How to Use an API Key for Crypto Trading
As the cryptocurrency market grows, companies offer increasing amounts of software and services to help cryptocurrency users get the most out of their trades. To use these services, you can grant a third-party program access to your personal account through an API key.
For example, the company I work for, Neuryx Club, offers proprietary trading tools to help me avoid fees and slippage and help me understand what’s currently going on in the market when I trade. With an API key, I can leverage my exchange account in Neuryx Club, my third-party software.
An Application Program Interface (API) Key is like a complex username and password system made up of an API Key, API Passphrase, and API Secret that allows the program of your choice to “communicate” with your trading exchange or wallet.
This article will explain how to obtain an API Key from an exchange to allow third-party software access to your personal trading platform, using Coinbase Pro as an example, and some tips on how to keep your information and assets secure.
Obtaining an API Key
To start, log into your exchange account. The specifics for each exchange will be a little different, so most exchanges have a support page you can look at. Make sure you understand how your exchange manages API access to your account, as this is one of the most important parts of protecting your account.
To get your key on Coinbase Pro, go to the top right corner of the page, hover your mouse over the icon with three bars, and select API on the pop-out menu. You’ll see this page pop up:
Permissions
Permissions are the level of access you give the API key and subsequently your third-party software. The exchange you use might use a different name (i.e. Bittrex calls them Authentications), but whatever they’re called, selecting certain permissions grants your third-party software different rights in viewing and managing your exchange account.
Coinbase Pro, for instance, offers three types of permissions: view, transfer, and trade.
The “View” option allows the third-party software to view your balances and trade information within Coinbase Pro, but it won’t allow them to do anything with it.
By selecting “Transfer,” you authorize the software to transfer money in and out of your account and will allow transfers without 2-factor identification. This option is extremely risky, as it gives unlimited access to your Coinbase Pro funds. Do not use this function unless you are using an API Key with personal software on a trusted machine.
The “Trade” option authorizes the software to trade currencies on your account in the Coinbase Pro exchange.
Again, before you create an API Key in any exchange, understand exactly what kind of access to your account you allow your third-party software your third-party software asks for.
Creating Your API Key
After you’ve selected your preferred permissions, click “Create API Key” at the bottom of the page. Coinbase Pro will then walk you through a two-factor authorization process and then give you your API Passphrase, API Key, and API Secret.
Take a screenshot or write your keys down as soon as you get them, and keep it in a secure place, because your API Secret will only be shown once. As soon as you leave the page, it’ll be permanently deleted, and you’ll have to create a new API key if you lose it. You can then go to your third-party software and grant them access to your exchange account.
Make sure you trust the software you give your API key to, as they will have varying access to your funds depending on the permissions you give them. Write your key down, put it in a safe place, and don’t disclose the information freely. If you think that your API key is being used by untrustworthy entities to access your funds, you can always go into your exchange account and delete that key.
Neuryx Club
Cryptocurrency investment is an exciting world of opportunity, growth, and potential, and represents the future. Entering the cryptosphere is as much about learning as it is investing, and the important thing is not to invest more, but to invest smarter.
Neuryx Club is an AI-powered crypto trading assistant that offers exclusive analytics and advanced trading tools to help you stay on top of your crypto game and trade smarter.
