exchange server, but only on your computer. It uses off-the-shelf storage devices such as cold wallets, special hardware memory sticks, and simple copy output. Using a cold wallet complicates operations, but is the most reliable.
Your wallet has a “private” key that allows all the transactions you want to start. You have a “shared” key shared on the network so that all users can identify your account when they participate in a transaction with you. When hackers get a private key, they take your money wherever they want, and it’s irreversible.
Despite all the challenges and wild variability, we are confident that the basic blockchain is a game changer and will revolutionize operations as it progresses.