How to Invest in Crypto? Different Investing Strategies

ICO vs <a href=https://www.bitdegree.org/"https://www.bitdegree.org/crypto/learn/crypto-terms/what-is-initial-dex-offering-ido/">IDO vs <a href=https://www.bitdegree.org/"https://www.bitdegree.org/crypto/learn/crypto-terms/what-is-initial-exchange-offering-ieo/">IEO!

For a beginner, they all mean the same thing - <em>confusion</em>. What do these abbreviations even stand for? In my the previous sections, I’ve covered various DeFi elements, such as <a href=https://www.bitdegree.org/"https://www.bitdegree.org/crypto/learn/what-is-blockchain/">blockchains, <a href=https://www.bitdegree.org/"https://www.bitdegree.org/crypto/learn/what-are-dapps-in-crypto/">dApps, and <a href=https://www.bitdegree.org/"https://www.bitdegree.org/crypto/learn/how-do-cryptocurrency-exchanges-work/">cryptocurrency exchanges</strong></a>. Today, I shall concentrate on how many of these companies and projects got their start. In many cases, it was thanks to an ICO, IEO, or IDO!</p>\n<p>As you’ll see, <strong>these processes provide different benefits, just as they all have their own, unique drawbacks</strong>. They’re a cause for debate, since there’s no right answer about which one is the best way of conducting the initial stages of raising capital and starting a DeFi project.</p>\n<p>In this section, we’re going to define and discuss ICO vs IDO vs IEO. Specifically, we’ll talk about what every one of these terms mean, what’s their purpose, when and why were they created, and what’s their role in the overall bigger picture of the <a href=https://www.bitdegree.org/"https://www.bitdegree.org/crypto/learn/crypto-terms/what-is-defi/">DeFi world.</p>\n<p><em>Let’s jump straight to it!</em></p>\n<h2>What is ICO?</h2>\n<p>Let’s begin by answering, <em>“what is ICO?”.</em> Well, for starters, <strong>ICO abbreviates as an “Initial Coin Offering”</strong>.</p>\n<p><img style=\"display: block; margin-left: auto; margin-right: auto;\" title=\"ICO vs IDO: Initial Coin Offering.\" src=https://www.bitdegree.org/"https://assets.bitdegree.org/crypto/storage/optimized/ICO-vs-IDO-01.jpg/" alt=\"ICO vs IDO: Initial Coin Offering.\" width=\"1000\" height=\"583\" /></p>\n<p>In order to understand its role, consider this example - it will give you more than a dry theoretical definition of this term:</p>\n<p>It’s 2014. And this is Mark. He’s only 19 years old, but he’s a brilliant, promising guy who has revolutionary ideas brewing up in his mind. He’s been eyeing the crypto world closely, he sees the potential that <a href=https://www.bitdegree.org/"https://www.bitdegree.org/crypto/buy-bitcoin-btc/">Bitcoin has, and how important the blockchain impact on the world might be.</p>\n<p><strong>Mark understands that Bitcoin offers a radical new approach towards money</strong>, and how the international monetary system should look like. It’s a game-changing innovation that introduces decentralized payments, and aims to give people back their power over their money and information.</p>\n<p>Mark is a smart fellow. He realizes that Bitcoin’s core decentralized architecture, the blockchain technology, could become a very powerful tool that could be put to use to make the whole world a better place. From financial apps, to gaming, or data storing - it could be used to transform the world as we know it.</p>\n<p>Okay, so Mark comes up with an idea. Now, in order to make it happen, he needs a strong team, and… money. <em>Lots of money. </em>Where does he get it from? <em>Fundraising.</em> But, it’s crypto we’re talking about here. <strong>So, Mark goes and organizes an ICO, an Initial Coin Offering, with hopes that it will attract investors. </strong>Everything goes according to plan, and Mark ends up with a newly-raised $18 million.