Some Things to Know Before Going to Trade Cryptocurrencies
Do you have bitcoins or dollars, and you want to convert them into other crypto-currencies? I explain this to you.
Before continuing, you should know that all currencies other than bitcoin are called: altcoins (for Alternative Coins).
Bitcoin is the mother of cryptocurrencies. As a result, its use is widespread. Most of the time :
– we will first buy bitcoin – wait a few months – then exchange it for dollars
– we will use bitcoin to – then – exchange it for other crypto-currencies
– often, cryptocurrency trading sites can provide some anonymity if you send them bitcoin to trade. (otherwise you have to send an ID, make a bank transfer, etc.).
So, you will first need to have a “master” bitcoin/ethereum account.
Why ?
Because then it will be enough to send some bitcoin to the trading sites, which will only take 5 minutes.
Things to know before trading cryptocurrencies
Before investing a portion of your bitcoins in it, it may be useful to look at promising cryptocurrencies. The cheapest currencies are not always the best. For a long-term investment, it is best to look at:
– the technological innovation of the altcoin in question (this is the case of Ripple and Ethereum)
– community size
– its age
And if you just want to have a portfolio of several altcoins by betting on an overall rise: bet on the best crypto-currencies based on their capitalization. (= total value of the financial mass).
How to trade cryptocurrency
Here are 2 ways to do it. One or the other will suit your philosophy.
Method 1 is the simplest: all altcoins are on the same site.
Method 2 allows you to have total control of your wallets.
What I do
I use method 1 for simplicity. I completely trust Coinbase to manage my bitcoins and Ethereums, and SimpleSwap to exchange my cryptocurrencies. If you’re curious about SimpleSwap, just click here. I also have an independent wallet (from method 2) to keep dogecoins. My master account manages my bitcoins and Ethereum. And to store independently – and for the long term – my dogecoins, I created a free account at dogechain.info…but hey, many trading sites also keep dogecoins, no problem.
To use these sites you must first have
– An address already containing the coins you want to send (unless it’s euros / dollars, etc.)
– An existing address in the corners you wish to receive
So you must have already created 2 addresses… sucks huh? …
I admit that in some cases it can be practical: need to change a currency quickly, only want 3 or 4 crypto-currencies in total, want to buy a currency to receive it directly on your private wallet (the one you use with a software on your pc), send cryptocoins to a friend, etc. As a result, this way of buying cryptocurrency can be complementary to others.
The final words
– I repeat: Have a primary bitcoin (or ethereum) account
– Transfer part – and part only – to a cryptocurrency exchange
– If the sums – or your profits – become large, transfer this to a dedicated long-term secure wallet
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