It can be dizzying trying to figure out which crypto exchanges to use, which ones are responsible, and which ones have the right tools to make sure crypto scams aren’t pumped and dumped on their exchange. what they are about, and how they can help you in your journey into the crypto space. Choosing how to buy Bitcoin, Ethereum, Dogecoin, or whichever Altcoin you’re looking for can be frustrating. In this article, we will guide you on what to look for in crypto apps.
Sometimes we get lost in the sea of choices. Whether you are shopping for the best bang for your buck laptop or figuring out which restaurant nearby will satisfy your craving, the bottom line is this: There’s too much info and it’s hard to know where to start. When looking at cryptocurrency projects, you’ll likely find yourself in a similar, but oftentimes worse, predicament.
Are There any Differences?
Plenty of crypto apps exist so it’s important that you choose a crypto app that suits your needs. When looking at health-related apps, for example, some are focused on the calorie consumption count. Others may focus on tracking how many steps you took in a day, while another will focus on monitoring vitals. Though these examples are all health-related, there’s a focused purpose for each app, and crypto apps are no different. Below are the main types of crypto apps that will help you focus on your goals.
Cryptocurrency Exchanges
If you’re amongst those that are looking to make money by investing in cryptocurrencies, then you’ll need to get acclimated with the various types of cryptocurrency exchanges. Most have the same underlying premise which will allow you to buy, trade, and sell crypto assets just as you would in a stock exchange. And yes, candlestick charts for technical analysis are commonly found across all of these apps.
The differences between each crypto exchange are nuanced just as NASDAQ is to the NYSE but most crypto exchanges will have an option for advanced or professional users. You’ll have access to various trading strategies such as placing stop, market, or limit orders. Some crypto apps feature even more advanced options such as futures or margin trading as well.
Focus on the key areas such as cryptocurrency selection, security, trading features, and fees. Below are some cryptocurrency exchanges picks to help you get started.
Coinbase
Coinbase is like Walmart in the world of cryptocurrency exchanges and its selection of cryptocurrencies is huge. Their list of features is more than enough for the beginner but beware because the fees for each transaction are amongst the highest in the industry. Switching to Coinbase Pro will help because fees are lower there. Be prepared for headaches when it comes to customer service because Coinbase is notorious for having poor support. Coinbase went public so we would hope regulations are stemming responsible monitoring of crypto to make sure there are no scams traded on their platform.
Kraken
Kraken takes security very seriously and they are often touted as one of the most secure crypto exchanges around. You can rest assured that your deposits are safe from hackers because they’re stored in physically separate facilities that aren’t tied to the main exchange. Their servers are kept secure behind cages and are patrolled by armed guards 24/7. Remember when we talked about advanced trading options? Kraken has advanced options and features that will make any trader drool.
Digital Wallets
When becoming a member of a cryptocurrency exchange, you won’t notice it but you are immediately assigned a digital wallet. Because your funds are held in their servers, the company acts as a custodian. The implication here is that you don’t have access to your own private keys because they are the ones that hold them. This is why cyberattacks on crypto exchanges are rampant. If you download a crypto exchange for your mobile device, it’s in your best interest if you downloaded a digital wallet to go with it.
Though exchanges have protections in place ranging from being FDIC insured (up to $250,000), utilizing off-site storage for funds, or requiring two-factor authorization (2FA), these measures fall short in protecting accounts from determined hackers. What’s unnerving is that some of the largest and well-known crypto exchanges fell victim to cyberattacks which led to the successful draining of accounts.
When it comes to protecting your crypto assets, it’s a good idea to look into additional layers of security that go beyond the protection that crypto exchanges offer. Hackers target these centralized databases because it’s simply the best return on investment. If access is gained to one server, they’ll potentially have access to millions of accounts. Hot and cold wallets offer protection because private keys are actually yours and aren’t managed by a custodian. This means your private keys aren’t stored on their servers so your digital wallet is less vulnerable to cyberattacks.
Hot Wallets
Hot wallets are a simple yet effective means for protecting your crypto assets because they work by being connected to the internet. Desktop, mobile, and web-based wallets commonly fall in this category and as long as you have internet, you can access your wallet. Convenience is a feature here and exchanges like Coinbase and Kraken provide you with a hot wallet the moment you sign up.
Services like Trust Wallet or MetaMask exist because using the hot wallets in exchanges has issues such as not having ownership of your private keys and your account being exposed to centralized database cyberattacks. Given enough time and effort, any digital account can get hacked. However, storing your private keys in a hot wallet will act as a major deterrent considering the hacker will need to specifically target your account. This is a better option than keeping your private keys in the possession of crypto exchanges. If their servers get hacked, databases go down, or the company decides to quit, your keys will go down with it.
