Which cryptocurrency should I buy?
There are so many cryptocurrencies, that it can be hard to determine which currency has a future. This is the hardest part of trading in cryptocurrency and it can be quite overwhelming. Our first advice is to read – a LOT – about currencies in order to determine whether it’s a good investment or not, and if so, if it would be a long term or short term investment. The largest sources of information surrounding cryptocurrency are found on forums, Reddit, Telegram (a messaging app for smartphones) and Twitter. In the end, you’ll have to select and even find sources on your own, depending on what type of information you’re interested in.
Below is a selection of sources below so start you off.
How do I buy cryptocurrency?
As mentioned on the ‘trading cryptocurrency’ page, cryptocurrencies can be bought through brokers and exchanges. Brokers are more expensive, but they’re faster and more user friendly. Exchanges are cheaper but often require verification, and after making a deposit it can take up to three days before the amount appears on your account.
If you have an interest in trading or buying regularly, then we’d advise to do this through an exchange.
On our page with links you can find several brokers and exchanges.
Which wallet should I use?
For nearly every cryptocurrency, you can find several wallets. Which should you use?
It’s very much advised to download a wallet from the official site of the cryptocurrency you want to hold. For some, cryptocurrencies, like Ethereum, you’re only allowed to download a wallet from its official website that automatically loads the entire blockchain. If you don’t want (which is understandable since it takes up quite some time), you might find the Jaxx wallet a good alternative. The Jaxx wallet can be used for a number of different currencies.
Remember to safely store your private key (seed), after installing your wallet. This is the key to your wallet, might some mishap occur.
Where do I store my cryptocurrency?
When you’ve bought cryptocurrency, it’s best kept in a wallet that you own and control. We would advise against storing your currencies on an exchange or leaving them with a broker. Nearly every cryptocurrency developer offers an official wallet. Using a third party wallet is an extra and unnecessary risk, as history shows that some developers cannot be trusted. So make sure to research the wallet you want to use.
A wallet can be an app on your PC or phone, or it can either be a paper of hardware wallet. No matter what the case might be: store your private key safely and secure. This key offers you access to your cryptocurrency on the blockchain. If (for example) your PC crashes and you can’t reach your wallet, you can install it on another location by using your private key.
Taxes and cryptocurrency
Do I pay taxes on cryptocurrency?
Whether you have to pay taxes on cryptocurrency, differs per country, but in most countries you do. In the USA cryptocurrencies are treated as ‘capital gains’ (like gold), and not a regular currency like the dollar. But trading cryptocurrency to fiat currency is a taxable event. In the UK, you usually only pay taxes on the profits that you make, but this differs based on the amount. Visit the official website of your national tax service or give them a call to find out what your situation is.
Chances are you’ll have to report your cryptocurrency and pay some amount of taxes on it. It’s advisable to do this as stated by the law. If you fail to report it, make a large profit, and then transfer your cryptocurrency to fiat money, it’s likely the tax administration will ask you where your money came from.
How many taxes do I pay on cryptocurrency?
This differs per country. To determine how much you have to pay, you have to find out how cryptocurrencies are taxed in your country. Since cryptocurrency still is a very new concept to most governments, the taxation differs greatly. Ask a financial advisor to ensure your assets are correctly taxed.
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