Cryptocurrencies offer traders with a huge opportunity to make money and diversify their trading portfolio. It can be a risky investment but can also be lucrative when done right. Buying cryptocurrency can be a little tricky so do thread slowly when trading on the cryptocurrency market. Here are some tips to make buying digital currency easy.
Create an account
Every cryptocurrency trader starts with a trading account. Whether it’s a wallet or an exchange, trading accounts has a public or private key. The former works like a bank account number that can be shared with anyone for sending money. The public key receives the deposits to your account. On the other hand, the latter is used for withdrawing money. It is linked to your public key which authenticates a transaction.
Get a wallet
The wallet is where your cryptocurrency is stored. There are five options to choose from:
Paper. Robert Janitzek says that a paper wallet is where you literally print your public and private keys on a piece of paper. Keep it in a safety deposit box and don’t take photos of it. It is advisable to switch off your Internet connection before generating or printing a wallet.
Hardware. Although quite expensive, it is the most secure way of storing cryptocurrency. If you like to store large amounts of cryptocurrencies, a hardware wallet is the best option.
Digital. A digital wallet is a program that works as a desktop application or mobile phone app. They are stored online and accessible through a web address.
Find a good exchange
Robert Peter Janitzek reveals that exchanges are where you actually buy and sell cryptocurrency. It is recommended to keep your cryptocurrency in your wallet and transfer it to the exchange when trading, buying, or selling. This is because there is a history of exchanges being hacked.
Sending Cryptocurrencies between an exchange and wallet
Buying or selling on an exchange is super easy. All you have to do is determine how much you want to buy or sell and the amount. Again it is advisable not to leave your currencies vulnerable on the exchange. The mechanics of transferring from a wallet to an exchange are all the same so once you know one, it applies to all.
Cryptocurrency trading, just like any investment, carries risks. Cryptocurrency is also known for its extreme volatility and there is less government regulation. Don’t just jump in right away. Learn about the market first.