Before starting your crypto journey, there are different aspects/ research you have to look out for, including the projects behind the coins you are investing in, and a basic understanding of bitcoin and cryptocurrency. One major aspect people tend to ignore is the platform where they trade crypto coins.
There are different places where you can buy and sell cryptocurrencies on the internet. There are different terms used to describe different platforms such as a wallet, exchanges, hot or cold storage.
A wallet is an online platform where you are in full control of the use and transfer of your crypto funds. You maintain all the necessary passwords and private keys of your wallet. Just like a physical wallet, you have full control of your wallet
An Exchange on the other hand is there to help people conveniently trade cryptocurrency, with it you can buy and sell cryptocurrency, convert fiat currency into cryptocurrency.
Hot & Cold Storages
A hot wallet is one that is connected to the internet while a cold wallet is one that is not. Generally, hot wallets are easier to set up than cold wallets but they are also more prone to security breaches than cold wallets.
Comparing this with storage devices as we know them, hot wallets can be likened to services like Google Drive, iCloud or Dropbox while a cold wallet can be likened to an external hard disk drive or a pen drive.
Examples of Hot wallets include Trust Wallet and Exodus Wallet. Cryptocurrency exchanges also come with free hot wallets which is where your cryptocurrency on the exchange are stored.
Examples of cold wallets include Ledger Nano and Trezor
Why is it important to check the authenticity of a crypto platform
Since cryptocurrencies started gaining traction, there have been several cases of scams relating to fake cryptocurrency exchanges. These fake exchanges have resulted in lots of people losing large sums of money. Therefore, being very cautious about a cryptocurrency exchange’s authenticity is very important. You can never be too careful when assessing how genuine a platform is. Here are some tips to look out for when you are considering what platform to trade on.
Know the founders & developers who work on the platform
The people manning a company most often shows how credible they are. Do your research, dig deep. Make sure the company has an address. Check if there are employees on LinkedIn. Also, go with exchanges that are popular, have a great track record and have built trust with cryptocurrency investors.
Do Your Own Research (DYOR)
This is very important because many cryptocurrency scams that have occurred in the past have used the phishing technique. Phishing is where a legitimate website is imitated on another domain and shared across the internet. People who enter their personal information on these sites then have their information stolen and used to steal their funds from the actual platforms. Phishing websites have gotten really good in recent times so you have to be very vigilant.
Image: a sample of some phished trying to imitate an authentic platform: Roqqu.com
The image above is a phishing website that is trying to imitate Binance. Notice that they have “HTTPS” alright but the spelling of “n” character in the spelling of Binance is not the English/Latin alphabet “n”. This is an alphabet in the Vietnamese language which makes it totally different from the Binance website.
When you visit a website, make sure it contains “HTTPS” in the URL and a padlock symbol that indicates that it is secure. Scammers are still able to obtain the certificates that mark the website as secure so that should not be the only thing you look at. You can also enter the link yourself or search it in Google. Google will normally index the original website in the first few results. Do not follow random links online!
Ensure that the Platform is a Registered Company
Due to the fact that the cryptocurrency market is fairly new and not very regulated, there is not great information about companies online in many countries, especially in African countries. The onus is on you to do the due diligence. Most of the time, these exchanges will be registered as companies so it may be useful to check with the registrar of businesses in your country. In most countries currently, cryptocurrency exchanges/companies are approved by the country’s Securities and Exchange Commission(SEC).
Detecting an authentic platform actually doesn't have any clear cut rules, do your research, follow news and look out for wallets that have built a reputation among the crypto community and track record is the only thing you can actually bank on.
Roqqu is the largest local exchange in Nigeria, making it the number 1 crypto trading wallet for people to buy and sell cryptocurrency in West Africa. The system is robust enough to accommodate more coins and perform more functions such as coin swapping, coin sending & receiving.
That is why Roqqu is trusted by over 803,000+ users actively processing over 1,719,960+ transactions monthly. Our app has been rated the simplest platform to buy and sell cryptocurrency in West Africa. Our users love our app, because we have made it simple and seamless to buy, sell, transfer and receive over 33 coins & tokens. If you are starting your crypto journey we totally recommend you start your crypto journey with us. Click here to start trading.