There’s no denying that understanding cryptocurrency is tough. Blockchains, DeFi, and trading can all be challenging to understand, and a lack of understanding in this realm can sometimes lead to big mistakes.
But there are things you can do to simplify cryptocurrency for yourself to avoid being overwhelmed. So, here are the best ways that you can make your crypto experience easier.
1. Limit the Number of Exchanges and Wallets You Use
With so many different crypto exchanges and wallets today, it’s easy to sign up for many of them and overload yourself with multiple accounts, passwords, private keys, and so on. While using more than one exchange or wallet is not unheard of, it is essential to only sign up for what you need.
On top of this, it’s best not to spread your funds over a large number of accounts unless absolutely necessary. Losing track of what funds are where can happen easily in such a scenario. This is why it’s important to keep on top of the exchanges and wallets you use and only use those which are needed.
If you’re new to crypto, you might want to consider using exchanges and wallets that are relatively simple to use. Some exchange interfaces can be confusing and intimidating, so it’s always worth opting for a less complex exchange as you start.
The same goes for wallets here. While most software crypto wallets are pretty straightforward, some are easier to understand than others. And, if you want to use a hardware wallet, ensure you know how they work and how to use them before buying one.
2. Understand the Key Types of Crypto
Though all cryptocurrency is virtual, there are various categories under which a given asset may fall. The two major categories are Bitcoin and altcoins. Of course, the only coin within the first category here is Bitcoin, but it is the first and by far the most popular cryptocurrency out there today, so all other coins are generally known as altcoins.
But the altcoin category has a wide range of subcategories, with these subcategories sometimes even having further categories. For example, stablecoins are considered altcoins, but there are four different kinds of stablecoins.
There are also privacy tokens, utility tokens, and governance tokens. You should also know that there are differences between crypto coins and crypto tokens.
Understanding what each kind of digital asset does is critical, as you want to know exactly what you’re investing in. For example, you wouldn’t invest in a stablecoin if you’re looking to buy low and sell high, as stablecoins are not designed to increase in value massively.
So, before making any purchasing decisions in the crypto market, ensure you understand how each kind of asset works and what it can offer you.
3. Use a Crypto Stats App
If there’s one thing you need to know about the crypto market, it’s that things can change very quickly. A coin could double or halve in value in a matter of hours, and there are major opportunities that you may miss out on if you don’t keep yourself updated.
This is where a crypto stats app could be handy. Examples of such apps include CoinGecko, CoinMarketCap, and Crypto Bubbles. These can offer you statistics on just about any cryptocurrency out there, be it market leaders like Bitcoin and Ethereum or smaller players like Sologenic or Dero.
Using such apps, you can check not only a given crypto’s current price but its past trajectory, market cap, trading volume, and more. Furthermore, many of these apps don’t just show crypto statistics.
Take CoinMarketCap, for example. This app offers information on crypto exchanges, publishes updates and developments in the crypto realm, and has its own community wherein you can have your say on crypto-related topics and see what others are thinking.
In short, a crypto stats app can keep you on top of what’s happening and help you learn more about crypto. If you want to find which app can offer you the most, you can check out our piece on the best crypto stats apps available.
4. Log and Organize Your Private Passphrases
Today, scams within the cryptocurrency industry are rife, with cybercriminals doing whatever they can to get their hands on your private information to access and steal your funds. This is why passwords, private keys, and seed phrases are used in the crypto industry.
But when you have multiple crypto-related accounts, be it with an exchange, wallet provider, lending platform, or anything else, keeping track of your passphrases can be very difficult.
However, losing your private key or seed phrase isn’t like losing your Facebook password. It can be very tricky to create a new private key, and if you lose your seed phrase, you cannot get a new one, meaning the wallet it is tied to is now unusable.
This is why organizing your private data and storing it very securely is important. Many choose to store their login information offline, be it on a hard drive or simply on a piece of paper, which is then stored in a secret safe place.
While you can use a virtual password manager to do this, we do not recommend using apps to store highly sensitive information, as such apps are always at risk of malfunction or hacking.
5. Know Your Options
The crypto market doesn’t just involve purchasing and selling digital assets. There’s now a lot that you can do with your crypto funds beyond basic trading. Staking, lending, borrowing, and futures trading are all options for crypto holders.
The DeFi realm is now incredibly diverse, so it’s worth researching what you can do with your crypto holdings before making any firm decisions.
Some exchanges, like Binance, are known for their wide range of options for expanding your crypto portfolio, while others are more limited in their features. So, depending on what you want to do with your crypto, certain exchanges may be more suited to you.
Some retailers also accept payments in the form of cryptocurrency, which gives you another way to use your funds. You can check out the top retailers that accept Bitcoin or find Shiba Inu-friendly establishments if you want to spend some of your crypto holdings.
Crypto Can Be Confusing, But You Can Also simplify it
It’s natural to view the cryptocurrency market as intimidating. Many see this realm as only suitable for tech and finance pros, but this isn’t the case. Using the tips above, you can simplify your crypto experience and keep things manageable and straightforward.
The information on this website does not constitute financial advice, investment advice, or trading advice and should not be considered as such. MakeUseOf does not advise on any trading or investing matters and does not advise that any cryptocurrency should be bought or sold, ever. Always conduct your own due diligence and consult a licensed financial adviser for investment advice.