Interested in joining the crypto revolution, but are feeling a little noobish where to start first?
Choosing Your First Crypto Exchange
First thing to do is choose your first crypto exchange. Finding the right exchange is essential in an unpredictable and volatile market for those who start their crypto adventure for the first time.
There are many crypto exchanges that cater to beginners, but some of the best ones are:
- Coinbase: A well-liked and reliable exchange that provides a straightforward and easy-to-use interface, more than 250 cryptocurrencies, advanced trading functions, and rewards for staking. Coinbase also offers a learning platform that pays you for watching educational videos on crypto.
- Binance: The leading crypto exchange with a mobile app, low fees, 350+ cryptocurrencies, trading bots, and futures trading. Binance has a launch pad where you can invest in new crypto projects and an academy that helps you learn about the basics of crypto.
- Kraken: Security focused exchange that has PoR, 200+ crypto currencies, low fees, and margin trading. Kraken also has a pro app that provides advanced charting and trading tools.
- eToro: A social trading platform that lets you copy the trades of other users, trade 250+ cryptocurrencies, and provide a range of investment products. eToro also has a community where you can interact with other traders and learn from them.
- MEXC: A low-fee exchange that provides 0% spot trading fees, more than a thousand cryptocurrencies, staking rewards, and futures trading. MEXC also has a copy-trading function that allows you to mimic the actions of expert traders.
These are some of the best crypto exchanges for newbies; however, you should always do your own research before selecting an exchange. It’s also important to know that the crypto market is risky and volatile, so invest only what you are willing to lose.
Buying Your First Cryptocurrency
Purchasing your first cryptocurrency may be a straightforward and enjoyable procedure. Here are the basic steps you need to follow:
- Choose a platform to buy cryptocurrency: You can choose to use a crypto exchange, brokerage, or any other method. They all have their own pros and cons, including cost, safety, and availability.
- Set up and verify your account: In order to register you will have to fill in a form with your personal details and submit certain documents to prove your identity. This is vital for many platforms to be able to adhere to anti-money laundering and tax laws.
- Deposit money to invest: Link your bank account, debit card, or credit card to the crypto platform and deposit cash to buy cryptocurrency. Some platforms may have a minimum deposit amount or a limit to how much you can buy or sell.
- Place your cryptocurrency order: Choose the particular cryptocurrency that you would like to buy, such as Bitcoin, Ethereum or Dogecoin and enter your budget. Verify the order and execute the trade.
- Choose a storage method: After purchasing your crypto, choose how you would like to store it. A crypto wallet, which can be software or hardware based, is used to store the private keys and send/receive cryptocurrencies. Alternatively, you could use a custodial service that holds your crypto and offers an intuitive interface.
Difference Between A Crypto Exchange And A Wallet
A crypto exchange is a digital marketplace where you can buy, sell, and trade various cryptocurrencies which could be either Bitcoin, Ethereum or even Dogecoin.
However, a crypto wallet is more of a tool or gadget that enables you to store your digital coins, receive payments and send them across to other people. With a crypto wallet, you can also retrieve your private keys which are almost like passwords proving that the crypto belongs to you.
Some crypto exchanges even have wallets for storing your cryptocurrencies. Unfortunately, if the exchange gets hacked, goes bankrupt, or shuts down, you will be left with no crypto coins.
What Happens When Crypto Exchanges Go Bankrupt?
Bankruptcy of a crypto exchange means that the exchange is unable to repay its debts or continue with operations. This may elicit serious negative outcomes to the customers that have stored their crypto assets on the exchange.
Some of the factors that can affect the outcome of a crypto exchange bankruptcy are:
- Some cryptocurrency platforms keep your crypto funds and passwords. This in turn means that if there are some issues that arise between you and the platform, your coins could easily be stolen during the process of recovery.
- The location of the exchange’s legal jurisdiction is also relevant. Every country has its own rules and regulations regarding crypto exchanges and the bankruptcy process. Other countries could be less friendly for customers or have clearer but strict regulations.
- Another thing to consider is the amount of safety and security provided by the crypto exchange. It is advisable to look for other avenues that have better security measures in case of any mistakes with your trades. Customers should, therefore, evaluate the security and insurance features available on the exchange as well as how they respond in case of bankruptcy.
The best way to avoid losing your crypto assets in the event of a crypto exchange bankruptcy is to use a non-custodial wallet that gives you full control and ownership of your crypto assets and private keys.
Crypto is an amazingly evolving realm. Obviously, it isn’t enough to understand what you are doing when you get your first crypto since this is the initial step in being responsible for any transaction.
In addition, you need to ensure that your crypto is safe from hackers, thieves and fraudulent websites. Ensure that you understand the laws and regulations of the country where you are in business, as well as be aware of security measures and insurance offered by the platform used.
Crypto is constantly changing, so you need to be alert and careful. You will have to do your own research and learn all that there is to know about the topic. As a golden rule, invest only what you can lose. Cryptocurrency may be appealing and beneficial, but you should always be prepared.