Cryptocurrency is becoming an increasingly popular investment tool, but novice traders are often repelled by the first difficulties. We tell you how to take the first step and start trading digital assets
Cryptocurrency: where to start
First, let’s define what a cryptocurrency is. This will help you understand what you will be dealing with – as in the case of other industries, successful trading requires a certain amount of expertise in the field.
In 2022, there are hardly any people left (at least in developed countries) who have never heard of bitcoin. Cryptocurrency, which began to conquer the world back in 2009, has already celebrated its tenth anniversary. But at the dawn of its existence, few could have imagined that bitcoin would become so popular. Bitcoin, like any other cryptocurrency, is a file that is stored in a digital wallet. Each transaction with a token is recorded in an open database – blockchain. Thanks to cryptographic protection, the maximum level of security is ensured, so the same coin cannot be spent twice or copied.
Proponents of cryptocurrencies claim that they are safe and completely transparent. Opponents also express concerns that digital money can be used by criminals to transfer funds anonymously. However, cryptocurrencies, and especially bitcoin, are gradually starting to accept more and more legal companies.
Since we are talking about security, it’s time to remind you about the importance of keeping your data safe on the Internet. There are general rules in crypto trading:
- use long and complex passwords;
- change passwords periodically;
- do not use the same password on different sites;
- do not follow suspicious links;
- do not leave personal data on sites you do not trust.
Particular attention should be paid to the private key and seed phrase that are generated when creating a bitcoin wallet (we will explain how to start it later). Your private key is a cipher with which you can always access your bitcoins. Accordingly, if someone else takes possession of it, then the coins will become his property.
Just as disastrous for your finances can be the consequences of losing a seed phrase. It is necessary to restore access to the bitcoin wallet in case of loss of the private key.
Cryptocurrency trading for beginners
We figured out the basics of cryptocurrencies and information security. Now let’s move on to the more practical part – crypto trading for beginners. You will need a cryptocurrency wallet (it is safer than storing coins on an exchange), as well as registration and a verified profile on a crypto exchange.
How to start a cryptocurrency wallet
A little higher, we already talked about the security of bitcoin wallet data. There are several types, each with its own pros and cons. Let’s look at all types:
Paper wallet. One of the easiest and most reliable ways to store cryptocurrencies. You can create such a wallet using offline services – applications that generate keys for a wallet without a network.
Since the paper is not connected to the Internet, the chances of your coins being stolen by hackers are minimal – unless, of course, you keep a photo of the data sheet on your phone.
At the same time, paper as a physical medium is exposed to the outside world. It can get wet in a flood, burn out in a fire, the text on it can fade from the sun. Therefore, ideally, this document should be stored in a fire and water resistant, dark place. Preferably, also in a safe so that they cannot steal it.