</p>\n<p>In case this sounds very familiar… This story did indeed happen, and everything here is true. Except for the fact that Mark’s real name isn’t Mark. It’s <a href=https://www.bitdegree.org/"https://www.bitdegree.org/crypto/learn/crypto-terms/who-is-vitalik-buterin/">Vitalik Buterin</strong></a>, who came up with the idea to expand the practical applications of blockchain tech back in 2014, and, thanks to a well-orchestrated ICO, ended up creating Ethereum.</p>\n<p><strong>So, ICOs in crypto are a way of fundraising capital for promising crypto startups.</strong> But how do they look in real life?</p>\n<p><img style=\"display: block; margin-left: auto; margin-right: auto;\" title=\"ICO vs IDO: How do ICOs happen?\" src=https://www.bitdegree.org/"https://assets.bitdegree.org/crypto/storage/optimized/ICO-vs-IDO-02.jpg/" alt=\"ICO vs IDO: How do ICOs happen?\" width=\"1000\" height=\"534\" /></p>\n<p>Organizing an ICO usually consists of the following stages. <strong>First of all, a company prepares a <a href=https://www.bitdegree.org/"https://www.bitdegree.org/crypto/learn/crypto-terms/what-is-whitepaper/">whitepaper. It’s an official document that states their vision, their mission, the technical part of their project, and the reasoning why it’s going to be something that’s better not to miss out on.</p>\n<p>Once the whitepaper is complete, the team begins <strong>looking for potential investors</strong>. They send them their whitepaper, pitch their idea, and try to convince them to support the project.</p>\n<p>Then, after they find eager investors, the actual ‘coin offering’ part takes place. <strong>The startup issues their own tokens, and sells them to their investors.</strong></p>\n<p>What makes the ICO crypto concept attractive is the fact that, in case the company was to truly achieve their goal, their own native token would increase in value, thus allowing investors to profit from the coins they obtained during the ICO.</p>\n<p><img style=\"display: block; margin-left: auto; margin-right: auto;\" title=\"ICO vs IDO: The ICO boom.\" src=https://www.bitdegree.org/"https://assets.bitdegree.org/crypto/storage/optimized/ICO-vs-IDO-03.jpg/" alt=\"ICO vs IDO: The ICO boom.\" width=\"1000\" height=\"566\" /></p>\n<p>Here are some other notable ICOs that contributed to the popularity of this way of fundraising. In 2017, the <a href=https://www.bitdegree.org/"https://www.bitdegree.org/crypto/buy-binance-coin-bnb/">Binance Coin</strong></a> raised <strong>$15 million</strong>. The same year, <a href=https://www.bitdegree.org/"https://www.bitdegree.org/crypto/buy-chainlink-link/">Chainlink, a decentralized oracle network, raised <strong>$32 million</strong> through an ICO.</p>\n<p>As you can see, the numbers here are far from pocket money. But nothing comes close to the ICO held by <a href=https://www.bitdegree.org/"https://www.bitdegree.org/crypto/buy-eos/">EOS, the blockchain protocol, which raised over <strong>$4 billion</strong> in 2018.</p>\n<p>Obviously, such success stories inspired others. 2017 became known as the year of <strong>\"the ICO boom\"</strong>. During this year, more than 4,000 ICOs were organized, and over $22 billion was raised! People sensed that this is the new goldmine, and everyone flocked in to cash out on this new trend.</p>\n<p>Unfortunately, it’s not only honest, hard-working people who grabbed this opportunity. Many scammers made history by organizing well-covered thefts in the shape of ICOs.</p>\n<p><img style=\"display: block; margin-left: auto; margin-right: auto;\" title=\"ICO vs IDO: Ponzi scheme.\" src=https://www.bitdegree.org/"https://assets.bitdegree.org/crypto/storage/optimized/ICO-vs-IDO-05.jpg/" alt=\"ICO vs IDO: Ponzi scheme.\" width=\"1000\" height=\"691\" /></p>\n<p><strong>The infamous Bitconnect</strong> launched their ICO back in 2016, and raised $2.5 million by selling their <a href=https://www.bitdegree.org/"https://www.bitdegree.org/cryptocurrency-prices/bitconnect-bcc-price/">BCC token</strong></a> to gullible investors. <strong>Pincoin</strong> <strong>is yet another example</strong> of bad people ruining the reputation of good things.