A special attacker bot detected the passphrase and within a minute and a half gained access to the wallet and withdrew the funds. And another equally experienced user shared how he lost 1.4 thousand bitcoins in one action. The investor stored funds on the Electrum wallet. He decided to update the application. After the new version was installed, unknown people withdrew all the coins from the wallet.

That’s why storing and using cryptocurrency wallets wisely is one of the main steps for safety in the world of crypto. So that you can maximize the safety of your investments, we have prepared for you the top 5 reliable cryptocurrency wallets!

What is a cryptocurrency wallet?

All tokens and koins circulate in blockchains – distributed registries in which information about transactions is entered. A cryptocurrency is a record in a decentralized database of that the owner of an address has digital assets in an account. The first step in working with tokens and coins is to choose a reliable storage. And the best of them are cryptocurrency wallets.

A cryptocurrency wallet is an application or device that ensures the safety of private keys, user access to the blockchain and the formation of requests for transactions in the network. Each type of cryptocurrency wallet has pros and cons. Some applications and devices provide security, others attract users with a convenient interface, the ability to work with multiple assets. When choosing a device or online service, you need to consider the level of protection, availability and other factors.

Cryptocurrency wallets that we can recommend

LEDGER

Manufacturer of hardware wallets on par with identical brands Trezor, SafePal, KeepKey, CoolWallet, Digital BOX, whose security is beyond competition. Non-custodial storage virtual analog of the Swiss bank in terms of reliability, uses special chips (flash drives), maximally resistant to all kinds of attacks, viruses. To carry out any operation, it is necessary to confirm the action by entering a PIN-code.

Mnemophrase is used to restore access to the electronic safe. The most popular device is the Ledger Nano S series – it supports more than 1000 cryptoassets. The listing is constantly increasing. The only disadvantage is that the hardware wallet must be purchased. However, the security of digital assets is worth it.

Advantages:

• A large number of supported cryptocurrencies;
• Practically full-fledged work on mobile devices;
• Maximum reliability against hacking;
• Possibility to store large amounts.

Disadvantages:

• Working with buttons on the wallet;
• Inability to install the desired number of cryptocurrency applications;
• Confusing Ledger Live interface and support for not all claimed cryptocurrencies in the backend;
• High cost;
• Relatively difficult to acquire.

TRUSTWALLET

The DEX mobile app is the official software of Binance, the largest CEX crypto exchange. Gives a seamless way for users to store, transact, and convert digital assets.

Benefits:

• Security is superior to many systems of leading centralized banking entities. Keys are locally stored in the user’s device;
• Supports over 160,000 cryptoassets on over 50
  Blockchain;
• The e-wallet is integrated with the decentralized trading platform of the Binance crypto exchange, which makes it possible to convert altcoins operating within the BSC (Binance blockchain) ecosystem;
• The possibility of steaking;
• Quality tech support.

Disadvantages:

• No PC version;
• The storage is decentralized, so if you lose access or make a mistake when transferring, you can’t cancel the transaction.

It is impossible to single out one best cryptocurrency wallet. Each option has its pros and cons. When choosing one, you should be guided by your goals.

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Risks of investing in tokens

Investing in tokens can not be called passive income. That is, the investor must conduct a complex and painstaking work to analyze assets and select a project for investment. Only in this case it is possible to buy those tokens that will grow in value and bring profit to the owner. Let’s consider the risks of investing in tokens and ways to level them.

Possible risks of investing in tokens

Risk is an integral part of any investment. Most often the rule of direct proportion applies. The greater the risk of investing, the greater the potential profit. And vice versa, if the risks are minimal, record profits should not be expected either.

An investor can regulate the degree of risk by his own actions. But let’s consider the main mistakes of beginners, which increase the risks. And we will also immediately consider what actions can reduce the risk of losing money.

Lack of analysis of the project before investing. You can not invest money, focusing only on the advice of “experts” or other parameters. You should always analyze the tokens yourself. Moreover, you need to analyze the general situation in the cryptocurrency market. After all, the token rate correlates with the value of crypto. Therefore, with the general decline, investing in new projects should be very cautious.

Emotionalism and stress when investing. One of the “enemies” of a token investor is emotions when making buying and selling decisions. When investing, beginners often get rid of the asset too early, when the rate still retains the potential for growth. Or they “over-hold” the coins. That is, after the initial price growth, there is usually a correction and they do not have time to fix the profit at the peak.

Ignoring the prerequisites for the trend reversal. This risk is related to the previous one. Often investors, observing the initial growth of tokens, “forget” about them and keep them on the wallet, hoping for a further increase in price. However, it is necessary to monitor charts and apply technical analysis tools all the time. Then you can notice an emerging trend and avoid losing money when the rate reverses.

Additional risks

One of the main dangers for a novice investor is a negligent attitude towards investments. Cryptocurrency does provide an opportunity to earn. But doing so is not as easy as it seems at first glance. Study the information from the Blockchain Encyclopedia on the site to reduce possible risks and increase the effectiveness of investments.

