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Buy Cryptocurrency Correctly, or Factors to Consider when Purchasing Cryptocurrency

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In the modern world, there is hardly a person left who hasn’t heard of cryptocurrencies. The interest to digital coins has been growing constantly for a couple of decades. That’s why it is not surprising if you would like to try a luck with them, too.

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However, what coin should you choose? And how to buy that crypto-coins? These and some more questions we will discuss further.

 

Choose the Cryptocurrency Correctly

There are thousands of cryptocurrencies nowadays. To invest in crypto-coins wisely, you need to know which of them are here to stay and which will disappear in a very short time. The most reliable coins are those that have been around for a while, and those that have a proper market capitalization. A perfect coin is the one that combines both of the factors.

We should admit that most of the coins are either worthless or will vanish as soon as they have appeared. To avoid disappointments, you can pay attention to the following coins:

  • Bitcoin, the most expensive and the most reliable crypto-coin with the highest market capitalization. BitCoin is used to pay everywhere: for online games, freelancer services, for online gambling like on CasinoHEX.at, to finance startups and blockchain projects (ICO);
  • Ethereum, with its completely new approach to the market;
  • Ripple, a coin directed to banks and big financial institutions mostly;
  • Litecoin, with its dedicated developers` team and a clear strategy.

 

Some people still fall for altcoins, with their promises to make you rich safely and fast. However, don’t fall for it. Even though we agree that in some cases the scenario would work out, however such cases are rare.

Wall Street investigations show that 20% of all ICO are scams even without any other intention. It means that 20% of all the ICO are planned with an intention to escape with your money. The bad thing is that when an ICO is organized, nobody knows what it is going to end with.

Hence, if you are new in this, it is better to buy coins that have established some reputation and are worth your money. And when you get more experienced in the cryptocurrency market, you can try your luck with some promising altcoins.

 

Storage Place for Your Coins Matters

If you are thinking of purchasing some crypto-coins, you might be already aware that you cannot store them just where you want. Crypto-coins are software, so, storage shall be appropriate.

To keep your crypto-coins safe, you need a special wallet. There are several types of wallets. All of them have their benefits and drawbacks. It depends on you only which wallet you want to use.

 

Some More Words About Cryptocurrency Wallets

Actually, the wallet is not some storage place as we are accustomed to in case with fiat money. Your wallet is a tool that allows you to read information about your transactions in the Blockchain. You might compare it with your email account credentials. They don’t mean anything but they provide you access to the contacts, business information, and similar. If you lose them, you lose access to the contacts. The same with the cryptocurrency wallet.

Your wallet selection will depend on the currency you are going to purchase. Note please that you can use a bitcoin wallet to send bitcoins to a different bitcoin wallet only. If you try to send Litecoin to a bitcoin wallet, you, most likely, will lose your crypto-funds, and nobody will ever be able to recover them.

It might be the case that you don’t want to limit yourself with one coin only. Then, it is reasonable to think about getting a multi-currency wallet.

 

Keys and a Cryptocurrency Wallet

Now, let`s check how a cryptocurrency wallet works. It has the following components:

A public key, of the crypto-wallet address:  you can give it to people who need to send coins to you.

A private key: this is your PIN, a number that provides you with access to your crypto-funds. it is a string or numbers and symbols generated based on special rules. Well, you don’t need to know the principle of how the private key is generated. Your main task is to keep it a secret. If somebody gets your key, they get access to your money. If you lose your key, you lose your money.

 

Hot vs Cold Wallets

Cryptocurrency wallets are divided into cold and hot. It all depends whether they are connected to the internet or not.

Hot wallets are connected to the web. From one side, they are very convenient. You can access your funds wherever you are if you have a device with internet access. From the other side, however, they are more vulnerable. A hacker can access them online by breaking into the safety system of your device or even by finding out what your private key is.

In some cases, the security leek of your hot wallet even doesn’t depend on you but on the service provider. However, guess what happens if your wallet is broken in and money stolen? Well, you are right if you think that you lose all your funds!

That’s why it is recommended to use hot wallets only for small sums. For example, they are perfect for money that you want to have by hand constantly. However, keeping all your savings in a hot wallet is not wise.

Cold wallets are not connected to the web, as you have already guessed. Anything where you can store your private key can serve as a cold wallet. You can even use a piece of paper for it, just make sure you don’t lose or throw it away.

