You can trade electronic money without leaving your home: transactions are concluded on online platforms. But this type of investment is considered risky because of the danger of losing all investments at once.
What is a crypto exchange?
In short, this is an electronic platform where they trade in cryptocurrency – electronic money. As in traditional currency exchanges, the participants’ task is to make a profit, that is, buy at a lower price and sell at a higher price.
Exchanges can only deal with transactions with different types of cryptocurrencies (Bitcoin, Tether, Ethereum, Ripple, and others). Or exchange electronic money for world currencies (dollars, euros, and so on). And also combine both directions.
How to choose an electronic platform?
Making a profit does not depend on the site, but on your actions. But the safety of money depends on the exchange, which is important in such a super-risky type of activity.
First of all, pay attention to the size of the electronic platform. The larger the exchange, the more reliable it is. This is especially important for novice traders – small exchanges are not suitable for them.
Focus on jurisdiction. Regulated cryptocurrency exchanges are registered in certain countries and operate under their laws. It is clear that developed states with stable legislation and good work of the courts in this regard are preferable to developing ones.
Do not be lazy to read reviews about the exchange: some of them may turn out to be paid advertising, but you can catch the general trend. Feedback can be found on:
What is required to register on the exchange?
The registration procedure may differ from site to site and change over time. The main thing is that you must provide personal data and confirm it. Somewhere you will be asked to send an e-mail address, phone number and scanned passport. To work on another exchange, you also need to take a photo with a passport in your hands. Some countries’ exchanges (where required by local law) need to confirm the source of funds and their purity. It is a bonus to find lowest fee crypto exchange.
What to pay special attention to?
When studying the sites of exchanges, pay attention:
- at the price of the cryptocurrency you need on a specific site;
- the size of commissions and their number. If the exchange charges a considerable fee for each operation, it will be very difficult for a novice trader to be in the black. Calculate in advance whether the operation will be profitable after deducting the commission;
- withdrawal limits. If you are allowed to withdraw only $ 100 per day, this is inconvenient. In the initial stages, when the profit is still small, this may seem insignificant.
How to protect cryptocurrency from theft?
One of the potential dangers when working on the exchange is that hackers can hack an electronic wallet and steal cryptocurrency. A “cold” wallet – that is, an autonomous secure storage – will help protect you. This can be a private key for accessing a wallet or, in general, a flash drive (another device) that is connected to a computer if necessary. True, the connection and disconnection scheme can be inconvenient during trading, when the reaction speed is very important. Therefore, it is still important to choose a large reputable exchange with a better developed security system.
Is it possible to somehow understand that the transactions are not fake?
Sometimes the information about transactions that crypto exchanges publish is in doubt. But there are no 100% reliable ways to determine the reality of transactions. The size of the site can be a guarantee and a guarantee of honesty – large exchanges do not need fakes, there are enough real transactions.