How To Start Investing In Cryptocurrency

You’ve heard many times about the growth of income from investing in cryptocurrencies. Your friends tell you they trade crypto. The news is trumpeting developing cryptocurrencies and blockchain technologies. How to jump into the last car without risks? How to start?

This will be one another guide for beginners. But we tried to make it simple and interesting. We will be glad to receive your comments.

There are only 3 essential steps before you can name yourself “crypto-trader”:

What is crypto wallet?

Crypto wallet is like a physical wallet but for digital currency. Here you’ll see your initial coins. Technically, the wallet only holds your private keys to send, receive, and spend digital money.

Two types of wallets exist, and you should know:

• Hot Wallets: Online wallets, convenient for frequent transactions.
• Cold Wallets: Offline wallets, more secure for long-term storage.

Do you have some bitcoins inherited by your grandpa? No? Then a hot wallet will be the best choice for you. You can restore access anytime you forget your password and lose your recovery phrase. Hot wallets typically offer two-factor authentication, which is familiar to most users.

Other two types are

• Custodial Wallets: a wallet where a third party (usually an exchange or wallet provider) holds and manages the private keys on behalf of the user. You trust to the wallet provider to hold and secure your private keys.

• Non-Custodial Wallets don’t store your funds and keys. A non-custodial wallet is a type of cryptocurrency wallet where the user has full control over their private keys and funds.

For new crypto-enthusiast, the custodial wallet will be a good choice. reliable custodial provider can protect your funds from scam and help to restore access. According to blockchain analysis reports, over 3 million BTC might be lost forever due to lost private keys.

The thing that can influence your choice is that wallets support a specific list of coins. Do you dream to go to the moon with a fresh meme coin or another new coin? Check that the wallet you choose supports it.

Here is check-list for choosing the crypto-wallet:

Top 10 crypto wallets

You can find reviews and comparisons in popular information platforms:

• Investopedia
• CoinDesk
• Crypto.com

Well-known rank-service in cryptoindustry are:

• Trustpilot
• Forbes Advisor

Here are some additional tips to keep in mind. First, always back up your wallet. It’s crucial to ensure you have a secure copy of your assets. 

Second, make sure to keep your wallet software updated. This helps protect you against vulnerabilities. 

And finally, be very wary of phishing scams and fake wallet apps. Stay vigilant to protect your funds!

How to buy crypto coins?

In the wallet you’ve chosen in the previous step, you may find the opportunity to buy target coins in the wallet. Before you do this, you should know that the price to buy cryptocurrency varies from platform to platform. 

The final price will consist of different types fees:

1. Trading Fees
2. Withdrawal Fees
3. Deposit Fees
4. Network Fees
5. Conversion Fees
6. Margin Trading Fees, etc.

Understanding of monetisation in each platform can be tricky. To save time, use aggregators like Fiatom.io to find the best place to buy cryptocurrency.

Types of Crypto Exchanges

A cryptocurrency exchange is a platform where users can buy, sell, and trade various cryptocurrencies. Unlike traditional stock exchanges, which facilitate trading of stocks, bonds, and other securities, crypto exchanges specifically handle digital assets and often provide a wider range of trading pairs, including fiat-to-crypto and crypto-to-crypto options.

There are two main types of crypto exchanges:

• Centralized Exchanges (CEX): Centralized exchanges are platforms operated by a centralized entity. They are the most common and often the most user-friendly.
• Decentralized Exchanges (DEX):Decentralized exchanges operate without a central authority, allowing peer-to-peer trading of cryptocurrencies.

Features	CEX	DEX
Control	Custodial: The exchange holds and manages user funds	Non-Custodial: Users have full control over their funds
Privacy	Often require user verification (KYC)	Typically does not require KYC, preserving user privacy
Ease of Use	User-friendly interfaces suitable for beginners. Provides customer service and support	Can be more difficult for beginners to use
Features	Offers advanced trading options, margin trading, and other services	Greater anonymity compared to CEXs
Security Risks	Vulnerable to hacking and breaches	Reduced risk of hacking as there is no central point of failure
Examples	Binance Coinbase Kraken	Uniswap SushiSwap PancakeSwap

Besides, there is a  service in the market that offers you help in trading: brokerage platforms –  your intermediary for trading on a large exchange.

Brokerage platforms facilitate buying and selling of cryptocurrencies directly through the platform, often at a set price. As a rule they have a user-friendly interface and are easy for beginners to use.

Unlike CEX or DEX, brokers offer fast transactions as prices are fixed and do not require matching with other users.

At the same time, brokerage services often charge higher fees compared to traditional exchanges.

Examples are Coinbase and Gemini.

External Resources for dipper diving:

• CoinDesk’s Guide to Crypto Exchanges: Overview and comparison of different types of exchanges.
• Investopedia on Crypto Exchanges: Detailed comparison of features and fees across major exchanges.
• Crypto.com University: Educational content on using various exchanges.

These resources can help you choose the best type of exchange for your needs and trading style.

These resources can help you choose the best type of exchange for your needs and trading style.