Cold wallets are very robust and safe. They can be hacked only when you connect to the internet to get access to your funds. That’s why always make sure your device`s antivirus software is updated and running. Also, it is recommended to take usual precautionary measures like with data to access your online banking, for example.

Cold wallets are a great option to store bigger sums of cryptocurrency.

 

Where Are These Wallets Located?

There are many companies that provide various software aimed to store and protect your private keys. You select the wallet depending on many factors, including your personal preference, of course, and on the reasons why you are going to buy cryptocurrency.

 

Desktop wallets

Desktop wallet is a special software. You download it and install on your desktop. When installing, the software will request you to provide a row of phrases and words: remember them and keep them away from everybody. They can be used to restore the access to your crypto-funds when you need to reinstall the wallet, for example. Needless to mention that once you forget the phrases, restoring the access to your coins will become impossible.

The main cons of desktop wallets are their security level. They can be accessed only from your computer. Further, they usually provide top level functionality.

The main drawback is again the possibility to be hacked when you connect to the internet. So, keep your computer protected.

 

Mobile wallets

Mobile wallets are very common nowadays. It is not surprising because most people use mobile devices. Mobile wallets are also apps, like for a desktop, but their functionality is more limited because the resources of a smartphone are more limited than the resources of a computer. They are very convenient to pay in shops and to have your coins by hand in general.

However, they have a significant drawback: they are extremely vulnerable to hacker attacks because with a mobile phone, you are constantly online. Moreover, the protection of a mobile device is not so elaborate as the protection of a computer, for example.

 

Online cryptocurrency wallets

These are wallets stored in a cloud. So, you can make with them really fast transactions, they are often directly connected to cryptocurrency exchanges, and similar. But they are extremely vulnerable. Just the fact that your money is stored somewhere else, and even controlled not by you but by somebody else, tells a lot.

 

Hardware cryptocurrency wallets

Hardware wallets differ completely from all the previous options. These are offline devices, such as a USB for example. When you need to send crypto-coins, you connect your wallet to the web, make the needed transaction, and disconnect the wallet.

Even though some of them are even equipped with special LED screens to make the procedures simpler and faster, they cannot be compared with any of the previously described wallets when we speak about comfort or user-friendliness. Their functionality suffers, as well. And of course, if you lose it, your crypto-coins have gone forever.

However, they are the safest. They only are used to transfer the funds, the keys are offline. So, as you can imagine, hackers cannot steal anything. However, they are very difficult to get: they are sold out within seconds when they appear for sale.

 

Paper cryptocurrency wallets

These are the ancestors of hardware wallets, but they are used until now. On a piece of paper, you print your public and private keys, the last one can be in the form of a QR-code or just a string of symbols. After that, you can use your wallet to transfer funds. You connect any of your devices to the web, provide all the needed data to transfer some funds to your software wallet, and then, from the software wallet, you perform the needed operation.

These wallets are super safe. They are believed to be the safest wallets for keeping your crypto-coins, and for a reason: they are never connected to the internet. Moreover, they are very cheap.

However, paper wallets are good for those users only who know about the technology. You need to know how to create them and even how to use them. If you don’t understand much about it, it might be very challenging. Also, you shall store them very carefully: paper is a very fragile material.

 

Place Where You Buy Your Coins Is Crucial

You can purchase your coins from people on special services called P2P platforms. Usually, you need to register to access the service functionality. Further, you can start searching for the acceptable options. You will see a list of options available. Filter those that offer the needed cryptocurrency sum and accept your fiat currency as payment. The entire procedure is simple and fast. The exchange rates there are among the best online. However, these platforms are hacked frequently, moreover, they are a fraud frequently. So, you pay a price for the speed.

You might prefer cryptocurrency exchanges. There are plenty of them on the web. In case with an exchange, you should consider many factors that in the end will influence the final sum of the money you get. Those are fees, spreads, limitations, and similar.

So, before you opt for one or another exchange, read very well about them to select the most profitable option. Also, the best cryptocurrency exchanges offer great customer support, wonderful functionality, and are extremely user-friendly. Check also online if the exchange isn’t hacked or isn’t in the middle of the bankruptcy proceedings. All this information is available online. Only after having checked all these details, you can move on to the purchasing procedure.

Now, you know all the basics about what cryptocurrency to purchase, where to store it and where to buy your coins. However, this is just the basics of what you can do with your crypto-coins. You might just keep your coins in hope that their value will grow like it has happened with bitcoin. Or you might want to try trading with your funds in an attempt to earn more. Any option is available, and it is up to you only to use your assets wisely.

 

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