Now that you’ve already read a bit about the approach, let’s talk about buying, storing, as well as selling the currencies. There are many different marketplaces where cryptocurrencies can be bought or sold. This does not exactly make it easier to get started. For the German or European user, I can recommend the marketplace Bitpanda.
Purchasing via Bitpanda
Bitpanda is based in Austria and is therefore also regulated under European law. To buy or sell cryptocurrencies on this marketplace, you have to authenticate yourself, mostly via video chat. Most people already know Videoident from opening their own online bank account or even from an online loan application.
The advantage of Bitpanda is first of all the variety of possible deposit methods ( e.g. bank transfer, credit card, instant transfer…). Moreover, Bitpanda only trades a smaller selection of cryptocurrencies, which makes it easier to choose for an investment. These currencies/projects are verified by Bitpanda before they are added to the marketplace. This way, you get some assurance that the project is genuine and not a scam.
Purchase via binance
Besides all the advantages, however, disadvantages are just as important to weigh. As already mentioned, only a small selection of currencies are traded there and the fees for buying or selling are comparatively high. If you want to have the possibility to trade even more currencies, another marketplace is recommended. I would recommend Binance. However, this marketplace is based in China and therefore does not fall under European regulation. Here you have a very large selection of crypto projects that can be traded. Furthermore, Binance has a UserFund. This means that if the marketplace is hacked and the currencies of individuals are stolen, Binance will give its users a refund from the UserFund. This case has also happened a few times in the past and Binance has refunded each user the full amount of the lost currencies. Thus, unlike other marketplaces, Binance provides additional security to users.
Storage of cryptocurrency
After purchasing currencies of a particular project, the question of saving or storing the coins arises.
Speicherung auf der Exchange
The easiest way is to store the purchased currency in your account on the marketplace. This is also the most insecure option. Unfortunately, this option brings a lot of risks with it, such as a hacker attack on the marketplace or even the sudden closure of it. very simple and comfortable
+ very simple and comfortable
– can be easily hacked
– depends on the profitability of the exchange
– Exchanges = not cybersecurity companies/ primarily focused on financial market
Storage in a software wallet
The next option is to use a software wallet (programmatic wallets). These are programs or websites with which you can store your currencies. This option offers more security than storing the currency on the marketplaces, but is still not the most secure method.
+ Money is not entrusted to an exchange
+ Key in your possession and can be stored locally
+ No additional hardware required
– Responsible for security of computer (defect of computer leads to loss in case of doubt)
– Experience shows that transaction fees are high
– A lot of memory for reconciliation with blockchain
Storage in a hardware wallet
Another option, is to use a so-called hardware wallet such as a USB based device from Ledger or Trezor. From experience, this option offers the highest security when it comes to storing cryptocurrencies. The last alternative is the use of a paper wallet. However, this is one of the most complex variants, which is why I will not go into detail in this article.
+ Most secure storage for cryptocurrency
+ Compatible with most cryptocurrencies
+ Easy to use
+ Independent of exchange and computer
– Initial use may require explanation
– Must be purchased
The exact purchasing process and storage on the Ledger Nano S with step-by-step instructions will be explained in more detail in the next post.