You Bought Some Crypto, Now What?
What beginner Investors Need To Know About Storing It
The cryptocurrency market is growing exponentially and needs to secure your cryptocurrency properly. With the various exchanges of the CCEX network members, you can store your cryptocurrency without any issues. The first step in storing your crypto coins is to find out what type of coin you have purchased. It will decide which exchange and wallet you use to store them. For example, if you have purchased Ethereum or Bitcoin, we recommend using a Ledger Nano S or Blockchain wallet. Both of these wallets have the functionality of a web wallet and a mobile wallet. Therefore this will allow you to access your cryptocurrency anywhere at any time. We suggest using multiple exchanges listed on the CCEX network to find out which exchange you wish to use. It will provide the highest level of security for your account and give you more flexibility on which coins and tokens you want to trade in for.
Things To Consider With Storing Your Cryptocurrency
Storing your private key – The key is your private internet key. It’s unique to you and your wallet. If you lose it, there is no way to recover it and access any of the coins in your wallet. As a result, always keep the private key safe and make sure only you know where it is.
Software safety
Using software to access your wallet is a great way to manage your coin, but always make sure you do your due diligence and research any software before downloading or installing it. Please make sure there are no viruses or malware in the software and that it is coded professionally. You can usually spot malware by the speed at which it operates and if it requires additional downloads to run. Always make sure the source of the software is trustworthy and decent.
Password safety
Never share your password with anyone. Click here !; it’s risky and can become a huge security disaster if someone does get access to it. Either use a separate password for each of your accounts or use two-factor authentication. You need both an authenticator app and a password to access your account. The more complex and varied your password is, the less likely someone will be able to guess it.
Backup
Always back up your wallet and private key. You can quickly and easily recover your wallet should anything happen to your computer or if your wallet’s private key gets lost. Make sure you back up everything in a secure place away from temptation.
Don’t reuse IPs or URLs
Avoid using the same IP or URL listed on multiple accounts. If you are connected to a VPN or proxy server, always use a new, different IP every time you access your wallet.
Use more than one account
If you use more than one account, all of the coins in each account can be backed up using the software. For example, if all of your coins are on Bittrex and Coinbase, you will want to use two separate encrypted wallets with each bank.
Ways Of Storing Your Cryptocurrency Once You Buy it
Wallets
A wallet is a program that stores your crypto coins on a personal computer or mobile device. There are several different types of wallets, but we recommend either a paper wallet or a hardware wallet for most users. Hardware wallets such as the Ledger Nano S or Trezor are encrypted devices that can be plugged into your computer and store your private information. They are very secure against hackers and provide 24/7 access to your cryptocurrency anywhere. Paper wallets are much lighter and easier to use. They are essentially a piece of paper with QR codes on them. They are highly secure and provide the same level of protection as hardware wallets, but they are much less easy to use. They do come with their code generators.
Types Of Wallets
1. Hardware wallets
These devices are very secure, have code generators, and can be plugged into your computer to store your crypto coins. There are several different wallets on the market, such as the Ledger Nano S from Trezor, which you can purchase in a bundle with bitcoin or Bitwala’s wallet.
2. Paper Wallet
Paper wallets are another popular way of storing your cryptocurrency but are not as secure as hardware wallets. They are essentially pieces of paper with QR codes on them. They are very secure but not as easy to use.
3. Mobile Wallets
You can use these wallets anywhere, and the only privacy risk is if you connect to a public Wi-Fi network, such as at a cafe or airport.
4. Online Wallets
Online wallets are provided by cryptocurrency exchanges such as the CCEX exchange and allow you to store your coins in a wallet on the exchange itself. They are quick, easy, and easily accessible from anywhere. Sometimes these online wallets offer free accounts, but they come with the cost of reduced security.
Pros And Cons Of Wallets
Hardware Wallets
The biggest pro of hardware wallets is that they are very secure and come with their code generators, creating a backup, private key if you need to restore your wallet. They are easy to plug into your computer and come with their operation manual. These wallets can also be used with multiple devices but benefit from being secure from virus attacks.
Mobile Wallet Apps
Mobile wallets provide the added benefit of accessing your coins on the go, wherever you are at. They also provide a single point of access for 2FA, making them very secure and easy to use.
Online Wallets
Online wallets are easy to use but come with extra costs associated with security features that can enhance privacy and anonymity. Online wallets are also the easiest way for new users to start trading crypto, as they can be installed within minutes.
