Chapter 16: How to Choose the Right Coin and the Suitable Exchange
Most certainly, everyone has heard about trading by now. We all know about financial markets trading, like equities and commodities, that company shares are bought via the stock market — that anybody can access. The equity market allows buyers and sellers to transact based on shares price. These prices strongly correlate with the companies behind the shares, the company’s sales, quarterly economic growth, and other data made public by the company. On the other hand, cryptocurrencies rely mostly on technological projects and products in online ecosystems — a situation that gives an abstract note to perception, making them harder to understand. Thus, the general impression is that crypto trading is more difficult.
What are cryptocurrencies, and how do they work?
We’ve been over this before in our Crypto Fundamentals series, but let’s go through it one more time. Cryptocurrencies are digital assets created to serve as a store of value, but they can be used to buy and sell goods and services. Unlike traditional money, which is used on a larger scale and globally today, a cryptocurrency is not created by a central authority. Instead, its value is transferred and registered in a decentralized public registry, known as the Blockchain. Besides that, the coin’s origin and transfer properties are secured and verified via cryptography. Even if cryptocurrencies are not widely used, experts estimate that growth can reach 30% of the global population in terms of crypto use by 2030.
Among the most popular cryptocurrencies are Bitcoin, Ethereum, and Tether. However, an essential difference between a cryptocurrency, known as a coin, and a token is:
- a cryptocurrency has its blockchain
- a cryptocurrency is the original coin of the blockchain it represents
- a token is a unit that has value and represents the project built over an already existing blockchain
For example, ETH is the original coin of Ethereum’s Blockchain. But a token like DAI is built on the Ethereum Blockchain. DAI, by itself, is a stablecoin that can help traders reduce their risk when volatility hits the market.
Where does a cryptocurrency’s value come from?
Same as traditional coins, cryptocurrencies earn their value based on how big is the community that uses them. Given that most digital currencies are minted by private entities using Blockchain Technology, some factors that influence their value will come from the image and efficiency of these companies (such as the founding team and their reputation, the project’s viability, and the value perceived by the community). An excellent coin has some classical attributes: divisibility, acceptability, portability, durability, and censorship resistance.
These attributes allow a coin to find its usefulness on a larger scale in a global economy. The intrinsic value is the sum of all properties of a coin that make it possible to be used as a legal tender. The most essential attributes of a cryptocurrency are how rare it is and can’t be falsified.
Where can I transact on the crypto market?
If you wish to buy and sell cryptocurrencies, you will need to use a specific platform, like IXFI. Our platform resembles the stock market trading platforms, but instead of equity shares, IXFI offers just the right assets for a crypto trader: Bitcoin, Ethereum, and dozens more. As a result, IXFI is the best platform for exchanging the cryptocurrencies you want, with meager fees and maximum security. When choosing a venue, it’s essential to consider the following factors:
- accepted currencies
- prices and fees
- withdrawal options
IXFI is one of the most popular emerging exchanges that offers a long list of cryptocurrencies to choose from and the right tools to analyze the chart. Not only that, but it’s user-friendly, and that makes it so easy to use. But you know the saying: practice makes perfect. So, of course, more platforms offer this type of service, but it’s better to think twice before choosing the primary platform for crypto transactions because this market is known for its hacking and ransom accidents.
Besides exchange platforms, users can simply store their coins on a crypto wallet. These have a slightly higher margin than centralized platforms but do not provide versatility. In conclusion, it’s essential to ask as many questions as possible and search for answers before choosing the platform or the cryptocurrencies we want to trade. In addition, it’s necessary to gather as much information as possible about the project, its utility, and its past to make the best decisions.
If you’re ready to embark on this exciting journey as a crypto trader, Your Friendly Crypto Exchange is here to meet all of your needs, from an easy-to-understand interface to high security and low fees. Register on IXFI now to see what trading’s all about.
Disclaimer: The content of this article is not investment advice and does not constitute an offer or solicitation to offer or recommendation of any investment product. It is for general purposes only and does not take into account your individual needs, investment objectives and specific financial and fiscal circumstances.
Although the material contained in this article was prepared based on information from public and private sources that IXFI believes to be reliable, no representation, warranty or undertaking, stated or implied, is given as to the accuracy of the information contained herein, and IXFI expressly disclaims any liability for the accuracy and completeness of the information contained in this article.
Investment involves risk; any ideas or strategies discussed herein should therefore not be undertaken by any individual without prior consultation with a financial professional for the purpose of assessing whether the ideas or strategies that are discussed are suitable to you based on your own personal financial and fiscal objectives, needs and risk tolerance. IXFI expressly disclaims any liability or loss incurred by any person who acts on the information, ideas or strategies discussed herein.