This short guide goes straight to the point and condenses the information to get started in the world of crypto-currencies without being surprised by a lack of knowledge. Many other tips are provided on the site if you want to go further on the subject.
You are more and more interested in crypto-currencies and you have decided to take the plunge by buying your first digital currencies. That is a good thing. However, as with any new initiative, there are mistakes that are best avoided. And in the case of crypto-currencies, it is better to be warned from the start because errors can be very expensive. 1st error: Exchanges are not banks
You now know which cryptos you want to acquire. For this, it will be necessary to create a customer account on what is called an exchange. An exchange allows you to buy the desired digital currencies by acting as an intermediary between you and the market.
Here are 4 exchanges tested and approved by the editorial staff of cryptos.net:
- CEX.io: whose detailed presentation you can read here
- Exmo: whose detailed presentation you can read here
- HitBTC: whose detailed presentation you can read here
- Binance: whose detailed presentation you can read here
Once the purchase is made, many investors think that now everything is in order and that they can safely leave their virtual currencies on the exchange for weeks, months, years…
First of all, it must be understood that an exchange has on its own account all the crypto-currencies of the customers. On your customer account, you see what you are entitled to, but it is not you who technically have access to your digital currencies.
This means that in the event of a failure of the exchange, you have no way to recover your funds.
When we talk about failure, we must keep in mind that an exchange remains a commercial enterprise and can like any company be subject to problems of all kinds: theft, mismanagement, etc … and end up bankrupt in the worst case.
The list is long of exchanges recognized as leaders that have accumulated problems and always to the detriment of customers who had left their cryptos there. Ex: Mtgox, Btc-e, cryptsy …
Thus, prudence is to use the exchange as a buffer zone to make its purchase operations. Once you have transformed your euros into cryptocurrency, it is necessary to secure the crypto-currencies on a wallet of which only you have access in order to no longer be dependent on the vagaries of the exchange. This leads us directly to the 2nd big mistake. 2nd mistake: Postpone the implementation of a wallet
The best way to keep your cryptocurrency is a digital wallet otherwise called in English a Wallet. Unlike an exchange, a wallet gives you all the powers to access your funds. You are the only one who has the only access to your digital currencies.
There are different types of wallet, some are usable on your windows or mac computer, others are usable on your smartphone.
In terms of security, hot wallets (i.e. on a computer or smartphone connected to the internet) are a good alternative but remain potentially susceptible to viruses and other possible attacks of your equipment (computer, smartphone).
The best security for storing your funds is available with so-called cold wallets or hardware wallets (It looks like a physical USB stick). These allow you to make transactions safely even if your computer is under the influence of a virus. They are to date the best way to keep cryptocurrencies as an investment. Wallets are compatible with the following currencies:
Two cold wallets have become market leaders: the Ledger Nano S and the Trezor. Serious companies are behind these products and many updates continue to improve their product on a daily basis. It takes about 70 € to acquire this storage solution. Mistake 3: Don’t put all your eggs in one basket
It is necessary to vary as much as possible its investments in crypto-currencies.
This is a classic good practice when investing but it makes even more sense when buying cryptocurrencies.
If cryptocurrencies are a revolution, several digital currencies will become leaders… and you will avoid having inadvertently invested everything on the only blockchain that will have no future.
Although some cryptocurrencies have a greater notoriety than others, we are still today at the beginning of what will be a world that will turn with virtual currencies as currencies of exchange.
Very clever who can certify that a single currency will emerge and dethrone all the others or that several currencies with different technologies will be used for specific needs.
Many things are likely to evolve in either direction. It is necessary for the prospective acquirer of crypto-currencies to diversify his purchases by taking into account criteria such as: The notoriety of the currencies, the technologies used, the utility, the security, the governance.
On cryptos.net, we follow the news in French of everything that is happening in this new revolution. We are closely following the very promising 3rd generation blockchains that are stealing the show from the oldest.
We will continue to inform you as much as possible about the twists and turns of this new economy. Do not hesitate to react to an article, video if you want to know more. We try to answer all the questions.
Cryptos, we talk about it Franco!
Disclaimer: as this type of investment is highly speculative, the various contents published here do not constitute an incentive to invest, nor a guarantee of success. So be careful. And if you decide to get started, only do it with amounts you can afford to lose. Follow us on social networks and don’t miss any of our news!