Where are cryptocurrencies stored ?

Where are the cryptocoins saved?

Before buying and selling cryptocoins, it must be clear where we are going to store our money. As if they were bank accounts, there are many online applications, software and even hardware to save our money. They are wallets.

  • Coinbase, the online solution

Coinbase is one of the most used platforms to buy and sell cryptocurrencies and also serves to store them. It’s online, and it’s effortless to use, hence its popularity. However, some experts criticise its security, since the user identifier (a long string of numbers and letters that works as an address in the blockchain system) is stored in its servers.

  • StrongCoin, halfway

It has a large community of followers and is one of the oldest services. It is entirely online, like Coinbase, although your keys and identifiers have an extra encryption layer before they go to the StrongCoin servers.

  • LedgerNano, the hardware solution

There are several possibilities in hardware format. LedgerNano is the best-selling wallet on Amazon, but there are others like LedgerBlue or KeepKey. As if it were a pen drive, all the information is stored in this small hardware, which makes it, for many, the safest solution in the market.

Buy and sell safely: Exchanges

Well, you have already decided that you want to own cryptocoins, and you already know where to store them. Now, how do you buy and sell cryptocurrencies safely? Cryptocurrency purchase and sale services, known as exchanges, are websites where you can exchange one currency for another. That is, buy Bitcoins with euros or sell your Ethereum and enter dollars, among other options.

Before choosing one it is convenient to look at several factors:

  • The reputation of the service and its security.
  • Payment methods accepted (cards, transfer, PayPal …)
  • Prices. Depending on the platform and the method of payment used, the prices charged per transaction vary considerably.
  • The exchange rates. Like any coin buying and selling company, a percentage is carried in the change that varies a lot from service to service.
  • Geographic restrictions Most services operate worldwide, but it is essential to ensure that there are no restrictions.

The best exchange houses are:

  1. Coinbase
  2. Bittrex
  3. Bitstamp
  4. Xapo
  5. Kraken

Buy cryptocurrencies or bitcoins in a house of exchange

Within the exchange houses, we must differentiate between those in which bitcoins or other cryptocurrencies can be exchanged for euros or dollars and the exchange houses in which the ‘currency’ of reference is bitcoin. In this last case, you have to own bitcoins to be able to exchange them for the other cryptocurrencies.

All the formal exchange houses that offer the exchange of a cryptocurrency for legal tender money (i.e. dollars, euros, etc.) operate with a customer identification procedure (known as Know Your Customer). That system obligates new users to identify themselves with a series of documents and processes to comply with the legal provisions related to the prevention of money laundering (AML).

Opening an account in an Exchange is the closest thing to opening a bank account, even if they are not banks, and can sometimes be frustrating due to the administrative processes imposed on operating with large volumes of purchase and sale. For the vast majority of customers, it is not usually a problem because they circumscribe their operations to small amounts.