How To Safely Store And Trade Your Cryptocurrencies

Although Bitcoin has proven to be the most profitable cryptocurrency currently, investors should aim more towards trading between the various cryptocurrencies available since it seems that it can maximize their profits without having to invest heavily in a single coin. If you’re looking to make the maximum profits from cryptocurrency trading, this article will certainly show you how to do just that.

How to make profits out of cryptocurrency

Regardless of how revolutionary blockchain technology is, tech people and investor’s highest priority is to actually make profits from the distributed ledger, either by building businesses on top of the platform like ICOs or investing in various coins and making profits from trading and exchanges. However, if you’re looking to make big profits on a short-term basis, you should definitely get into crypto trading.

Trading – Buy lower and sell higher

If you’re looking to master the art of crypto trading, you should have a thorough understanding of the concepts and mechanisms that cause a coin to increase or decrease in value. This fluctuation introduces the concept of volatility. Volatility is a concept that measures the variance of the price of a certain financial instrument within a certain period of time. It is commonly associated with the risk level of the instrument, a highly volatile instrument is regarded as risky, and a less volatile instrument being less risky.  Therefore, it is important to understand the volatility of Bitcoin and other cryptocurrencies if you are looking to invest or trade in the cryptocurrency space. Once you become familiar with volatility, and have the ability to predict to some degree of certainty whether a coin will increase or decrease, nothing can stop you from making huge profits with crypto trading in a relatively short amount of time.

How to store your cryptocurrencies

Now that you have an idea about crypto trading and how profitable it can be, we will guide you through the next steps, from having your own wallet to exchanging coins on various exchange platforms.

Your own wallet 

Wallet Types

In order to obtain and store the cryptocurrencies that you bought, you will need to have your own wallet. Types of wallets vary depending on the currency that you have and the device that you’re using. The table below shows some widely known cryptocurrencies as well where you can store them

Cryptocurrency Widely Used Wallets
Bitcoin Bitcoin Core, Bitcoin Knots, Bitgo
Ethereum Mist, ETHAdress, MyEtherWallet
 XRP Gatehub, Rippex

Transaction Fees

To get a transaction of yours recorded within a block in the blockchain, a transaction fee must be paid. These fees are different depending on the cryptocurrency that you’re transacting with as well as the wallet where you are storing your bitcoin. As the number of participants in the blockchain of a cryptocurrency increase, transactions do not only take more time to get confirmed, but transaction fees increase as well. This issue was the main topic of debate in the recent Segwit2x. On the other hand, the high transaction fees in bitcoin’s network is effectively what led Steam to stop accepting btc payments.

Advantages

  • Transactions can be done directly and quickly because there is no need to exchange your currency to another currency to make a payment.
  • The  increased security that comes with the possession of your private key. You can either store this locally or back it up on multiple sites.
  • No reporting requirements.

Drawbacks

  • Not suitable for trading; on volatile BTC exchange rates, you may want to sell immediately, however the transfer from your private wallet to the exchange account takes some time.
  • The risk of equipment damage where you’ll have to spend time on the recovery.

Exchange wallet

Security

Unlike storing your currencies in your own wallet, dealing with exchange wallets makes you vulnerable to the various security threats all over the web, especially since hacking such websites leads to stealing a substantial amount of money, as was the recent case when the mining exchange marketplace NiceHash got hacked. This resulted in the theft of $64 million of bitcoin.

Withdrawal Fees

With so many Bitcoin exchanges emerging nowadays, it can get quite confusing knowing where to get your Bitcoins. Most people do “the obvious thing,” which is to compare the different Bitcoin exchanges based on the exchange rate and then go with the cheapest one.

The problem is that the exchange rate is only part of the equation, and sometimes a very small part of it. When trying to figure out how much it will cost you to get your Bitcoin from a specific trading platform or broker, you have to take into account the total money you spend in comparison to the total amount of Bitcoins you’ve received.

The right thing to do would be to also calculate the transaction fee that a specific platform would charge you. But there isn’t just one fee to take into account – there are actually five.

Transaction fee

This is what any trading platform or broker will take as a fee for their service. This fee can vary between exchanges from as little as 0.2% to as high as almost 3%.

Deposit and Withdrawal fees

Whenever you’ll want to use a specific platform, whether it is a broker or a trading platform, you’ll have to deposit some money first. Depending on your selected payment method you may have very different deposit fees. Usually, the riskier the payment method is to the exchange, the higher the fee. Unfortunately, it doesn’t stop there because several exchanges will even charge you a withdrawal fee for withdrawing your own bitcoins. Although not as common as a deposit fee, the withdrawal fee is another variable to add to your calculations.

Payment Processor Deposit fee

Depending on your payment method, the payment processor may charge you a fee for using their services. For example, if you wire in money to an exchange, your bank will probably charge you some sort of fee for that. If you use your credit card to deposit at an exchange you may get charged as well.

