Cryptocurrencies are a fairly new phenomenon that have gained huge popularity and media attention over the last couple of years.
The basic definition of cryptocurrency is a digital or virtual currency that can be traded or used to pay for items. There are hundreds of different cryptocurrencies, but Bitcoin, Ethereum, Ripple, Litecoin and DOGE are the most popular.
There are many potential benefits to using crypto. For one, crypto does not rely on third parties like banks or credit card companies. This makes it easier to transfer funds directly between two parties. This also means no unnecessary fees for account maintenance, minimum balances or overdraft charges, as well as more control over how users can spend their money.
Crypto has faced some criticism in the past due to its volatile nature but is slowly becoming more commonplace. This has been helped along by big companies like PayPal, which have just started letting its US customers buy, sell and hold cryptocurrency.
If you’re interested in buying crypto it’s important that you understand how it works, as well as the risks involved.
Once you’re happy that you’ve done the necessary research, you can start to think about how much money you’d like to set aside for crypto, as well as which exchange to buy on and whether you want to store it on a private wallet.
Cryptocurrency exchanges and crypto wallets are two different things. Before you buy any crypto it’s important that you understand the difference between these two tools.
Crypto Exchange vs Crypto Wallet:
Both crypto wallets and exchanges will let you store your crypto. The main difference between a crypto wallet and an exchange is that you can trade crypto on an exchange, but you only store your digital assets on a wallet.
With an exchange you would therefore buy and sell crypto, trade between different cryptocurrencies and some even allow you to earn interest on your crypto. You can also send your crypto to a private wallet once you buy them on an exchange.
With a crypto wallet you have full custody of your crypto, meaning it can’t be hacked if no one else has your private key. You can then access tokens whenever you like and can store them long-term. You would use a wallet to store your crypto long term because it’s believed that it’s safer than centralised exchanges.
You’re responsible for the use and transfer of funds and you hold all the necessary passwords and private keys. The private key is the only way you can access your crypto, so having complete control over your own private key makes crypto wallets generally safer than crypto exchanges. (That is, unless you lose your own private key! Remember to always store this in a super safe place!)
With crypto exchanges, the company stores this information for you. If the exchange is hacked there’s a possibility that someone else will be able to access your funds and you might lose all your money.
Which Is Best For Me?
If you want full control over your crypto and want to know exactly where your assets are being stored then a crypto wallet might be the best option for you.
If you’re more about buying and selling your digital assets then choose a crypto exchange.
How To Track Crypto in Emma
We’ve recently introduced a whole bunch of new crypto integrations. This means there are now 19 different ways you can connect your crypto to the Emma app.
To get started open the Emma app and click on the Accounts tab. Head to the investments section and press “+ Add Investments”. You’ll then see a long list of the different investment options supported by Emma, including stocks, investment accounts, pensions, crypto wallets, and exchanges.
Once you’ve connected your accounts you’ll then be able to see your crypto balances alongside all your other investments. Adding your crypto balance into Emma also means you can get a true reflection of your net worth, as all this info will be automatically calculated for you.
Here are all the crypto exchanges and wallets currently supported in Emma.
Bitcoin Cash Wallet
There are many reasons why people are interested in cryptocurrency. If you have crypto and you’d like to be able to track this information in Emma then head to the Accounts tab to connect your exchanges and wallets.
Are we missing any crypto integrations? Let us know by dropping us a message on the Emma Community.