Cryptocurrencies are decentralized and digital currencies. They are highly traded throughout the world because of its features of faster transactions, lower fees, and decentralized nature. The choice of different tools, strategies, and trading platforms has a long term impact on your profits when you are coming out to trade cryptocurrency. There have been several changes in the crypto market over the years, but Bitcoin has stood apart from others since the 2000s. There are thousands of cryptocurrencies floating out on the market now, but Bitcoin is still the most popular one.
If a person is completely new to the crypto industry then it is really important to learn about the difference between the “fundamentals” and “technicals” of cryptocurrencies. And a whole range of other information about the same. In this article, we’ll look at what cryptocurrency is and what are the steps to be followed by beginners while crypto trading.
WHAT IS CRYPTOCURRENCY?
Cryptocurrencies are digital currencies that are secured using cryptography methods and can provide benefits depending on their features. As mentioned above, Bitcoin-which was created in 2009 has been simply designed to be a virtual form of money- became the first-ever cryptocurrency. However, with only bitcoins, trading cannot take place.
When people are talking to trade digital currencies, they need to use a crypto trading exchange. Exchanges are the platforms where the trading takes place. The buyers and sellers meet on a platform and trade according to their agreed prices. For example, if you are holding Bitcoin and want to sell it for Litecoin, an exchange will help you find a Litecoin seller to trade with.
Exchanges usually charge a fee (brokerage) for doing this, which differs from platforms to platforms.
With a billion dollars worth of coins being bought and sold every day, cryptocurrency trading is now really popular all around the globe.
STEPS TO BE FOLLOWED BY BEGINNERS
First things First! One should have the entire information and current market price of the cryptocurrency. For this, thorough research is required either through web pages or people who have knowledge and experience about crypto trading.
Exchange Platforms play a major role in trading so it is important to choose them wisely based on a few points.
- Validity: Before going to a platform, check whether the platform is available in your region or not. Several prominent exchange platforms are not available in India.
- Reputation: Reputation is one of the biggest features of exchange and thus needs to be checked properly. Read the client’s review given on Twitter or the web pages of the platform only. Check the details like is the platform safe? Has it ever been hacked?
- Exchange Rates: Up next we have the exchange rates. Every exchange has different rates for digital assets. Some platforms even promise for the lowest price but have hidden fees on the transaction process increasing the net worth of the cryptocurrency. Do comprehensive research about 3-4 crypto exchanges and compare its prices and features to choose the best among all.
- Safety: Always choose exchanges that need some sort of ID verification from you. Platforms abide by KYC and AML regulations and thus ask for ID Verification, which makes it a trusted one. At the end of the day, it is your hard-earned money. You must take that extra step to keep it secure.
To store and further trade with your cryptocurrency, you must have a wallet. The wallet saves your private key and public address which helps you store, send, and receive cryptocurrencies. Do not give out your private key to anybody. The private key is for you and you only.
Digital wallets differ in features. Some of the wallets are particularly for one cryptocurrency like Bitcoin wallets while others allow you to store different coins. Some digital wallets are operated by the exchange while in others custody is given to clients itself. One can even choose wallets outside that are not provided by exchange platforms.
LET’S START TRADING
Now that we have found the right platform and digital wallet, it is time to start trading. There are a few steps to follow:
- Head over to exchange to create an account.
- Complete KYC and ID Verification and add your bank details from which you want to deposit funds.
- Deposit money in the account using UPID/ Debit Card/ Wallets and Net Banking.
- Go to the main page and select the cryptocurrency you wish to buy.
- Select your coin pair, fill the required details, and click on the buy button.
- And the purchase has been done!
Crypto trading is as simple as using a new mobile app. It has its own advantages and disadvantages, but in the long run, it provides benefits. Many people depend on it as an income source. But you now know how to make your first crypto purchase. Just remember, it is very important to talk to a financial advisor before investing!