</p>\n<p>The team behind Pincoin promised investors high returns on their investment in exchange for buying tokens. However, most people would tell you that it was nothing but a well-decorated <a href=https://www.bitdegree.org/"https://www.bitdegree.org/crypto/learn/crypto-terms/what-is-ponzi-scheme/">Ponzi scheme</strong></a>. The project collapsed, and the founders fled the country with all the investors’ funds in their pockets.</p>\n<p>It became clear. <strong>ICOs are a rather dangerous way of trusting one’s money to a crypto startup. </strong>Something new had to be offered. And it was. A new way of fundraising was created.</p>\n<h2>What’s an IEO?</h2>\n<p>Suddenly, IEOs became a thing. <strong>The abbreviation stands for “Initial Exchange Offering”</strong>, and, as you can probably tell from the name, it refers to <a href=https://www.bitdegree.org/"https://www.bitdegree.org/crypto/best-cryptocurrency-exchange/">exchanges being involved with it. And for a reason. A platform was needed to organize the fundraising procedure, and make it more difficult for scammers and malicious people to organize their fraudulent projects.</p>\n<p><img style=\"display: block; margin-left: auto; margin-right: auto;\" title=\"ICO vs IDO: Initial Exchange Offering.\" src=https://www.bitdegree.org/"https://assets.bitdegree.org/crypto/storage/optimized/ICO-vs-IDO-06.jpg/" alt=\"ICO vs IDO: Initial Exchange Offering.\" width=\"1000\" height=\"569\" /></p>\n<p>Just like ICOs vs IDOs, <strong>IEOs are also a way of fundraising</strong>. The ‘Exchange’ here refers to a cryptocurrency exchange. It plays the role of an intermediary between the two participating sides. The people behind the project <em>(the ones who need the money)</em>, and the investors <em>(the ones who have the money)</em>.</p>\n<p><strong>It was the first quarter of 2019, when IEOs started gaining popularity.</strong></p>\n<p>In its essence, IEOs are very similar to ICOs, except for the fact that there’s a platform, provided by an unbiased third party, which employs security measures, thus making the whole deal more trustworthy and transparent. By extent, it became more appealing to investors, who, at that time, had become a lot more cautious about investing in crypto projects.</p>\n<p>Here, let’s take a look at some notable examples of successful IEOs.</p>\n<p><img style=\"display: block; margin-left: auto; margin-right: auto;\" title=\"ICO vs IDO: The BitTorrent IEO held through the Binance Launchpad.\" src=https://www.bitdegree.org/"https://assets.bitdegree.org/crypto/storage/optimized/ICO-vs-IDO-08.jpg/" alt=\"ICO vs IDO: The BitTorrent IEO held through the Binance Launchpad.\" width=\"1000\" height=\"541\" /></p>\n<p>In 2019, <a href=https://www.bitdegree.org/"https://www.bitdegree.org/cryptocurrency-prices/bittorrent-new-btt-price/">BitTorrent raised $7.2 million in less than 15 minutes. The IEO was organized and took place on the <strong>Binance Launchpad</strong>. This is a platform provided by <a href=https://www.bitdegree.org/"/crypto/goon/binance/" target=\"_blank\" rel=\"nofollow noindex noopener\"><strong>Binance</strong></a>, the crypto exchange, created solely for IEOs.</p>\n<p>Another example could be <strong>Huobi Prime's IEO for the TOP Network</strong>. It resulted in $8.3 million raised in 19 seconds! As you can tell from the event’s name, the IEO was held on the crypto exchange <a href=https://www.bitdegree.org/"/crypto/goon/huobi/" target=\"_blank\" rel=\"nofollow noindex noopener\"><strong>Huobi</strong></a>.</p>\n<p><img style=\"display: block; margin-left: auto; margin-right: auto;\" title=\"ICO vs IDO: Huobi Prime's IEO for the TOP Network.\" src=https://www.bitdegree.org/"https://assets.bitdegree.org/crypto/storage/optimized/ICO-vs-IDO-09.jpg/" alt=\"ICO vs IDO: Huobi Prime's IEO for the TOP Network.