Buying and Selling and Using Cryptocurrencies

Cryptocurrencies – Buying and Selling – Wallets and Exchanges


I have chosen to compile the following guide as I am aware that many people are still not completely confident that they fully understand the ins and outs of using cryptocurrencies.

When you do show an interest in buying and selling and then using digital currencies, and you start to research how you go about doing so, you are often overwhelmed with so much information you can actually be put off ever using them!

So with that in mind please do read through this guide, for I am completely confident that when you do so you will gain a much clearer insight into how cryptocurrencies work and operate and how you are very easily going to be able to go about buying them and then using them.

Mining for Cryptocurrencies

One of the most complicated aspects of cryptocurrencies to someone with no experience of using them is getting their heads around how they are mined.

Many people have heard of great fortunes being made by people and companies who do go mining for cryptocurrencies such as Bitcoin, and want to try and do so themselves. However, it is not an easy task nor is it an inexpensive task, going about mining for Bitcoin or other digital currencies.

In layman’s terms, mining for digital currencies is simply having the computer power at your disposal to work out some highly advanced mathematical equations. Each time one of them is solved the person who solves them are rewarded with Bitcoin.

The vast majority of people mining do not however ever manage to acquire any Bitcoin or other digital currencies, for it is those who does have enormous computing power that are always going to be best placed to work out those mathematical equations first.

With that in mind I would advise you to forget about mining for Bitcoin or other digital currencies and leave it to the experts! Instead of mining for them simply go about buying digital currencies, which is what the vast majority of people do.

Digital Currency Wallets

Trying to get your head around how you move digital currencies around is actually not going to be too taxing on your brain! For all that you are going to have to get hold of is something known as a digital wallet.

You will find any number of them available however keep in mind some of them can only be used to store one type of digital currency whilst many others will allow you to store multiple different digital currencies within them.

You simply download the digital wallet onto your computer or on any modern day type of touch screen mobile device and then you use your unique digital wallet address as the one you give out to anyone that is sending your any quantities or units of any cryptocurrencies.

You can then send any units or quantities of digital currencies to anyone who also has a compatible digital wallet for the cryptocurrency you wish to send them. You do so by simply sending the digital currency from your digital wallet to their digital wallet address.

It is important that you do not leave your digital currencies hanging around for too long in a digital wallet for there are risks attached with doing so. With that in mind please do read on as I will be taking a look at several ways you can store digital currencies offline below.

 

Digital Currency Exchanges

The way in which you buy an initial holding of any digital currency is by making use of a digital currency exchange. One thing you will need to be aware of is that there are a huge number of them now available.

They can and will however vary in regards to just which digital currencies they will allow you to buy and sell, and some exchanges may be geared up to just one type of digital currency, whilst most others, the majority in fact will allow you to buy and sell a huge range of them.

It is also important for you to understand that you are going to have to have at your disposal a payment method to actually buy your digital currencies with, and one way you can buy them very easily is with the use of a debit card or even a credit card.

If you have another digital wallet and use a different digital currency than the one you intend to buy then there are also no shortages of digital currency exchanges that will allow you to buy one digital currency with another one, or you can of course pay in a fiat currency by using for example a web wallet or even a bank transfer or bank wire.

You should compare the fees and the charges that you are going to be forced to pay when buying any digital currency for the fees and charges can vary and will also vary in regards to the payment option you choose to use to pay for your purchases on any digital currency too.

In regards to selling digital currencies of any type you will also find fees and charges are going to be levied onto you and also you will have to pick a payment method that is convenient for you to receive the processed of your sale too.

Timing when to buy and sell any digital currencies is also important as is the amount of time any digital currency exchange will take to process your buy or sell orders, as the price of most digital currencies can be very volatile so you will be looking to buy or sell when the spot rate is favourable to you of course.

Storing Your Cryptocurrencies

Never take the security of your digital currency holdings for granted, for they are going to be at great risk if you do not look after them, and by look after them I mean store them safely and securely in one of the many different ways you can now do so!