Hot wallets are not only safer than private key storage, but they offer features like staking and allowing you to purchase cryptocurrencies with your credit card. Aside from being able to buy and sell crypto through the wallet, some services feature the ability to swap crypto assets with other users or explore dApps across blockchains.
Cold Wallets
If you want the most secure digital wallet possible, look no further than a cold wallet. Though cold wallets are not crypto apps, we will mention them as alternates to hot wallets. Because cold wallets do not connect to the internet, your private keys cannot be hacked. The only way you’ll fall victim to cybercrime is if you are careless with your passwords to the private keys or your computer or mobile device is somehow infected with malware. Cold wallets are physical devices and they don’t connect to the internet and because of this they typically aren’t feature-rich like hot wallets and storing private keys is pretty much all they do.
Crypto investors with large holdings prefer to use cold wallets because they are inaccessible to hackers digitally. Some will consider this an advantage but critics will complain that the ease of use goes out the window. The Trezor Model T and Ledger Nano X are both leaders in the cold wallet space. To store your private keys safely using these devices, you’ll be required to enter lengthy passwords on the physical device which can be cumbersome every time you want to access your keys. Some of these devices have tiny display screens which can make the experience dreadful.
Storing your passwords away from the cold wallet in a safe location is a must but if you’re prone to lose things easily or frequently, this may become problematic so keep this in mind. There’s more of a burden of responsibility with cold wallet users but if you want the best security, this is the way to go.
Interest-Earning Crypto Apps
We’re often told to put our money into a savings account so it contributes towards building wealth. Banks and lenders will allow you to earn interest on the deposits but these are typically not even worth it. With APYs ranging from 0.05% to 0.50%, it makes you wonder if there’s even a point in parking your money in these accounts especially considering the pace of inflation rates.
Stocks, ETFs, and even bonds are better choices but if you’re looking to diversify your earning potential then parking your money with crypto lenders can be rewarding. APYs typically start at around 2% to 3% on average with crypto lenders so if you’re looking to grow your money, look no further than interest-earning apps. Interest earning apps will typically follow the same formula in their operations. You will lock your crypto holdings for a predetermined period and the company will lend out your assets during this time in exchange for an expected yield.
Celsius
APYs fluctuate throughout the year but you can typically rely on Celsius to have some of the highest in the industry. Celsius is well respected and trusted with APYs averaging 3.9% for cryptocurrencies and 8.9% for stable coins. Even higher APYs are available if you hold CEL, their native coin. As of this writing, 17% APY is available for those that transfer their cryptocurrencies into their app.
BlockFi
BlockFi is another trusted service and is a major player in the interest-earning space. The APYs will fluctuate throughout the year but currently, depending on what plan you choose, you can see up to 9.5%. Additional services are available such as low transaction fees and borrowing funds against your holdings.
Which Crypto App Do I Choose?
As you can see there are plenty of crypto apps to choose from. Focus on the type of crypto app you need then research your options from there. The main types to focus on are crypto exchanges, digital wallets, and interest-earning apps. The features of each service will be highlighted by security, ease of use, crypto options, compatibility, and the specific function of that app (ie. trading, holding assets, earning interest, etc.).
Understand that whenever you are doing anything in crypto, you will be exposed to some level of risk. Most companies will offer security measures such as KYC, AML, or even FDIC insurance but it’s up to you as a crypto enthusiast or investor to research what each crypto app has to offer. Make sure you compare and contrast the differences between companies so you can determine which one is right for you.
This post was written by Ironsung on Fiverr. I hire Fiverr writers to write posts on topics they are proficient in. This helps us all learn more and ultimately make better decisions. I do not make money off of any links in this post, I don’t have any affiliate programs for crypto. Subscribe for more investing posts. Have a lovely day.
Disclaimer
I want to make it unequivocally clear that I do not promote any cryptocurrency, nor do I endorse any crypto investments. This website is dedicated to providing information and insights into the world of cryptocurrencies to help you better understand what crypto is. If you ever find yourself in a position where you need to explain your decision not to invest in cryptocurrencies to friends or acquaintances, you can use the content on this site as a guide to discourage people from falling victim to scams or making hasty financial decisions. My ultimate goal is to empower individuals with knowledge and awareness so that fewer people become financial victims. Life is already challenging with its inherent obstacles; we don’t need the added burden of unscrupulous individuals looking to exploit our hard-earned money. Stay vigilant, stay informed, and make financial decisions with caution. Your financial well-being is of paramount importance, and it is my sincere hope that the information here can assist you in making prudent choices.
