Even if you have been living under a rock for the past decade, you will still have heard about cryptocurrency, thanks to its prevalence in the media and somewhat mainstream adoption. However, while you may have heard about it and want to trade some, you can be excused for not knowing where to begin. Trading can seem a daunting prospect for those who don’t live in this world. Luckily, it isn’t quite as challenging as you might imagine, and this post will help you get started.

Defining Cryptocurrency

Before getting into the nitty-gritty of trading, you need to have a cursory knowledge of this phenomenon. Cryptocurrency is a digital currency whose purpose is to serve as an exchange system. They are also decentralized, meaning that you can trade and perform transactions without the need for a middleman, making them faster, cheaper, more secure, and more transparent than other forms of currency. Cryptocurrencies include Bitcoin, Ethereum, Litecoin, and Monero, among thousands of others. The first cryptocurrency (Bitcoin) was created in 2009 by a still unknown creator, going under the alias Satoshi Nakamoto. Since Bitcoins’ inception, cryptocurrencies have taken the world by storm, and you can now find trading platforms available in Singapore, the USA, and most other places. Even with countrywide bans in places like China and the threat of regulation from others like the USA and Europe, it remains a robust system based on sound technology. But what is this technology?

What Is The Blockchain?

Blockchains are distributed ledgers that maintain a continuous listing of linked and encrypted data records. The blocks are created by miners who use computing processing power to solve complex cryptographic puzzles. These blocks contain the data records and are added to the blockchain in a particular order. A block typically includes a set of transactions, such as the transferal or exchange of funds between two parties or information about an event like an election or license renewal. A block may also contain information about other blocks in the chain, thereby explaining the term “blockchain.” While many of the most significant tokens still rely on raw processing power to solve and create more tokens (proof of work), many newer options have moved onto newer technology called proof of stake.

How To Begin Trading?

Now that you have a general idea of what cryptocurrency is and its tech, you probably wonder how to start trading and hopefully make some money! If you are entirely new to this world, you should carry on reading; if you already have some knowledge, you can skip to the second point.

Research The Industry

Many people are investing in cryptocurrencies without doing their research. It is not prudent to do this since the market is volatile, and you can lose your investments quickly. Before investing in any cryptocurrency, you should do your research to avoid making mistakes. You should try to figure out:

• What the cryptocurrency does
• How it works
• Who created it
• What other investors think about it
• If the company has a long-term roadmap for growth

You can discover most of this information by reading the currency’s whitepaper and joining relevant social media groups. It would also help determine how much money the company has raised and how many employees they have before investing in any cryptocurrencies. Once you have ascertained which tokens look the most appealing, you can move on to the next step.

Choose An Exchange And Create An Account

It’s essential to find an exchange that will work for you, so it’s best to research them before creating an account. There are many different exchanges, and each one has a different set of pros and cons. Some of the leading players include:

• Coinbase
• Kraken 
• Gemini
• Binance

While these exchanges share the lion’s share of accounts, numerous other options are available. Therefore, you need to check around to see which is the best fit for the trading you like to do. In any case, most exchanges will require you to provide information about yourself to ensure that you are who you say you are. This is a part of the Know Your Client (KYC) regulations. In most cases, you will need to provide an image of yourself holding your passport, among other things depending on the exchange. Fortunately, this isn’t as challenging as it sounds, and you should get verified in a few days at the most.

Fund Your Account

The next step is to fund your account using whichever fiat currency you use and is accepted. Before you do this, you should remember only to spend what you can afford to lose and avoid using credit to trade. If the value of your crypto assets falls, you could pay more in interest than it’s worth.

Trade!

Now comes the fun part. Once you have money in your account, you can head to the trading page and trade your fiat cash for the crypto/s you chose earlier. It is often best to diversify, and in this case, that means blockchains, technologies, real-world applications, and so on. Some tokens will take longer to process than others, so don’t be alarmed if you have initiated a trade, and it takes some time. Just head over to your exchange’s documentation and see the processing times for each token.

Move Your Assets Into A Wallet

Just like with traditional currencies, you need to protect your digital assets from theft, fraud, and hacking. There are many different types of wallets that you can use to store your cryptocurrency. A wallet is a place where you will keep your assets and put them into use. The most common wallets are desktop, mobile, and hardware. A hardware wallet is the most secure option because it’s not connected to the internet, which means that it’s not vulnerable to cyberattacks, and usually comes in the form of a USB stick. Mobile wallets are convenient, but they can be hacked if they have an internet connection or don’t have a PIN code.

Before you begin your crypto journey, it might be best to familiarize yourself with the basics before you start trading. If you don’t understand the differences between cryptocurrencies, how they work, and which currencies are suitable for you, you might lose a lot of money on coins that you don’t understand.