Let’s talk about buying, selling, and maintaining cryptography. The first thing to know is that cryptos are very different from other things you invest in. When you buy gold, you actually get coins (or bricks) from the shiny metal. You can keep these coins safe in… a vault! When you buy a house, you actually get physical “ownership” of it.
Encryption is very different. You start by generating a “wallet”. This is what a typical Bitcoin wallet looks like:
[private] => 4dbc14f358dd8460e0385a7f6bf41543bfbd18536df17663b506fb39e888e8b4
[public] => 025df5e6c5745cc3a7a710b0b3ee5b45ed283b80e667719f9775a55442dd769e71
[address] => 163oHghC4NBoJtTRdwQzZTJk14BeVt51Jg
[wif] => KyppLYGbQd2eByxJmh1hA9L3fEdwefugp58cLC74kCv8Yi4WAUXQ
If you write this down on a piece of paper, it would be called a…paper portfolio. Typically, people store their encryption in a mobile phone or web wallet. It’s a mobile app or web service that stores their keys and addresses.
O household is similar to your bank account or UPI ID. Anyone can send encryption to your address. If you send encryption to the “wrong” address, it will disappear forever! Also, keep in mind that the same address does not work for all cryptos, for example a Bitcoin address does not work for Dogecoin.
O private key it’s what you need to “sign” transactions, that is, send encryption to someone else. If someone gets your private key, they can transfer all your encryption to another address. This is what happens with most encryption “hacks”.
There are many ways you can buy, sell and maintain encryption
The most common is to use an encryption exchange. AN encryption change authenticates you using your username, password and email / SMS OTP (unique password). After logging into your account, you can transfer fiat (rupee, dollar, etc.) to your account and use it to purchase encryption. Likewise, you can sell encryption and put the fiat in your bank account.
The problem with the centralized exchange method is that encryption is not in your “wallet”. It’s in the purse wallet. So if the exchange encryption packs up or the team decides to go away with your encryption, there’s practically nothing you can do.
You must use encryption exchanges for negotiation only. If you plan to maintain encryption for a longer period of time, you should use a paper wallet, a hardware wallet, or a software wallet. These are called “non-custodial” wallets because no one else has custody of your private keys but you. In fact, there is a saying in the world of crypts that goes “Not your keys, not your coins.”
paper wallets are inconvenient to use, but are the safest option. Consider using them if you have a large amount of encryption to keep for an extended period of time.
hardware wallets they are a little expensive and there is always the risk of losing or breaking them. I speak from experience!
software portfolios are free and very easy to use. But if you accidentally delete them, their encryption is gone forever. Once again, I’m speaking from experience! So remember to back up the seed phrase – a bunch of words you can write.
An example of a seed phrase is:
history lumber quote board young dove rugged kit invitation regular plastic skull
If you’re just starting out, I recommend downloading trust portfolio, the most popular software portfolio. It supports 53 blockchains and over 160,000 crypto and digital assets. You can buy cryptocurrencies using a credit card and even earn interest on your encryption balance.
Another cool way to trade encryption is to use “swap” services like Uniswap, which you can use to trade tokens based on the Ethereum ERC-20. These are also called decentralized cryptographic exchanges. See the figure below:
Rohas Nagpal is the author of the Future Money Playbook and Chief Blockchain Architect of the Wrapped Asset Project. He is also an amateur boxer and a retired hacker. You can follow him on LinkedIn.