For new investors, cryptocurrency is the buzzword. As promising as it is in terms of providing short term returns, it is also volatile and risky. The whole idea of cryptocurrency is based on a distributed ledger that stores information on each transaction or trade. In addition, the business is secured by high grade cryptography. The simplest way to invest in cryptocurrency is to trade (buy and sell) any crypto coin like bitcoin, ethereum, dogecoin, cadence etc. These are done through online exchanges where investors open an account and start trading.
What is a cryptocurrency exchange?
These platforms facilitate cryptocurrency trading in exchange for digital and fiat currencies. They act as an intermediary between a buyer and a seller and charge a commission or transaction fee. CoinDCX, CoinSwitch Kuber and UnoCoin are some examples of online exchanges operating in India. An investor can use an online exchange to convert their crypto coins back to fiat currency (Indian Rupee or US Dollar) to withdraw funds from their bank account later.
How does this work?
A cryptocurrency exchange acts like an intermediary – a brokerage firm – between a buyer and a seller of a cryptocurrency. It allows a buyer to deposit money using multiple methods like direct bank transfer, UPI, using debit or credit cards, etc. It charges a set commission or fee for every transaction made using its services.
The first thing a buyer (or investor) needs to do is to find the right online exchange. This move will require a lot of research into the history of the platform, reliability and what benefits it will provide you for trading. The next step is to open a trading account, which is quite simple.
Download the app of the exchange you have chosen and create an account. It will ask you for some information like your email address. It will then send a verification email to that address and may also ask for KYC details. Verify the address on your email ID and complete the KYC process. Then set a password on the app and you are ready to launch yourself into the world of cryptocurrency.
Don’t lose any passwords related to the app, wallet or exchange. They cannot be recovered.