Cryptocurrency is a passion for youngsters. Each new cryptocurrency and Blockchain-based product are emerging in the market. People are eagerly investing in cryptos due to their ease of adoption and price volatility.
While seeing the market trends of cryptos, and blockchain-based products like DeFi, & NFT. You may be wondering, “Are cryptocurrencies safe? “, “How to acquire crypto?”.
Let us get clear all your doubts and chaos here,
Are cryptocurrencies safe?
Yes, they are safe and futuristic investments. Safety and security depend upon the way of securing cryptocurrencies. There are two vital factors involved in cryptocurrency. They are security and investment volatility.
One must be very keen on the security of cryptocurrency investments.
You must very careful in choosing the right cryptocurrency exchange for acquiring cryptocurrency. The exchange platform must be robust in handling user cryptocurrencies. Blockchain is used as the backbone of the cryptocurrency exchange to handle trading in a well-secured manner.
The cryptocurrency exchanges probably store their cryptocurrencies in cold storage. The exchange usually holds user cryptocurrencies on the cold exchange to ensure security as it is the bulk of digital assets. Cold storage is nothing but an offline wallet that is not connected to the internet and not prone to hack or theft.
In the early days of cryptocurrencies, most cryptocurrency exchanges have faced security breaches for their digital assets. Users can also store their digital assets on their privately owned wallets.
While creating an account on the cryptocurrency exchange, must check the security and safety precautions on the platform. The security features like two-factor authentication, login passwords, antiphishing code, and jail login must be enabled on your account properly.
Coming on to the factor on investments volatility. The richest cryptocurrency Bitcoin or some other new crypto coins/ tokens may have a huge difference in price value for the time being. The price is not controlled by any centralized authority and it is volatile. You must be careful while investing in the right cryptocurrency at right time.
Purpose of the Cryptocurrency Wallet
A cryptocurrency wallet is a safe method to store virtual currencies.
The cryptocurrency exchanges allocate separate crypto wallets for the users. If you are in an idea of larger investments, then you can have a private crypto wallet owned by you. Cryptocurrency is the place to store your cryptocurrency safely with the help of public and private keys.
There are multiple types of wallets available like a paper wallet, mobile wallet, desktop wallet, cold wallet, and Hot wallet, etc.
The below-mentioned wallets are widely used
- Cold wallet. This is usually a part of the hardware that is held offline, constructing it very tricky to hack. Cold wallets cost around 200$. This is a well-secured way to store virtual
- Hot wallet. Hot wallets are connected to the internet, so they are prone to theft/hacking. But this wallet is very flexible for handling instant trading for a few cryptocurrencies.
In the early phase of cryptocurrencies, the security feature is a crucial part of the cryptocurrency exchange to store bulky digital assets.
Even the world's largest cryptocurrency exchange, Binance has faced security breaches for their user digital currencies on their exchange platform.
Recently, cryptocurrency has become a more mainstream investment, cryptocurrency wallet is very important for it. In case of crypto theft no way to get back to it, so, cryptocurrency exchanges have tightened their security features and started storing the bulk of digital assets in cold wallets.
Some cryptocurrency exchanges allow the user to store their cryptocurrency privately on their cold wallets. Those cryptocurrency exchanges are Coinbase and Gemini have built-in wallets. They allow the user to withdraw cryptocurrency by paying a withdrawal fee for it.
In some exchanges allow the user to invest in cryptocurrencies and hold the user cryptocurrencies on platform wallets. They don't allow the user to move their cryptos to their private wallets. These exchanges safely store their user digital assets in the cold wallet and insure them. Those exchanges are Robinhood or SoFi Active.
What is Cryptocurrency trading?
Cryptocurrency trading is a platform that supports buying, selling, and trading. A trading platform is a place for the users to buy crypto, and sell them on the increased market values in a hassle-free way.
There is a huge number of cryptocurrency exchanges available.
Cryptocurrency tradings platforms like
Binance
Coinbase
Gemini
Kucoin
Kraken
FTX
LocalBitcoins
Paxful
and much more.
Each cryptocurrency exchange has its pros and cons. Users must be careful in choosing the right one for them.
Some have amazing security features and offer a broad scope of markers for beginner and advanced traders. For example in Gemini exchange a feature called “Gemini Earn” pays interest on cryptocurrencies, and “Gemini Pay” allows to pay Bitcoin at over 30,000 stores.
What are the sources of Revenue in Cryptocurrency Trading platforms?
Here are some revenue source
- Trading fees. Fees deviate relying on the exchange and type of transaction. You can see fee-free trading, but have to pay between 0.1% and 0.5% per trade. You will pay lower if you trade high volumes. Some exchanges provide a discount for trading their native coin on their platform.
- Deposit fees. Some exchanges may allow deposit fee-free on using your bank account. In case some may charge a 1.5% deposit fee while using your debit card. If you use a credit card have to pay 3.5% and the bank may charge an additional fee for a cash advance.
- Withdrawal fees. In some cryptocurrency exchanges don't allow the user to withdraw their cryptos to their private wallets. The cryptocurrency exchange charge a withdrawal fee depending upon the cryptocurrency being withdrawn.
Conclusion :
Cryptocurrency is becoming mainstream. The people started investing in cryptocurrency to draw maximum benefit in a shorter time frame. Cryptocurrency is exponentially growing beyond expectation by accompanying Blockchain technology.
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