How to start in the cryptocurrency world

What are crypto assets?

Cryptocurrencies, also known as crypto assets, are digital assets whose system and operation are secured by cryptography. Their purpose is to be a means to exchange a value alternative to traditional money, and many proponents believe that these digital assets are the next step in the evolution of the financial industry as we know it.

Although the desire to have a monetary system with better data transference competence dates back to the origin of Internet, it was only until the release of Bitcoin whitepaper and the arrival of this digital asset that the crypto asset era started, which opened the door to the rise of every project we know today and to the settlement of this emerging industry.

Crypto assets run on a network based on distributed ledger technology (DLT), which can be a blockchain. On that basis, these digital assets are built on a system that is distributed among a large number of computers, out of the reach of the control from a centralized or government entity. It is important to note that not every crypto asset project has the same decentralization degree or the same characteristics in terms of design and approach and, in case you care about this aspect, it is good to learn more about the digital asset you find interesting.

Where are crypto assets stored?

As digital assets located in a distributed digital environment, there is not any physical place to store crypto assets, similarly there is no information about them in files or folders. The information about the funds belonging to everyone is available all along the distributed network of each crypto asset, ad it is a set of keys (a private key and a public key) that allows the access to our funds, operations with them and transference reception. Through a digital wallet we can safeguard these keys associated with our crypto assets, but our digital assets are not really stored there.

The private key:

This key gives you access to your funds in crypto assets, certifying that they belong to you and allowing you to operate with them. It is vital to keep this key in a proper way, just as we keep our bank credentials confidential.

The public key:

The public key allows you to receive funds in crypto assets, this is related to your private key. While the public key is the address used to receive funds in crypto assets sent by other users, the private key allows you to have access to them. Your public key is the code that you need to share with other users and platforms to receive transfers of digital assets.

What are digital Wallets?

A digital Wallet is a device, physical means, program or service aiming to safeguard your public and/or private keys of crypto assets. There are plenty of options in the industry to choose, each one has different features or characteristics according to its type, which can be taken as pros or cons depending on the needs of every user. Wallets can be divided into two basic types: custodial and non-custodial.

Non-custodial wallets:

In a non-custodial wallet you have full control of your funds, because you keep your public key as well as your private key through it. Accordingly, the safety of your keys, and therefore your funds, depend completely on you and your previsions.

Custodial wallets:

In a custodial wallet the enterprise responsible for the service has access to the private key. In this sense, you as a user trust this enterprise for the safeguard of your digital assets and you can use them through their platform.

Many users believe that non-custodial wallets are a “safer” alternative to keep digital assets, but this safety rests on the kind of user, as many people are more comfortable relying upon a third party due to the fear of missing the private key and consequently the access to their crypto assets. The type of wallet depends largely on our needs, and it is advisable to consider several alternatives before choosing one.

Although we do not provide endorsement or sponsorship to any wallet and we are not affiliated to any in particular, a list of some available wallets in the market is listed below, in order to offer our users a starting point to search about several solutions before entering the cryptocurrency space.

- Bitcoin.com Wallet: Non-custodial Wallet for BTC and BCH.

- Coinbase Wallet: Non-custodial Wallet for BTC, BCH, LTC, ETH, DAI and other assets.

- Coinomi: Non-custodial Wallet for BTC, BCH, LTC, ETH, DAI and other assets.

- Electrum: Non-custodial Wallet for BTC.

- Exodus: Non-custodial Wallet for BTC, BCH, LTC, ETH, DAI and other assets.

- Ledger: Manufacturer of physical wallets with support for BTC, BCH, LTC, ETH, DAI and other assets.

- Trezor: Manufacturer of physical wallets with support for BTC, BCH, LTC, ETH, DAI and other assets.

- Xpay: Custodial wallet for BCH, BCH, DAI, DASH and ZEN.

Disclaimer: We reiterate that the previously mentioned are intended to inform and educate, they do not represent an endorsement, support or sponsorship for any product, service or company. Our readers and users should investigate and take their own decisions before taking any action related with the companies mentioned or any of their affiliates or services. Panda Exchange is not responsible for any loss or damage derived from the use of the products aforementioned, nor offers support to solve drawbacks caused by them.

How can I send or receive crypto assets?

Although it depends on your wallet’s interface, sending or receiving crypto assets in general follow the same principle. The user that wants to receive crypto assets must share the public key with the sender (some wallets allow a QR code to share it). Usually wallets have a recognizable section where users need to access in order to send funds to another person, there it is possible to scan the QR code linked to the public key of the receiver or to manually enter it, once this operation is made it needs to be confirmed by the sender.

The confirmation times for a digital asset transmission depend on the crypto asset used, as well as on the congestion of the network at that time. It is common for the crypto assets to charge a small fee for operations, which aims to support the network operation and, similarly, it varies according to its status.

How can I buy or trade crypto assets?

From ATMs, person-to-person markets and trading platforms such as Panda Exchange, there are different alternatives intended to satisfy the need to trade a digital asset for another, as well as a digital asset for a local currency. Each service has features that can be considered as pros or cons according to the user’s needs.

For its part, Panda Exchange offers you the options to trade crypto assets for local currency in markets specialized for countries such as Colombia, It also allows you to trade a crypto asset for another from anywhere in the world. Our friendly interface enables operations in an intuitive way and our support team is willing to help you in case you have any doubt. In our support section you can also learn in more detail about Trade Operations through Panda Exchange.

Legal status of Crypto assets

Due to the newness of crypto assets as technology and the evolving environment where they operate, a proper legislation and regulation of digital assets and the industry related represent a challenge for many regulatory entities throughout the world.

In many cases, there is not any legal framework to comprehend all crypto assets, however, every day the authorities are more and more interested in this environment. In many countries the new digital assets are in a “gray area”, as they are not classified either as “illegal” or as “currency” by the main financial institutions.

As time goes by, the regulatory entities understand more and more about crypto assets and its industry, and there is more cooperation between members of the community and government agencies in order to establish a legal framework to allow the healthy development of the industry without affecting its growth.

In the case of Colombia, it is a fact that it is being created by proponents and specialists in crypto assets such as the members of Fundación Blockchain Colombia, who are trying to develop a legal framework to foster the growth of this area in the region.

It is important to note that despite the “gray” status when it comes to regulation about crypto assets, the tax obligations that may have these operations must be taken into account according to the country of residence, similarly, it is advisable to investigate and search for assessment about the local legal status of crypto assets.

More information

If you wish to learn more about cryptocurrencies, their underlying technology or the operation of our platform, we invite you to visit our Blog on Medium, where you can find articles of interest ,on a regular basis, that can be useful to understand more about crypto assets.