Understanding the different types of cryptocurrency
Here’s a quick rundown of everything you need to know.
The pandemic has made its corrections in all spheres of human life, and the economy is not an exception. The traditional investment options — fiat currencies and metals — were considered risky.
At that time, there was practically no asset to invest safely. As a result, investors turned their attention to the less popular asset — cryptocurrency. The growth of interest in cryptocurrency is due to the following factors:
- Great potential for growth, which makes it possible to rapidly and significantly increase their investments;
- Declining confidence in the fiat currency;
- The “cryptocurrency boom” attracted the attention of new investors in early 2021.
Coin and Token: What’s the Difference?
There are two major crypto assets available today — coins and tokens. Cryptocurrencies like Bitcoin, which have their blockchain, are called coins. The coin has measurable value and can be used as a settlement currency. Among them are Ethereum, Litecoin, XRP, EOS, etc.
A token like Celsius crypto is a digital asset created on third-party platforms to develop the network and perform purchase and sale operations. The most famous tokens are Tether and USD Coin, developed by the Ethereum platform.
You should invest in the currency that meets your requests. Of course, this should be crypto, in the prospects of which you have no doubt. First of all, coins or tokens should be simple and straightforward, and the mechanisms for exchanging and withdrawing funds should not take much time.
This means that the project should be promising and use unique technologies and innovative solutions. A project that gives good earning opportunities shortly.
What to Do to Enter the Crypto Exchange
First, understand the instruments found on any exchange. They include a price chart, order creation form, order book, trading volumes, and transaction history. To successfully buy and trade cryptocurrency, you need to choose a platform that meets your desires and needs.
In addition, you have to choose a cryptocurrency wallet. Each e-currency has its dedicated wallet. For example, the Exodus and Coinbase wallets are for the most common coin, Bitcoin. MyEtherWallet is for the equally famous Ethereum.
The selling process is the same on all exchanges:
- Registration. The procedure is standard — you can register using e-mail or by phone number, create a password and an account;
- Verification. Most exchanges require full verification from users, but some choose to verify their identity or trade anonymously. It is crucial to understand that verified users have better security guarantees and extended trading limits;
- Trade. All actions with assets take place using the trading terminal. The algorithm is the same on any exchange: choosing a trading pair and filling out an order for buying/selling following the selected order type.
However, before choosing a particular cryptocurrency, wallet, and exchange, it is crucial to understand your needs. Do you need crypto to trade quickly, or are you looking for a long-term perspective? The answer will determine your choice.