Your Options to Buy and Store Cryptocurrency
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With so many options available, you may wonder where to invest in cryptocurrency. Generally, two primary platforms offer a range of digital currencies and other handy trading features. These include cryptocurrency exchanges and brokerage services.
Cryptocurrency exchanges facilitate trading and investing activities for users. You can buy and sell a collection of different virtual currencies through one or two of these platforms. Thanks to the increasing number of traders and investors, cryptocurrency exchanges are now available in easy-to-use apps.
On the other hand, brokerage services or companies assist with the sale and purchase of investments. They deal in bonds, mutual funds, and cryptocurrencies. Many best brokerage companies also facilitate cryptocurrency trading via their desktop-based and app-based platforms.
While both the exchanges and brokerage services facilitate cryptocurrency trading, they have an underlying difference. Cryptocurrency exchanges offer their services for digital currencies only, whereas brokerage companies offer other investments as well.
As mentioned earlier, a cryptocurrency exchange helps with digital currency transactions. You can buy and sell numerous cryptocurrencies and may do many other things. These include exchanging a cryptocurrency with another type at a prevailing exchange rate and using a connected debit card to spend digital currencies.
Many reputable cryptocurrency exchanges allow you to access learning material about various cryptocurrencies. Some crypto exchanges enable you to replace crypto coins with fiat currency, such as US Dollars. Make sure to look for the cryptocurrency exchange that includes an app with an easy-to-use interface and handy features for trading cryptocurrency on the go.
Cryptocurrency Exchanges and Brokerage Services
As the word suggests, a brokerage refers to a mediator between two people or parties and assist them for financial transaction. A real estate broker, for example, provides the necessary assistance and facilitates transactions between the buyers and sellers of properties. Cryptocurrency exchanges may serve as brokers if considered technically, although they are not the same as brokerage services.
Brokerage services offer other investments like bonds and stocks besides cryptocurrency, and a crypto exchange allows you to buy and sell digital currency only.
What is a Cryptocurrency Wallet?
By definition, a cryptocurrency wallet is a safe place to keep your digital currency. Usually, you need one digital wallet to store large amounts of cryptocurrency and spend them effortlessly. You get public and private keys that serve as your bank account number and PIN code and protect your digital assets. You can also store your encrypted keys in the wallet to make sure they are safe.
Digital wallets come in two different types, such as cold wallets and hot wallets.
1. Cold Wallet
Also known as offline wallets, a cold wallet refers to a piece of hardware or a device that stores your digital currency offline. Cold Wallets are the safest ones to store cryptocurrency as they make it extraordinarily difficult for hackers to hack. Such types of wallets are available for a price between $50 and $150.
2. Hot Wallet
Hot wallets are online wallets and stay connected to the internet all the time. Therefore, they are not as secure as hot wallets, though they offer maximum convenience to store a small number of digital assets you may want to use.
Digital wallets have been essential to store your crypto coins safely, especially since digital currency has become more mainstream. It is safer to leave your digital assets with the crypto exchange or broker from where you purchased them. Many reputable cryptocurrency exchanges and brokers offer insurance for the digital assets they keep on their platforms. However, financial experts emphasize using cold storage to keep your cryptocurrency as it will keep your assets offline, minimizing hacking chances to the least.
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