Therefore look at the many different ways that you are going to be able to store your digital currency holdings, many people make the mistake of storing them on their mobile devices or on their computers or laptops.

However, think about what would happen if your mobile device got stolen or someone managed hack into your computer and then access your digital wallet.

There are a rage of devices that you can now buy, and I would actively encourage you to buy, that are going to allow you to store you digital currencies offline, and in cold storage too and as such no one is going to be able to hack into those devices as they are not connected to the internet in any way shape or form.

Those devices will cost you something to buy obviously, however that small initial expenditure you will have to make to get them s going to be massively outweighed by the cost of replacing any digital currency holdings that may get stolen from you.

So with all of the above in mind, before you do ever make your very first purchase of Bitcoin or any other digital currency please do look into the many different options that are available to you to store your holdings, and make sure that you have something in place whereby you can store them securely when you do make a purchase to negate any possibility of them being stolen or accessed by anyone else.

Buying Goods or Paying For Services

One aspect of cryptocurrencies that many people completely forget about is that they can of course be used to pay for goods and services rather than just being used as a form of investment, in fact paying for goods and services was the main idea behind the launch of Bitcoin!

In fact, what you are going to discover, much more so with some of the much newer and soon to be launched cryptocurrencies is that they are targeted at one type of market place, and that should be something you l earn more about.

I have for example seen some cryptocurrencies that have been launched with the sole intention of allowing gamers to move money seamlessly into gaming sites, whilst I have also seen some other digital currencies that are for the house letting market place.

As such if the one main reason why you are thinking of buying digital currencies is to pay for goods and services then consider making use of one that is ideally targeted at the market place you intend to use your digital currency holdings on.

The main advantage of going so is that you are much more likely to find a plethora of business that are going to accept payments using those targeted and specific digital currencies, than you may do when using another digital currency.

But at the end of the day it is always going to be your decision and your decision alone in regards to just which if any digital currency you do end up using. Just make sure you never rush into buying the very first one you come across, as it may not be the best one suited to your needs and requirements of course!

All Cryptocurrencies Can Be Volatile

It is very important that you are always aware of the fact that all cryptocurrencies can be, by their very nature, highly volatile, and the price rises and price falls of many of them can take even the most hardened of digital currency investor by surprise.

Therefore what you should ideally be looking to do, if you are an investor in digital currencies or want to become one is to look for some of the new digital currencies that have only just gone live or maybe about to launched very soon.

For often those lesser well known digital currencies can rise in value much quicker and by a much bigger percentage that some of the more well know digital currencies.

One of the main advantages however of making lots of investments in some of the newer and soon to launch cryptocurrencies is that the price of buying them is going to be a tiny fraction of what you will have to pay if you wish to invest in for example Bitcoin.

It will only take one or a handful of your cryptocurrency holdings to show a marked increase in regards to their values for you to potentially make some very substantial profits, so always keep your eyes peeled for some of those lesser well known cryptocurrencies, and there are certainly plenty of them to pick and choose from by the way!

One slight problem you may have if you do fancy investing in the lesser well known and soon to launch digital currencies is not finding many exchanges that offer them for sale.

However, with some hunting around you may find a couple of them that do, but you may however have to content with some slightly higher fees and charges when you have access to just a small limited number of exchanges.

Knowing When to Sell Cryptocurrencies

If the one main reason you are going to buy any cryptocurrencies is as an investment, then the only way in which you are going to be able to profit from that investment is by selling your holdings for more than you paid for them.

I have heard of countless people who have never invested in digital currencies before, buying up large quantities of them, in the obvious hope of then making some huge profits from their holdings, but they then get spooked and sell them at a loss!

It is often when there has been a dramatic fall in regards to the value of any one digital currency that most first time and inexperienced investors in digital currencies are going to get spooked, and when a large number of them do so and then start selling their holdings on, the price will drop and often even more dramatically.

