Ever since Bitcoin was launched in 2009, cryptocurrency has evolved with the rise of blockchains, NFTs and more. What started out as a project with potential has become the foundation of web3 today. There is no denying that adoption of crypto is, and will continue, to happen.
It’s also no secret that crypto is a volatile market, susceptible to market trends, news, and arbitrary disparities. Cryptocurrency help covers these latest crypto events in detail while providing useful guides for crypto enthusiasts. The website is a great resource for companies and individuals alike who are beginning to learn about crypto or are starting to invest in it. After all, every event in the crypto scene can trigger major price fluctuations of your favorite coins – hence, staying up to date with the market is crucial.
However, it’s important to address one question, “where can you store cryptocurrencies and NFTs securely?” Our comprehensive guide will cover everything you need to know as a beginner. So, let’s dive right into it.
How to purchase crypto and NFTs
The most reliable way to purchase crypto online is through a centralized exchange (CEX) that not only serves as a market exchange but also as an online wallet for your digital assets. After doing some identity verification, you will be able to deposit money and purchase a variety of cryptocurrencies available on the exchange, yet keep in mind that new accounts may have some restrictions initially, depending on the distinct requirements of a given exchange. Nevertheless, using an exchange is more reliable than peer-to-peer methods.
NFTs, on the other hand, are primarily bought and sold on NFT-centric marketplaces (like Openswap or Blur), which involve multiple creator royalty and marketplace fees. With that being said, there are many nifty features, such as seeing a project’s sales activity, floor price, and current bids.
In order to buy an NFT before it is traded on a secondary market, you need to ‘mint’ it, which means paying a certain amount to obtain an NFT on the project’s launch date. As a beginner investor, remember to always do due diligence before purchasing any NFT or crypto. Do not trust artificial hype, superficial celebrity endorsements, baseless claims, and boosted numbers on Discord servers – these are the most common red flags, indicating that an NFT project is a scam.
Withdrawing Cryptocurrencies
Given that, you may wonder, “What about converting crypto back to cash?” This is done through a centralized exchange, which will allow you to withdraw funds from some banks in your region.
You can peruse the most crypto-friendly banks in your area to avoid any hassles, however, before purchasing any cryptocurrency, you should always check your country’s regulations regarding crypto and NFTs. Crypto regulations tend to vary from region to region, therefore, gaining awareness around this is crucial.
In the crypto world, fiat-equivalent tokens, also known as ‘stablecoins’ (such as Tether, USDC), have entered the market – as the name suggests, these are coins that are pegged to some form of currency at a 1:1 ratio. You can easily purchase stablecoins by converting your fiat into their equivalent amount, enabling you to easily trade back to tokens and not have to withdraw to your bank.
One way to swap your tokens is via decentralized exchanges (such as Uniswap), which do not require any identity verification. However, it is not possible to withdraw to a bank with decentralized exchanges. Just like any other transaction, swapping via a decentralized exchange requires you to pay gas fees; these are computing costs that vary depending on the network you are using.
Where to store crypto and NFTs
Crypto and NFTs are both stored on ‘wallets’. You can always keep your cryptocurrency tokens on an exchange, but it is recommended to transfer your crypto to a wallet so you have custody of your own funds. There are two types of wallets, namely hot wallets and cold wallets.
Whenever you create a wallet, you will be given a backup phrase that you should always remember. Each wallet also has its own private key (a string of letters and numbers), acting as a second form of backup. As a newbie cryptocurrency investor, you should always remember to never share your private key or backup phrase with anyone.
Hot wallets are extremely convenient since they are applications or browser extensions you can install. Setting up a hot wallet is simple! With MetaMask (arguably the most popular hot wallet), you need to just create a wallet, set a password and write down your backup phrase. From there, you can easily view your holdings and transfer them in a few simple clicks.
Cold wallets are typically USB sticks and have an extra layer of security to them. While hot wallets are more convenient and accessible on any device with the internet, cold wallets are more recommended for security. It isn’t uncommon to own both a hot wallet and a cold wallet since they can serve different functions.
What to consider when owning crypto
- Transparency: Crypto is known for its transparency due to the nature of public blockchains, where you can view every wallet transaction history, holdings, and more. The only exception is dealing with privacy coins, which hide all ongoing transactions and wallet history.
- Common scams: There are also many scams that try to imitate wallet websites or popular figures, tricking users into clicking phishing links that drain their funds. Always pay close attention to the links and look out for typos. Also, if a scheme sounds ‘too good to be true’, it usually is.
- Safety: It is a generally good idea not to overshare online, especially with your crypto holdings. If you own a cold wallet, make sure to keep that in a safe location. If you are using a hot wallet, make sure that your device requires a password before turning it on, serving as an additional security measure.