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A Bitcoin derivative, on the other hand, can allow people to trade contracts that follow the price of Bitcoin without having to actually own any Bitcoin.

What are bitcoin futures?

As described above – it is simply a contract or agreement between two parties to buy and sell BTC at a given price at a specific date in the future (hence the name).

However, neither party is required to actually own the underlying asset, in this case bitcoin. Instead, they simply settle the contract in US dollars or using stablecoins such as USDT. What distinguishes futures contracts from other derivatives is the specific settlement date.

How to invest in bitcoin futures?

Let’s look at an example of someone trading bitcoin futures. One of the first things a trader will have to decide on is the length of the contract. Exchanges offer several options such as weekly, bi-weekly, quarterly, etc. Let’s say you want to trade weekly BTC contracts and each contract is worth $1 when the price is 1 BTC = $50,000. This means that you will need 50,000 contracts to open a position worth 1 BTC. At this point, a trader can open a long position (betting on the price going up) or a short position (betting on the price going down). Whichever direction you choose, when you open a position, the exchange will essentially match you with someone going in the opposite direction. A week later, when the contracts are due to settle, one of the traders will have to pay the other.
If you decide to take a short position and a week later the price has fallen, you will make a profit. If the price went up, you will incur a loss.

What are bitcoin options?

Bitcoin options are also derivative contracts that follow the price of bitcoins, except that they don’t necessarily settle on their expiration date. The reason they are called options is because they give traders the ability or right to buy or sell at predetermined prices at certain dates in the future.

What are open-ended swaps / cryptocurrency contracts?

Perpetual bitcoin contracts are derivatives that, unlike futures or options, have no expiration or settlement date. Traders can keep their positions open as long as they want under certain conditions. One of them is that there must be a minimum amount of BTC ( margin ) in the account. Another important factor to consider is the funding amount. This is a unique mechanism that helps to tie the price of the perpetual contract to the price of Bitcoin.

Due to time constraints, the price of a futures contract will always be the same as the price of the underlying asset at the time of expiration. Since perpetual contracts do not expire, their prices can begin to deviate significantly from Bitcoin prices. The solution to this problem is for one side of traders to pay the opposite side.

Conclusions

Cryptocurrency trading offers several growth prospects for a good trader. The trick is to develop a strategy before starting crypto derivatives. A trader must analyze and understand the risks associated with derivatives trading before starting a trade. One thing is for sure, the cryptocurrency derivatives market is not where beginners should start.

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With the crypto market stabilizing and growing rapidly, more investors from traditional financial markets may enter the crypto derivatives market. Exchanges with robust trading systems, high security standards and word of mouth can dominate the crypto derivatives market.

Bitget as a leader on the crypto derivatives platform

Launched in 2018, Bitget is now the dominant platform for cryptocurrency derivatives trading with many innovative products including bitcoin and other futures contracts. Our efforts have resulted in a huge customer base of 2 million users from 40 countries. In terms of scale, Bitget is truly the world’s largest digital copy trading exchange, with over 55,000 professional traders accumulating total revenue of $300 million and their 1.1 million subscribers accumulating over $350 million. Bitget is the largest cryptocurrency trading platform and is recognized by TokenInsight as the 3rd best crypto derivatives exchange in terms of liquidity.

Responsible use of leverage

Bitget users can conveniently maximize their profits with leverage. More volatile assets will have lower leverage levels to reduce traders’ exposure to extreme price fluctuations.

At the same time, we strictly require users to comply with our margin requirements and have introduced risk margins to help users better withstand liquidation risks.

Real-time basis

Another unique feature of Bitget is that profits and losses are calculated in real-time, which is our guarantee of a sophisticated and accurate data system. Traders will be able to manage their account according to the market, constantly improving their trading knowledge and skills.

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Today, utility tokens and tokenized securities are million-dollar concepts that startups around the world use in the crowdfunding process. But what do these terms mean? What is the difference between a utility token and a security token? Let’s take a closer look at these two concepts.

What is a token?

A token is a utility or asset issued by an enterprise. Often tokens are issued when a company launches an initial coin offering (ICO), which works almost like an initial public offering (IPO).

The difference between an ICO and an IPO is that in an IPO, users receive shares in exchange for the investment they make, while in an ICO they receive a token in exchange for their investment. There are two main types of tokens that can be found in the ICO space:

• Utility tokens (Utilitarian or utility tokens);
• Security tokens (Investment tokens or security tokens).

There is often confusion in determining the differences between security tokens and utility tokens. We will try to break down the difference between these two terms.

Utility Token

Utility or utility tokens are application coins or user tokens. They provide future access to products or services offered by a company. Hence, utility tokens are not created for investment.

Just as an electronics dealer can take orders for a video game that will be released in a few months, a project can create service tokens and sell digital coupons for services or products while they are still in development.