\" width=\"1000\" height=\"682\" /></p>\n<p>But a new problem arose. In certain cases, <strong>not everyone was able to participate in the token acquisition</strong>. Exchanges began limiting who could participate in IEOs by, for example, introducing various requirements. They could have ranged from asking users to have an account on the exchange, hold the exchange’s native tokens, or meet trading volume requirements. The same applied to projects which may have wanted to organize their IEO on a particular exchange.</p>\n<p>Once again, the world of fundraising models needed something new.</p>\n<h2>What is IDO?</h2>\n<p>So, that’s where IDOs in crypto became a thing. <strong>An “IDO” is an “Initial DEX Offering,”</strong> where “DEX” stands for “<a href=https://www.bitdegree.org/"https://www.bitdegree.org/crypto/learn/crypto-terms/what-is-decentralized-exchange-dex/">Decentralized Exchange</strong></a>”. If you feel like refreshing your knowledge on what DEXs are, and how they are different from centralized exchanges, be sure to check a <a href=https://www.bitdegree.org/"https://www.bitdegree.org/crypto/learn/dex-vs-cex/">section dedicated to this topic</strong></a>!</p>\n<p><img style=\"display: block; margin-left: auto; margin-right: auto;\" title=\"ICO vs IDO: Initial DEX Offering.\" src=https://www.bitdegree.org/"https://assets.bitdegree.org/crypto/storage/optimized/ICO-vs-IDO-11.jpg/" alt=\"ICO vs IDO: Initial DEX Offering.\" width=\"1000\" height=\"596\" /></p>\n<p>Now, the debate of ICO vs IDO in crypto, just like the one of IDO vs IEO, goes on. After all, <strong>they’re all just different fundraising mechanisms for crypto startups</strong>. But, this time, the action takes place not on a <a href=https://www.bitdegree.org/"https://www.bitdegree.org/crypto/learn/crypto-terms/what-is-centralized-exchange-cex/">centralized exchange</strong></a>, <em>but… </em>you guessed it, a decentralized one.</p>\n<p>The competition of ICO vs IDO vs IEO is a real thing because they are all ways of allowing startups to raise capital by selling tokens to investors. With IDOs, the whole process takes place on a DEX, thus solving the problems that arise with ICOs and IEOs - namely, a lack of transparency, safety, or participation requirements.</p>\n<p><strong>IDOs really decentralize the whole fundraising process. </strong>A <a href=https://www.bitdegree.org/"https://www.bitdegree.org/crypto/best-cryptocurrency-wallet/">crypto wallet</strong></a> and an internet connection were the main conditions to contribute to the fundraiser campaign.</p>\n<p>Suddenly, projects were able to market their products to the whole community, instead of selected accredited investors. You can look at this as a <strong>‘GoFundMe’ version of DeFi</strong>, since, at its very essence, IDOs work in a very similar way.</p>\n<p>Apart from that, IDOs allow projects to experiment and see for themselves what the market demand for their newly-issued token is. These tokens aren’t listed on centralized exchanges at the time of the IDO, so truly enthusiastic investors can begin trading them on DEXs before they get listed on a centralized platform.</p>\n<p><img style=\"display: block; margin-left: auto; margin-right: auto;\" title=\"ICO vs IDO: Balancer and Uniswap IDOs.\" src=https://www.bitdegree.org/"https://assets.bitdegree.org/crypto/storage/optimized/ICO-vs-IDO-14.jpg/" alt=\"ICO vs IDO: Balancer and Uniswap IDOs.\" width=\"1000\" height=\"483\" /></p>\n<p>Here are some real-life examples. In August 2020, <a href=https://www.bitdegree.org/"https://www.bitdegree.org/cryptocurrency-prices/ocean-protocol-ocean-price/">Ocean Protocol</strong></a>, a data exchange protocol, raised $1.8 million on <a href=https://www.bitdegree.org/"https://www.bitdegree.org/top-crypto-exchanges/balancer-v2/">Balancer. Or, in October 2020, <a href=https://www.bitdegree.org/"https://www.bitdegree.org/cryptocurrency-prices/polkastarter-pols-price/">Polkastarter, a decentralized protocol, raised $775k on <a href=https://www.bitdegree.org/"https://www.bitdegree.org/top-crypto-exchanges/uniswap-v3/">Uniswap.

