Cryptocurrency has always been a hot topic of discussion. The way it functions to the kind of returns the investors are making by virtue of it – everything has been attention-grabbing for everyone around. However, the technology that forms the foundation of the cryptocurrency market is different from online banking, payment services, and other financial products as well. Now, this is what makes all the difference – the worth of the cryptocurrencies is not backed by any centralized authority. This is one of the prime reasons why the manner in which investors acquire, hold, and sell cryptocurrency is different. Here, the buyer of the cryptocurrencies enjoys full control of the digital assets because ownership is conferred by the private keys of that particular cryptocurrency.
With a lot of countries giving a nod to cryptocurrencies as a medium of currency exchange, wallets and exchanges across the globe have adapted to this in no time. They are paired with private and public keys — long strings of numbers and letters, or QR codes — thereby enabling the cryptocurrency users to send and receive funds. It is the private key that allows the cryptocurrency to be unlocked and sent. On the other hand, public keys enable the cryptocurrency holders to receive cryptocurrency from other senders.
There are two ways in which one can have control over their digital assets – one, via self-custodial wallets and the other via centralized exchanges. Self-custodial wallets allow crypto enthusiasts to maintain sole control over their digital assets. On the other hand, the ease and simplicity of centralized exchanges as it acts as a middleman between investors and crypto-assets attracts many. Which out of the two should one prefer? Well, that is totally up to you. Both these ways are equally legit. However, getting facts straight – most of the investors prefer centralized exchanges as it doesn’t require the investor to have direct contact with the crypto assets.
There are quite a good number of fintech applications and brokerages including PayPal, Robinhood, and Square’s Cash App that offer to buy and sell virtual tokens for those investors who only want to dabble in cryptocurrency.
As far as tracking is concerned, there is absolutely nothing to worry about. These exchanges as well as fintech apps also provide the investors with a way to track their crypto purchases and investment performance.
This cryptocurrency market is not a cakewalk for first-time investors. Sound knowledge about how the market functions are critical. What needs to be kept in mind is that the investors need to research whether that platform is sanctioned by regulators in their jurisdiction or not before choosing an exchange. Taking everything into the account, right from the exchange providing access to certain cryptocurrencies to offering them trading features – each and every aspect should be given utmost importance. Entering into this magical world of cryptocurrencies with a view that you will always be on the bullish side is something that isn’t advised. One should understand that the cryptocurrency market is volatile and that the gains can be huge, but so can the potential losses. Thus, before investing, one question that investors should ask themselves is how much money they are comfortable with losing.
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