How To Identify An Authentic Crypto Trading Platform
How to identify an authentic crypto trading platform
Prior to embarking on your crypto journey, there are several factors/research that you should consider, including the projects behind the coins you intend to invest in and a working knowledge of bitcoin and cryptocurrency. One significant aspect that many people overlook is the platform on which they trade crypto coins.
On the internet, there are numerous locations where you can buy and sell cryptocurrencies. Different terms are used to refer to various platforms, including wallets, exchanges, and hot or cold storage.
A wallet is an online platform that gives you complete control over how your cryptocurrency funds are used and transferred. You are responsible for maintaining all of your wallet's passwords and private keys. As with a physical wallet, you retain complete control over your wallet.
On the other hand, an exchange exists to facilitate the trading of cryptocurrency; it enables users to buy and sell cryptocurrency as well as convert fiat currency to cryptocurrency.
Hot & Cold Storages
A hot wallet is connected to the internet, whereas a cold wallet is not. While hot wallets are generally easier to set up than cold wallets, they are also more prone to security breaches.
When compared to conventional storage devices, hot wallets are comparable to services such as Google Drive, iCloud, or Dropbox, whereas a cold wallet is comparable to an external hard disk drive or a pen drive.
Trust Wallet and Exodus Wallet are two examples of hot wallets. Additionally, cryptocurrency exchanges provide free hot wallets, which are used to store your cryptocurrency on the exchange.
Cold wallets include the Ledger Nano and Trezor.
Why is it important to check the authenticity of a crypto platform
Since cryptocurrencies gained popularity, there have been numerous instances of scams involving phony cryptocurrency exchanges. Numerous people have lost substantial sums of money as a result of these fraudulent exchanges. As a result, it is critical to exercise extreme caution when evaluating the authenticity of a cryptocurrency exchange. You can never be too cautious when determining the authenticity of a platform. Here are some points to consider when deciding on a trading platform.
Know the founders & developers who work on the platform
The people who run a business frequently demonstrate their credibility. Conduct thorough research and delve into the depths. Ascertain that the business has a physical address. Check to see if the company has any employees on LinkedIn. Additionally, choose exchanges that are well-known, have a solid track record, and have earned the trust of cryptocurrency investors.
Do Your Own Research (DYOR)
This is critical because a large number of cryptocurrency scams have occurred in the past utilizing the phishing technique. Phishing is the act of imitating a legitimate website on another domain and spreading it across the internet. Individuals who enter their personal information on these sites have their information stolen and used to defraud the actual platforms of their funds. Phishing websites have improved significantly in recent years, so you must exercise extreme caution.
When you visit a website, check to see if the URL contains "HTTPS" and a padlock symbol indicating that it is secure. Scammers can still obtain the certificates that identify a website as secure, so this should not be the only factor considered. Additionally, you can enter the link manually or conduct a Google search for it. Typically, Google will index the original website within the first few results. Do not click on random links found online! Additionally, choose exchanges that are well-known, have a solid track record, and have earned the trust of cryptocurrency investors. The Bitcoineer site is a good example.
Ensure that the Platform is a Registered Company
Due to the cryptocurrency market's relative youth and lack of regulation, there is a dearth of information about companies online in many countries, particularly in Africa. You are responsible for conducting due diligence. Generally, these exchanges will be registered as businesses, so it may be prudent to check with your country's business registry. Currently, the Securities and Exchange Commission of the majority of countries approves cryptocurrency exchanges/companies (SEC).
Detecting an authentic platform does not have any hard and fast rules; do your researches, keep up with the news, and keep an eye out for wallets that have established a reputation in the crypto community; reputation is the only thing you can rely on.
