The cryptocurrency has been around for over a decade with its ledger start in 2009. It is a digital currency that operates outside of the regulations and control faced by commercial bank money. People can easily send cash over the internet via this currency. For cryptocurrency to be free of control is a major attraction that has seen interest grow. Many buy cryptocurrencies as their value has drastically increased since their inception and continues to do so. However, not all platforms that sell cryptocurrency are safe. If you are ready to buy cryptocurrency, it is best to do so safely. Here is a guideline on how to safely secure your cryptocurrency investment.
Cryptocurrencies are generally volatile and fluctuate from time to time. Considering that it is a high-risk investment, one should understand the cryptocurrency and strategy to build on. Assess the profitability in the long term of the currency. There is yet to be much security to safeguard the investment as with buying stocks or investment banking. To mitigate against this, you require a safe platform to purchase the coins.
Selecting a Cryptocurrencies Exchange
If one wants to buy cryptocurrencies, they can explore various ways. These include: –
- An exchange
- Bitcoin ATM
- peer to peer network
It involves swapping dollars for the coins. For one to narrow down to a specific exchange, there are several factors to consider. The security of the exchange platform is critical. It involves the security of data and funds for efficient exchange. Most of the platforms have a centralized storage of funds. It means that the platform relies on its own security measures for safety. The history of the exchange platform indicates its security. The hacking history would show how exposed the platform is. Some crypto exchange platforms have a certain percentage of their assets stored offline to mitigate hacks. In addition, some platforms have taken insurance against fraud and theft to secure cryptocurrencies. To avoid the risks of buying online, one may buy bitcoin at a Bitcoin ATM. However, just like all other ATMs, one should take the necessary measures when visiting the cryptocurrency ATM. Furthermore, a safe platform for investment should have nominal fees. High trading fees result in fewer rewards on the amount stored. A competitive trading fee is essential to sustain the assets safely.
A safe platform should at least have the following features: –
- Cold storage wallets
- SSL Site Security Certificate
- Two factor authentication
- Ease of transfer between the exchange platform and the hardware wallet
- Verification for withdrawals
Option of hot wallet and cold wallet for storage
One requires having their own crypto wallet and not storing coins on the exchange platform. As highlighted earlier, an exchange platform is more exposed to hackers, and you could lose your funds. In addition, you do not hold the keys. You require having control over the keys. That is why wallets are essential. There are hot wallets and cold wallets. Hot wallets are maintained as they are connected to the internet for buying and selling. On the other hand, a cold wallet is a device that is offline hence more secure. It is most beneficial for large sums of money. One should seek exchange platforms that ease transfer to cold wallets.
Once you have decided on the crypto exchange platform, you need to fund the account before you buy cryptocurrencies. There are several ways of doing so depending on the exchange platform.
These include: –
- Bank transfer
- Wire transfers
- Cryptocurrency wallet
- Debit or Credit Card
It is important to note that the exchange platforms charge transaction fees differently for each option. You can also buy bitcoin with debit card directly if you prefer not to fund your account for the purchase. It is advisable not to deposit funds or buy cryptocurrency with credit cards as you incur a higher fee. Transaction fees reduce the amount available for investment hence it is advisable to minimize them.
Buying the cryptocurrency
After depositing money into your account, you can then buy bitcoin. This is done by the tap of a button or entering the BTC symbol. Input the amount that you are willing to invest, and you receive a portion of the coin depending on its current price. It’s a volatile cryptocurrency that requires in-depth research when investing.