Inexperienced users can make a lot of mistakes when starting to work with cryptocurrency. For instance, choosing an exchange where it is risky to store funds, or specifying the wrong address when transferring digital assets. Each of these and many other oversights can lead to partial or complete loss of invested funds. To avoid these mistakes, it is better to study the instructions: where to start working with digital money, how to buy cryptocurrency, and where to store it.

1. Decide on a Strategy

First of all, it is crucial for a user starting to work with cryptocurrency to decide on their strategy. It depends on where the trader will store their assets. If they prefer to buy coins and forget about them for a long time, it is safer to keep them in a cold wallet. If the user wants to try exchanging cryptocurrency or trading digital assets, it is better to choose an exchange.

Both methods have their advantages and disadvantages. It is more convenient to keep assets on the exchange: they can be sold at any time, exchanged for other coins, or withdrawn into fiat money. This is especially true during sharp market fluctuations. If a rapid decline in the price of bitcoin begins, the coins stored on the exchange can be immediately exchanged for the US dollars or other currencies.

A cold wallet is less convenient in this matter. Coins will have to be sent to the exchange first, to be sold later. Accordingly, while the transfer is going on, there is a risk of losing on the depreciation. Another problem with cold wallets is the lack of multicurrency. For instance, it is not possible to store Ethereum on a Bitcoin wallet. Accordingly, the more a novice investor wants to buy different coins, the more wallets will be required to store them.

The solution could be hybrid wallets that work, for instance, as applications on a smartphone. This is a safer way to store funds than on an exchange, and, at the same time, most of these wallets allow you to make purchase and sale transactions with popular cryptocurrencies.

2. Create a Crypto Wallet and Open an Exchange Account

After choosing a strategy, you should create a wallet for storing cryptocurrency: either download the application to your computer or smartphone or create an account on the exchange. Both options can be selected. Experienced traders keep on the trading platforms part of the assets that are needed for operations. The remaining funds are kept in over-the-counter wallets.

When choosing an exchange, it is safer to pay attention to large, popular sites. They have more means to provide protection against hacker attacks. There are also lower risks that well-known exchanges will turn out to be fraudulent projects. 

When registering on the exchange, and especially before transferring funds to it, it is critical to check the terms of the user agreement. Some exchanges may not provide services to traders from your country. The site, if it finds out that you have violated this rule, may block your account. Another crucial condition concerns verification. The exchange may require you to verify your identity to open an account or withdraw funds from it.

When registering, you can use the referral link trick. Most marketplaces reward their users for inviting new customers. If a new user signs up using your referral link, you will receive a small percentage of the commissions they pay for transactions as a reward. The trick is to create a new account using your own referral link and receive a small income from this from your own operations.

3. Buy Bitcoin

To buy Bitcoin (BTC), there are two main ways. The first is directly on the exchange if you have created an account on it. Many large trading platforms now provide an opportunity to replenish the balance directly from the card or through the payment system.

The second way is through exchangers, like Changelly. These are special services for buying and selling cryptocurrency. They allow you to purchase popular coins and immediately send them to an exchange or wallet, or vice versa, exchange digital money for traditional ones and withdraw them to a bank card or electronic wallet.

Exchangers work as follows:

You choose the cryptocurrency you want to buy and the payment method.Specify the amount for which you want to purchase digital assets.Specify the address of the wallet where the cryptocurrency will go.Confirm the application for the purchase and transfer of funds. It is crucial to transfer the amount strictly specified in the application. Otherwise, the service will not recognize the transaction, and the funds will not come.On many services, after payment, you need to click the “I paid” button. If this is not done, the service will receive the money, but will not transfer the cryptocurrency to you.

Exchangers charge a fee for their services. Its size is usually 2-4%, although it can often be higher. To choose the most profitable option, you can use services for monitoring exchangers. They allow you to sort them at the most favorable rate.

To Sum up

In this cryptocurrency overview, we have described the three simplest strategies for working with digital money. They are suitable for novice users and will help reduce the risk of losing funds due to emotions and in pursuit of quick profits.

Inexperienced users can make a lot of mistakes when starting to work with cryptocurrency. For instance, choosing an exchange where it is risky to store funds, or specifying the wrong address when transferring digital assets. Each of these and many other oversights can lead to partial or complete loss of invested funds. To avoid these mistakes, it is better to study the instructions: where to start working with digital money, how to buy cryptocurrency, and where to store it.