Privacy And Security Of Wallets
Hardware Wallet
Hardware wallets are built from scratch with privacy and security. They often have multiple encryption layers and offline storage, making them very secure and hard to hack or crack into.
Paper Wallet
Paper wallets are not as secure as hardware wallets because paper is an accessible material for hackers to manipulate and spoof. You cannot use it with multiple devices and only work with one computer. They also come with a code generator that can lead to a backup or a stolen private key.
Mobile Wallets
Mobile wallets also have a lot of security features associated with them, but they still fall if they are connected to an insecure Wi-Fi network at a cafe or airport. You must disconnect from those networks before accessing your assets.
Online Wallets
Online wallets are the most accessible type of wallet and are very secure, as long as you keep your account and password secure.
2. Exchanges
Exchanges are a quick and easy way to trade your cryptocurrency back into fiat currency. They also offer much more liquidity, meaning you can make more trades and sell/buy coins faster than if you choose to use a wallet. The downside is that they are easily hacked, as every time you withdraw funds from an exchange, there is a good chance that the hacker will be able to access your private keys and drain your account of all its cryptocurrency. As a result, never use an exchange to store your cryptocurrency for more than a few weeks.
Types Of Exchange
1. Cryptocurrency/Crypto-to-crypto –
These exchanges, such as Binance, allow users to trade one type of cryptocurrency for another. You can also trade cryptocurrency back into fiat currency using the same platform.
2. Cryptocurrency/Fiat –
These exchanges, such as CCEX, allow you to trade your cryptocurrency back into fiat currency, such as USD or EUR.
3. Fiat/Crypto –
These exchanges, such as Coinbase, allow users to convert their fiat currency into cryptocurrency and vice versa.
4. Fiat/Fiat –
These exchanges, such as CCEX, allow you to trade your fiat currency for cryptocurrency.
Pros And Cons Of Exchange
*Converting –
The biggest pro of exchanging is that you can convert your cryptocurrency into fiat currency and vice versa. I am instrumental in countries worldwide that suffer from high inflation, such as Venezuela, where the value of the Venezuelan Bolivar has plummeted by over 50% in recent months. You can use them in places like South Korea, where citizens pay a large amount of money each month to buy food with their money, which makes it hard for them to invest in cryptocurrency.
* Liquidity –
The biggest con of selecting an exchange is that the platform is often hacked, and your funds are left vulnerable. It could happen to any exchange but can be particularly damaging to people who have no other options for securing their cryptocurrency. Always do your research before choosing an exchange.
* Privacy And Security –
Although online exchanges offer a lot more privacy than in-person exchanges, they still have the same risk of being hacked as other types of platforms. Always check the exchange’s security policy before depositing your funds.
* Choosing an Exchange –
Choosing an exchange can be an art form. Many competing exchanges claim to offer the best features and performance, but their features and performance may vary from user to user. Always research the top exchanges before you choose one, as you may be better off with a smaller exchange that can give you more personal attention and ensure that you get the best of their services.
3. Cold Storage
Cold storage is storing your cryptocurrency offline and out of reach from hackers. Cold storage offers the best security and allows you to avoid paying hefty fees associated with exchanges. It is a good idea to only keep a small percentage of your cryptocurrency in an online exchange to have enough money at hand to trade.
Pros And Cons Of Cold Storage
*Security –
The biggest pro of selecting cold storage is security. You will know that your tokens will not be hacked as long as you don’t lose your private keys or store them online.
* Cost –
The biggest con of choosing cold storage is paying for the extra layer of security associated with it. Cold storage involves buying a hardware wallet such as a Ledger Nano S or using a paper wallet. Both secure options require additional fees to store your cryptocurrency offline than if you were to hold it on an exchange.
4. Cryptocurrency Pools
Cryptocurrency pools are groups of people who work together to mine cryptocurrency, increasing the likelihood of finding a block reward faster. Pools may be made up of a small number of people or hundreds without any actual increase in profitability for pool users. It would help if you chose a cryptocurrency pool with a fair and transparent fee system, as pools can often charge hidden fees that eat into your profits.
*Pools –
Pools are groups of people who work together to mine cryptocurrency. The earnings of the pool members are then split up based on the amount of work they contributed towards solving a block.
* Fee System –
A sound crypto pool fee system is essential for survival, especially in smaller pools with fewer miners. A reasonable fee system will evenly split the proceeds of the pool among each member, with some pools even allowing users to set their fees.
Pros And Cons Of Cryptocurrency Pools
*Profitability –
The biggest pro of joining a cryptocurrency pool is that you will be able to make more cryptocurrency coins. You are working together with a group of people instead of on your own against the entire network.