As such, you need to look at investing in any cryptocurrencies with a cool level head, and never be put off buying more when there is a dramatic drop in the price of any of them, for there is a good chance, as history has proven time and time again, that the value will recover, often in a short period of time too.

So if you do buy any cryptocurrencies, make sure your strategy is such that you only ever sell them when the price has increased over and above what you initially paid for them, and never ever be spooked into selling them at a loss.

Also keep in mind that you may be best off looking at any cryptocurrency holdings you acquire as a long term investment and not one that is going to allow you to buy them quickly and the sell them on for a profit just as quickly!

Bitcoin ATM’s

There is actually another fairly new and quite imaginative way that you are going to be able to buy and sell Bitcoin and that is buy you tracking down and then using an ATM nearby where you live or in any town or city you may be visiting.

The way in which a Bitcoin ATM works and operates is fairly straight forward, for you first need to decide if you wish to buy or sell Bitcoin using one, and then simply use your mobile device on which you have your Bitcoin Wallet stored to sell or buy Bitcoin.

If you do decide to sell any holding of Bitcoin at an ATM then you will be paid out for that transaction in the local currency, and as such that does offer people a handy way of carrying cash about when on holiday for example without physically having to carry cash in their wallets.

Simply decide on the quantity of your Bitcoin holdings you would like to sell and in a matter of minutes your transaction will be fully processed and the proceeds of that sale will be fired out of the ATM in cash!

Buying Bitcoin is just as easy as selling it when using a Bitcoin ATM, but do keep in mind there are going to be fees and charges to be paid when using one, and some of those fees and charges could be quite excessive too!

Spread Betting on the Value of Cryptocurrencies

There are plenty of additional ways that you may be interested in attempting to cash in on the very volatile movements in regards to the value of digital currencies, and one of the most high risk ways you could do so is by making use of a spread betting company.

When you do so you have to decide which digital currency you would like to place a spread bet on, and how much you wish to wager on that digital currency either increasing in value or decreasing in value over a certain time scale.

However, the way in which your bet either wins or loses is often determined by just how far in either direction your chosen digital currency moves in value.

If for example you think Bitcoin will increase in value over a certain time scale and you place a spread bet, but the value of Bitcoin drops through the floor then for each unit as dictated by the spread betting that Bitcoin does fall in value, you will be forced to pay a multiple of your stake amount.

If however the value of Bitcoin does increase, and increases massively then you will win your bet and will be paid out at multiple of your stake for each unit or fraction of a currency it increases in value.

Just be aware that spread betting is a win or lose type of environment, and you can lose a lot of money, much more than the initial stake you place on such bets, so you should only ever think about using a spread betting firm if you are fully are of the risks and are prepared to take those risks to!

Cryptocurrency Forex Pairings

Forex Brokers, of which you will find a very large number of them available online, do also offer a way that you can hopefully try and profit from either the rise or fall of any one individual cryptocurrency.

The way in which you are going to be able to do so is by first selecting a digital currency and also a fiat or another digital currency to pair up together, in what is known as a Forex Pairing.

What you need to do is to select the digital currency that you think will either rise in value or decrease in value against the fiat or digital currency you have paired the one you select up with.

The length of time that a Forex trade will be live and active for can and does vary, so you will often find you are free to select any time period for you trade to be live.

A Forex Broker will then offer you payout odds on your chosen pairing, and you have to simply select a stake you wish to place on that trade. Once the trade expires if the digital currency has moved in the direction you predicted against the fiat or digital currency you pair it up with then you win at the payout ratio the Forex Broker offered you in regards to your stake.

If however the value of your chosen digital currency moves in the other direction than the one you selected then that trade is a losing one and the stake you placed on it is lost.

The one major thing to be aware of when trading digital currency pairings at a Fore Broker is that your stake is always at risk and could be lost on any trade you do decide to place.