A good example is Filecoin, which raised $257 million dollars through token sales. These will allow users to access its decentralized cloud storage platform. Another example is also ERC20 in the Ethereum ecosystem.

Security Token

Security tokens are a digital asset whose value is determined by an externally traded asset. Consequently, these tokens are subject to federal laws and securities regulations. Failure to comply with these regulations can lead to serious consequences, including fines and potential disruption of project development.

On the other hand, security tokens can offer a wide range of applications if the project complies with all regulatory requirements. The most promising of these features is the ability to offer tokens as a digital representation of a company’s stock.

For example, Overstock recently announced that tZERO, one of its portfolio companies, will hold an ICO to fund the creation of a licensed security token trading platform. The tZERO tokens will be issued in accordance with SEC rules.

Key differences

The key difference between security tokens and utility tokens is the intended use and functionality. Security tokens are created as investments. Holders are paid dividends in the form of additional coins each time the token company makes a profit in the market.

Users who hold a security token also gain ownership of the company. Blockchain offers a platform that can be used to create a voting system. It allows investors to control the decision-making process of the company.

On the other hand, service tokens are not designed for their holders to control decision-making in a company. They simply allow users to interact with the company’s services. Both securities and service tokens can increase in value if the market rates rise.

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What is a token

In simple terms, a token is a digital certificate that guarantees the obligations of a company to its owner, analogous to shares on the stock exchange in the world of cryptocurrencies.

In the virtual world, a token is a digital conditional unit, the value of which is expressed in some asset. It is synchronized with a database built on blockchain technology, where all tokens are counted. Virtual tokens can be accessed only with an electronic signature and through a corresponding application.

Classification of tokens

Of course, there is no single classification at the moment, but to date tokens can be divided into the following types:

• Security tokens (investment tokens) – created to simplify the work of investors and are essentially shares of a company. They certify the right of ownership and give the opportunity to receive dividends;
• Utility tokens (service tokens) – designed to create virtual currency within a business, company, or any platform. Usually, utility tokens express points received for the fulfillment of company shares, they also include game currencies, etc;
• Asset-backed tokens (commodity tokens) are tokens backed by real-life liquid assets. These can be goods and services, as well as oil and gold. The company issuing commodity tokens is obliged to pay the owner the value of the token or send goods in exchange for tokens.

One of the common mistakes of novice crypto investors is buying tokens without taking into account the fact that a project can issue different types of tokens, both investment and utility tokens. Such variability can complicate an investment decision and eventually even make it unfavorable for the investor.

What can a token be backed by?

The only type of coin that can be backed by real value in currency or any commodity is a commodity token. When it is issued, a company equates the value of some service or commodity to a digital unit. For example, the owner of one commodity token can exchange it for a year’s fitness club membership. The guarantor in this situation is the company that created the personal token. It is she who is responsible for the legal purity of transactions.

Tokenization of assets

Tokenization is the transformation of an asset into a digital unit. Simply put, this process is the transformation of a real-world asset into a digital asset in the form of one conditional unit, the information about which is stored in the blockchain. This transformation allows the token owner to interact with real-world assets much more securely and quickly.

Pros and cons of tokenization

Tokenization has its own advantages:

• Improved and faster trading exchange;
• Secure coin storage and transfers between owners;
• Ability to trade without guarantors or intermediaries, as all transfers are regulated through smart contracts;
• Empowerment of infrastructure and trade exchange in general;
• Significant simplification of work with sellers of goods or services by integrating the system into special mobile applications.
• Increased database security, which is possible due to thorough verification of incoming information;
• High-speed processing of transactions due to a large number of independent servers;
• Creation of secure auditing.

Nevertheless, despite all the above advantages, tokenization can become a problem. There are the following reasons for this:

• There is a risk of loss or theft of user identities due to cyberattacks;
• Ensuring data anonymity in a public blockchain is a nearly impossible task;
• It is difficult to expand the system in decentralized coin operations due to transaction limits.

What is the difference between tokens and cryptocurrency?

As you know, cryptocurrency is managed in a decentralized manner. Simply put, a certain algorithm is responsible for the functioning of coins, which cannot be regulated. Tokens, unlike cryptocurrency, can be both decentralized currency and centralized. In the latter case, a single company, which is its creator, is responsible for managing the coin. In the same organization, all transactions take place, transactions are carried out and all information related to the accounting of coins is processed.

The price of a digital unit may depend on the balance of supply and demand, as well as on the rules of issue and other factors. It is also worth noting the fact that tokens are not backed by a unique blockchain, unlike cryptocurrencies.

Is it worth making your own token?

Whether or not to convert your product into a token can be a serious question for a manufacturer. Whatever the advantages, you should also think about the possible consequences.

But connecting crypto payment acceptance to an online store will definitely help attract progressive customers who are ready to pay for your goods with cryptocurrency. For any questions related to the connection of our cryptoprocessing, you can contact our support!

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