*Security –
The biggest con of joining a cryptocurrency pool is that if the people in the pool conspire against you to get more profits for themselves, you could lose your entire stake. It is especially true for smaller pools with fewer members, as it becomes easier to conspire against individual users.
5. Peer-to-peer Cryptocurrency Exchanges
Peer-to-peer exchanges are similar to cryptocurrency/fiat exchanges, except they allow you to trade your cryptocurrency for other cryptocurrencies. All your funds will remain on the exchange until you decide to withdraw them, so using them as a trading platform is not good.
6. Cryptocurrency Mining
Cryptocurrency mining is an opportunity where people are rewarded in cryptocurrency for doing the work of solving blocks. Mining can be done in a pool and solo with no fundamental differences. It is important to note that the mining difficulty has increased substantially over the last few years. It may take a while before you start making any profits if you decide to mine cryptocurrency.
Pros And Cons Of Cryptocurrency Mining
*Profitability –
The biggest pro of mining cryptocurrency is that it can be very profitable depending on the amount of work you put into it.
* Security –
The biggest con of mining cryptocurrency is the risk of running into an issue with your host computer, which could cause you to lose all of your data and hardware.
7. Borrowing Cryptocurrencies For A Day
Various deposit/withdrawal methods are available for people who want to trade short-term cryptocurrency against fiat currencies such as USD and EUR.
Borrower
The biggest pro of borrowing cryptocurrency is that you do not have to buy cryptocurrency as a whole. You can choose how much of your cryptocurrency balance you want to borrow and how long you can borrow it.
Lender
The biggest con of lending cryptocurrency is that there are no margins with which the lender can profit from the interest rate charged on the loaned cryptocurrency.
8. Smart Cryptocurrency Wallets
A cryptocurrency wallet is an application used to store digital currency on a hardware device or computer. Cryptocurrency wallets are comparable to a bank account, except they do not offer checks and balances such as limits and fees. Instead of being able to transfer funds like a traditional bank account, digital wallets use strong cryptography to secure data and payments between users.
Stability
A cryptocurrency wallet offers significant security benefits over traditional computers due to the different security protocols created by the designers of cryptocurrency wallets.
Privacy
A cryptocurrency wallet does not require your name, address, or any other personal information that you can use for identity theft.
Technology
Digital wallets are made using a mix of proprietary and open-source software.
Cost
The biggest con of using a cryptocurrency wallet is that it can often incur fees for transactions and transfers between wallets.
9. Cryptocurrency Exchange Platforms
Cryptocurrency exchanges are platforms where you can buy and sell cryptocurrencies for other cryptocurrencies or fiat currencies. These include centralized and decentralized exchanges, two different types of cryptocurrency exchanges. Centralized cryptocurrency exchanges are either operated by a company or on a single person’s computer, used to run the exchange. In contrast, decentralized cryptocurrency exchanges are not controlled by a single entity but run by thousands of independent users.
Technology
The biggest pro of using a cryptocurrency exchange is that it is possible to trade cryptocurrencies in a way that trades price, liquidity, and different features, such as margin trading.
Transaction Speed
The biggest con of using a cryptocurrency exchange is that getting your orders filled at the desired speed is not always possible.
Security
A cryptocurrency exchange does not offer adequate security for your tokens and private keys, which can be reached by anyone who wants to gain access to your wallets and transactions.
Liquidity
The biggest con of using a cryptocurrency exchange is that there is little liquidity in the market, which means the price of a cryptocurrency can change very quickly, with minimal value loss.
10. Margin Trading Cryptocurrencies
Margin trading allows you to trade on margin and take advantage of an increased interest rate for borrowing money. Margin trading will increase your profit, but you can lose more than if you were only trading in cryptocurrency with no leverage.
Profit
The biggest pro of using margin trading is that it allows you to make a higher profit when the price of your cryptocurrency goes up than if you were only trading in cryptocurrency with no leverage.
Liabilities
The biggest con of using margin trading is that if the price of your cryptocurrencies falls, you can lose all the investments you borrowed from the exchange.
Wrapping It Up
Whether you want to buy, trade, or invest in some of your cryptocurrencies, the steps presented above will help you understand the basic rules for successful trading and investing in cryptocurrencies. This article aims to help you understand how cryptocurrencies work and what benefits they have to offer people who want to use them. This article provides only an overview and does not include all information related to cryptocurrencies, as they are evolving rapidly.