Currency Conversion fee

This fee is avoidable in many cases. If you deposit US dollars in an exchange that only accepts Euros you will also need to pay a fee for converting your currency. This can be done by your bank or the exchange. The wisest thing to do here would be to avoid the need to exchange the currency in the first place. Try depositing currencies that are accepted by your exchange.

Advantages

  • It offers an easy way for users to buy or sell currencies without meeting with another person that wants to trade the exact amount of bitcoin.
  • Liquidity; you can quickly trade bitcoins for dollars and vice versa.
  • Highly useful for crypto trading, especially with the volatility of currencies, which enables you to maximize your profits by exchanging amongst various currencies via exchange platforms and wallets.

Drawbacks

  • Compromised security since your private key is being stored on the web.
  • Risks of fraud on the holding exchange’s behalf.
  • If an exchange wallet is hacked, no authority would pay you out.

Platform solution

In this part, we take an interest in a platform solution for storing and managing your currencies. xChainge is a new decentralized financial platform for storing and trading crypto assets. This platform rids its users of trade regulations and eliminates cheating risks. Let’s find out below about the benefits of xChainge

Benefits

Easy to use

xChainge is based on the best examples of mobile banking applications to offer you one of the simplest UIs out there, and to make work with your wallet easy and user-friendly. Moreover, it offers an easy-to-use smart contract builder for fully customizable exchange transactions. Using the xChainge cross-chain P2P platform, xChainge wallet users are able to exchange ETH and ERC-20 tokens for any other cryptocurrency. At the moment, there are no solutions that allow the same without having to trust the other party. To resolve possible disputes, the mechanism of mediators is introduced. Mediators are the xChainge users who get tokens (XCH) for resolving conflicts that may arise between the parties.

More secure

xChainge offers secure peer-to-peer exchanges in the sense that the private keys of the xChainge wallet users are created and stored on a local device and are never transferred to any external server. Users maintain complete control over their assets, and due to the Proof-of-Snitch protocol your assets are held in absolute security. Other users or Matchers cannot cheat you or threaten your deals in any way. All your transactions are insured by Arbiters, Notaries, and Matchers` security deposits. Software wallets usually store private keys in a “wallet file” on the main hard drive. Wallets often place this file in a standard, well-known directory, making it an ideal target for bitcoin-specific malware.

Faster

With xChainge you can be sure to have almost the same transaction speed as that of centralized exchangers due to their unique Matcher nodes. You will not have to spend anymore time waiting — your transaction time is kept to a minimum. The xChainge platform also offers marketplaces to quickly exchange tokens at speeds comparable to that of centralized exchanges, maintaining full control of assets at any step of a transaction. It allows doing fast exchanges of any digital assets without a necessity to provide access to one’s money to a third party.

Free

The xChainge wallet will not charge users for any transfers, either involving ETH or any ERC-20 tokens. The only expenses the user will face will be Ethereum network transaction fees. Installing the wallet to store crypto assets is, naturally, free of charge. In other words, there are no operational costs at xChainge, only the standard transaction fee. Matchers and Mediators have their own prices providing fair competition and the lowest prices.

Storing in the platform wallet

Upon entering the application, the user is presented with the Dashboard, which is composed of basic information about the user’s wallets, account balance, change chart, recent transactions, and the exchange rates of major crypto assets. The menu on top of the screen allows the user to quickly navigate between sections of the wallet.

The “Wallets” tab provides the user with more detailed information about their wallets, and lets the user perform various actions. xChainge doesn’t impose restrictions on the number of wallets a user can have. The creation of a new wallet occurs instantly upon selecting the corresponding option. Users can assign names to their wallets in order to make navigating between them much easier.

A more detailed analytics tool is available on a dedicated wallet page which includes a
complete list of conducted transactions, currently held assets, and other information. On
this page, wallets can be recharged or used for payments and transfers.

To recharge a wallet, a user can use its address or a generated QR code which bears the information about the wallet. To make a transaction, a user should select a source wallet, a target address, and the amount of tokens. The Gas Limit, Gas , and the Max Transaction Fee can be left at their default settings or entered manually.

If a user makes frequent payments or transfers to a particular address, it can be assigned
a name and saved into the address book for faster access. Later, the user can quickly
select it as a recipient without having to enter the wallet’s address every time.

Trading from the platform wallet

To use the P2P asset exchange, users should navigate to the corresponding section,
which lists all the available offers. These offers can be filtered by asset type, range, and
transaction volume.

If a user doesn’t find a suitable offer, he or she can create a new one. To create an offer, a user
should choose the type of assets, the source wallet, the offer, and enter the expiration date. To help with this process, a list of the current exchange rates are provided on the same page. This information is updated in real time based on data extracted from popular exchanges. Users may also manually select a specific exchange to use its rates in the future. After all the parameters are set, the offer is published on the network.

Conclusion

Despite the various issues and potential risks that comes with trading and storing cryptocurrencies, especially when a user has to deal with multiple wallets, the emerging platform solutions like xChainge make trading and storing your crypto assets an easy task that can be achieved with just a few mouse clicks.

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