5 Tips for Beginners Who Want to Mine Cryptocurrency or Trade Cryptocurrency on Binance
There are many benefits to trading and mining cryptocurrency; however, it also comes with its own challenges. In this post, I’ll give you five tips that will help you begin your cryptocurrency trading journey on Binance and even help you avoid some mistakes that newbies often make when they first start to mine or trade cryptocurrencies such as Bitcoin, Ethereum, Litecoin and others.
1) Learn about Cryptocurrencies
A cryptocurrency is a form of digital currency that doesn’t have any physical boundaries like a bank. Instead, it lives in an online wallet attached to your PC and isn’t backed by anything but people’s trust in it. This makes crypto coins extremely volatile—but also potentially profitable if you know what you’re doing. Before learning how to trade cryptocurrency, research multiple coins that might be worth investing in and familiarize yourself with coin market caps (where cryptocurrencies are listed). If you invest without learning about crypto first, there’s a good chance your financial future could get pretty bleak pretty quickly.
2) Determine What is the Best Coin to Mine
When it comes to mining cryptocurrency, people are generally looking for a few key metrics: market capitalization, volume, scarcity and price stability. To determine what coin is best suited for you, you should ask yourself these four questions: 1) How much money do I have? 2) How fast do I want my ROI (return on investment)? 3) Do I want a coin that has high volatility (meaning it will rise and fall quickly), moderate volatility (less risk of large gains and losses), or low volatility (will go up steadily over time)? 4) How long do I plan to hold onto my coin(s)? Depending on your answers, your strategy will vary.
3) Set Up Mining Pool
Before you mine any cryptocurrency, you'll need a crypto wallet, which is a digital location to store your cryptocurrency. For many cryptocurrencies like Bitcoin and Ethereum, you can use an online wallet that exists in cyberspace; others require a specialized hardware device called an ASIC (application-specific integrated circuit) miner. While some wallets are free, others charge transaction fees; therefore it's important to do your research before deciding where to host your wallet. Once your mining pool is set up, mining begins.
4) Choose a Wallet that Fits your Needs
If you’re planning to hold onto cryptocurrency for a long time, and especially if you intend on trading it often, then you will likely want to keep it safe in a digital wallet. There are many different kinds of crypto wallets out there, each offering its own unique balance between security and usability. You will want to find one that fits your needs and expectations while also taking your personal level of caution into account. For example, a hardware wallet such as Ledger Nano S may be more secure than something like MyEtherWallet but less convenient since it is an offline storage device—if you lose it, you’ve lost access to your funds permanently.
5) Decide whether you want to Buy, Sell, or Trade Coins
If you want to mine cryptocurrency and sell them, then you're going to need a mining rig. If you're only planning on trading coins, then a regular PC will do. Make sure your machine is up-to-date and secure, especially if you plan on storing any coins locally. You don't want to get hacked! You'll also need a crypto wallet in order to hold your coins (be careful with exchanges!) While everyone has their own preferences when it comes to managing wallets, make sure that they're encrypted and not just saved somewhere easily accessible such as Google Drive or Dropbox. Remember: don't leave money on an exchange! Invest it in buying more cryptocurrencies; they'll be much safer there than in an online bank account (i.e., not Coinbase!).