The features of Cryptocurrency as a very specific asset
Crypto currencies are traded on special cryptographic exchanges. The market entry price is not high. However, attention should be paid to the development of the cryptovoltaic infrastructure.
Cryptov currencies are a very specific asset. All of the above can be conventionally referred to as classical trading and investment instruments. However, cryptov currencies differ from them in three strongly pronounced features:
- The highest volatility;
- Relative unpredictability of the coin price;
- Huge importance of one asset - bitcoin.
The legal status of cryptov currencies is not fully defined, so many do not consider cryptov currencies to be a full-fledged asset of the financial market (the truth about cryptov currencies). Nevertheless, derivatives and indices of the cryptovite are present even on some major stock exchanges around the world. But most importantly, cryptov currencies have become a popular asset for trading.
It is not a bad idea to understand what a block man is, what are the ways of emission of coins, for what purposes they are used. But in the beginning it is important to understand a few basic things.
Cryptov currencies and fiat
Crypt currency is a digital asset that is valued in fiat currencies. Of course, cryptov currencies may not be valued by the fiat, and the turnover of cryptov currencies may be closed in some system, without exchange for real money. But for trading purposes, they will have to be exchanged - put into fiat (rating of exchangers). Thus, cryptov currencies represent in trading a way to earn fiat money (how to earn on cryptov currency). You can exchange or output a crypt on the crypt exchange itself, if it provides such an opportunity or through an exchanger. Almost everywhere the exchange or output of a cryptovite into a fiat will be accompanied by commissions.
Types of crypto wallets
Cryptovalues are stored in special wallets that are placed on the Internet, on a computer or on removable media. In terms of trading wallets can be cold and hot. A hot wallet is an Internet storage facility, for example, like this: https://www.blockchain.com/ru/wallet. Also a trader's account on a crypt exchange is a hot wallet. The point is that from such a wallet you can quickly withdraw coins to trading on the exchange almost instantly. From a separate wallet you can quickly transfer money to the account of the crypt exchange. This is the absolute advantage of a crypt currency wallet. Minuses - the downside of the benefits: when there is no internet, cryptovalyut not available. In addition, the system of protection of Internet wallets is not ideal, because part of the private information is known not only to the trader-owner.
When choosing a hot wallet (or exchange, on which the account will be), you should pay attention to whether it supports in the country where the trader works, how much liquidity and what cryptovalues it can keep. When working with a hot wallet, it is advisable not to place all of the trader's "cryptovallets" in it, but to credit as much as necessary to participate in a trading session. And the main one should be a cold wallet. A cold wallet is a computer program that is placed on the trader's computer or on a removable media - flash drive. The main task of a cold wallet is safe storage of cryptovalues. In terms of security, such wallets are almost impregnable (although there have been precedents), but there are a number of drawbacks, or rather, nuances, which should be paid attention not to be left without money:
Do not forget the password, cid phrases and other critical information about the wallet, so to restore the wallet with money after losing this information is sometimes impossible;
Accordingly, you must not forget, lose, or break your computer or flash card on which the file with your wallet is placed;
You need to copy the wallet file into a separate folder in case of technical problems with the main file. The copy of a purse contains the same information as the main wallet, money does not disappear anywhere, as in fact it's not the real coins of the owner, and the record in the siege does not disappear anywhere;
Transfer of money from a cold wallet to an exchange account for trading takes time (a transaction requires a certain amount of confirmation, which never happens instantly). Therefore, in order to trade in cryptov currencies, part of the coins must have in the account of the crypt exchange.