Lesson 1: What Is a Crypto-currency Exchange? (For Beginners)
Hello and welcome to the Zonnovate page, where you will learn everything crypto-currency related. For today's lesson we will understand what is a Crypto-currency Exchange...
First lets understand how a bank works?
A bank stores many different currencies and allows people to store or exchange money through them. People can either leave their money with the bank or withdraw their money and hold it them selves. If they leave their money with the bank they no longer have full control over it and the bank can do whatever they want with the money good/bad. For this reason people choose to store their money themselves however this can be risky too as it can be stolen or lost. Another disadvantage to banks is that they charge very high transaction fees to cover the costs for all the intermediaries(the workers that facilitate your transactions).
The Similarities & Differences between a Bank and a Crypto-currency Exchange?
Similarly to the Bank a Crypto-currency Exchange allows people to exchange between different currencies and also store them, they usually charge small fees to keep the exchange running. You can exchange fiat currencies like Pounds(£) or Dollars($) to receive Crypto-currencies like Bitcoin(Ƀ). Once you make your first transaction you have 2 option; One to leave your crypto's on the exchange or to transfer them to your own personal Wallet.
It is always recommended to store all your currencies on your own wallet, especially if you have a large amount because once it is stored on your own wallet you have full control and no one can access your funds. Crypto-currency exchanges are relatively safe however its not worth the risk as there have been incidences before where people have lost large amounts of money. So storing small amounts(that you are willing to lose) at a time is not a problem but when you start posses large amounts of value make sure to transfer it to a safe wallet!
What is a wallet?
It is a software that stores 2 important keys that you need to access your money, it also allows you to receive digital currency and monitor your balance. Once you create it you will receive a Private-key, this key is the only way you can access your funds and should be kept in a very safe location as if you lose it you will also lose all the value in your wallet! You will also receive a Public-key which is used to send funds, however this is not that important as if you lose this key you can generate a new one using your Private-key. You can now see how useful the Private-key is and why you should keep it very safe. I will be releasing a new free lesson explaining what a wallet is, how you can get one and how it works soon...
What are the best Crypto-currency Exchanges?
Here are the best beginner friendly exchanges that I recommend:
- KuCoin - Use my link and get 50% of all trading fees! This is great for beginners just starting out so you can practice making transaction with extremely low fees. Plus this exchange has the most user friendly interface. https://www.kucoin.com/#/?r=Rxyvwu
- Coinbase - Use my link to earn $10 worth of free bitcoin when you buy or sell $100 worth of digital currency. This is an awesome way to get into crypto-currency trading and who knows those $10 worth of Bitcoin could be worth thousands in the future! https://www.coinbase.com/join/5af0ce6e2a57d40b71610ded
- Binance - Has an IOS and Android app which is great for beginners as very convenient as you can trade and transact anywhere! I would appreciate if you could help us continue to provide content by using the referral links thank you :) https://www.binance.com/?ref=29225015
