Homework Assignment, Week 2: How To Set Up A Coin Trading Account In A Cryptocurrency Exchange Platform
Welcome back to Crypto-Academy’s homework revue. This week we explore how to begin your adventure in cryptocurrency ownership. Here’s the assignment from @besticofinder for week two:
• Topic 2 : How to setup a trading account in a Cryptocurrency Exchange
Some people HODL crypto for purchases of goods, services or digital products, others for speculation or wealth accumulation. Regardless of your belief of its direction, up, down, or sideways, there are methods some investors (some say speculators) will profit from ownership of (or the disposing of before even purchasing!) these alternative investment vehicles.
Let’s start by setting up an account at an exchange. This is the “stock market trading floor” of the crypto world. One must open an account and deposit funds of some sort, either fiat currency or crypto, before one may trade.
Certain exchanges will facilitate the “sharing the wealth” of select currencies with contests, usually quizzes, which provide a small amount of crypto in exchange for correctly responding to questions about the content of videos shown. These may generally be traded upon their being awarded, so one may in essence, learn the basics of how to trade using the “house’s money”.
Many of the exchanges will want you to provide proof of your identity and citizenship prior to establishing an account for you. They reserve the right to ask other questions in order to verify that the account they are about to open is for a genuine person who is a citizen of a country which is approved by them to own, trade in or sell assets. This process is called “KYC” or “know your customer”.
Next, in order to buy or sell currency, one must deposit funds into the recently opened account. This is done via bank transfer, debit or credit card transfer or wire transfer if in fiat currency, or directly from one’s wallet if one wishes to fund the account with crypto one currently possesses.
Voila! Now you are a trader. Proceed to buy and convert crypto into other crypto at your discretion. Note: save selling fees with some exchanges by converting from all your crypto to one currency before sale as each different type of crypto will have a sales fee attached. Be aware that there could be some loss of principal as the trades are subject to slippage during their execution and conversion. Now on to the realization of your newly-minted profits!
You have just traded BTC for X value, and it’s up to 2X. Celebrate! Maybe hold some in reserve for a rainy day, but take a bit out to celebrate. The ones in the know often will take their original stake off the trading table to preserve their nest egg and only risk their earnings in further investments, aka “playing with the house’s money”).
One may withdraw their funds in the currency or crypto choices available, and directly to their bank account or wallet of their choosing. This is typically a simple process with minor variations from exchange to exchange, but one must prove that they are the owners of the account prior to the release of their funds if they were not required to upon opening their account.
Congratulations! You have learned how to open an account, fund it, trade or convert your currency to other currencies and then withdraw them as you see fit.
I hope this has been a helpful primer on how to open your account and begin your crypto ownership and investment adventure.
Alternatively yours,
A
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“Homework task…
• Create a simple beginners guide for any leading cryptocurrency exchange explaining how to complete registering, verification, depositing funds, withdrawing funds etc.”