/n
Wrapping Up</h2>\n<p>So, there you have it; <strong>we have covered the ongoing ICO vs IDO vs IEO debate, the three most popular DeFi fundraising models</strong>. None of them are perfect, yet it’s thanks to these fundraising processes that we have what we have in the crypto space. Every established household name had its beginnings. And, no matter what DeFi company, dApp, or product you’d look into, it’s almost certain that it began with either an ICO, IEO, or an IDO.</p>","meta_title":"ICO vs IDO vs IEO: The Key Differences and Similarities","meta_description":"No matter if you're trying to find the winner in the ICO vs IDO battle, ICO vs IEO, or IEO vs IDO, you'll find all you need to know here!","meta_keywords":"ico vs ido, ico vs ido crypto, ico crypto, ido crypto, ico meaning, what is ico, ido meaning, what is ido, ico vs ido vs ieo","order":3,"language":"en","created_at":"2023-04-07T10:59:54.000000Z","updated_at":"2023-05-15T05:53:14.000000Z","modified_content":"<p>In this section, we’re going to take a look at the concepts of <a href=https://www.bitdegree.org/"https://www.bitdegree.org/crypto/learn/crypto-terms/what-is-initial-coin-offering-ico/">ICO vs <a href=https://www.bitdegree.org/"https://www.bitdegree.org/crypto/learn/crypto-terms/what-is-initial-dex-offering-ido/">IDO vs <a href=https://www.bitdegree.org/"https://www.bitdegree.org/crypto/learn/crypto-terms/what-is-initial-exchange-offering-ieo/">IEO!
/n
For a beginner, they all mean the same thing - <em>confusion</em>. What do these abbreviations even stand for? In my the previous sections, I’ve covered various DeFi elements, such as <a href=https://www.bitdegree.org/"https://www.bitdegree.org/crypto/learn/what-is-blockchain/">blockchains, <a href=https://www.bitdegree.org/"https://www.bitdegree.org/crypto/learn/what-are-dapps-in-crypto/">dApps, and <a href=https://www.bitdegree.org/"https://www.bitdegree.org/crypto/learn/how-do-cryptocurrency-exchanges-work/">cryptocurrency exchanges</strong></a>. Today, I shall concentrate on how many of these companies and projects got their start. In many cases, it was thanks to an ICO, IEO, or IDO!</p>\n<p>As you’ll see, <strong>these processes provide different benefits, just as they all have their own, unique drawbacks</strong>. They’re a cause for debate, since there’s no right answer about which one is the best way of conducting the initial stages of raising capital and starting a DeFi project.</p>\n<p>In this section, we’re going to define and discuss ICO vs IDO vs IEO. Specifically, we’ll talk about what every one of these terms mean, what’s their purpose, when and why were they created, and what’s their role in the overall bigger picture of the <a href=https://www.bitdegree.org/"https://www.bitdegree.org/crypto/learn/crypto-terms/what-is-defi/">DeFi world.</p>\n<p><em>Let’s jump straight to it!</em></p>\n<div class=\"container\">\n <div class=\"row justify-content-center\">\n <div class=\"col-md-10 comparison-suggestion pb-3 mb-4\">\n <div class=\"d-flex flex-row\">\n <div class=\"text-center\">\n <div class=\"img-block-yt\">\n <img src=https://www.bitdegree.org/"https://assets.bitdegree.org/crypto/assets/images/compare-crypto-exchanges.gif/"/n alt=\"ICO vs IDO vs IEO: Which One's the Best? (Easily Explained)\"\n title=\"ICO vs IDO vs IEO: Which One's the Best? (Easily Explained)\" class=\"border-0\">\n <p>Video Explainer</p>\n </div>\n </div>\n <div class=\"col-xs-10 col-sm-10 col-md-10 text-left py-3 yt-info\">\n <h4 class=\"mb-1\">Video Explainer: ICO vs IDO vs IEO: Which One is the One?</h4>\n <p class=\"py-1 mb-0 youtube-video-subtitle\">Reading is not your thing? Watch the \"ICO vs IDO vs IEO: Which One is the One?\" video explainer</p>\n </div>\n </div>\n <div class=\"row justify-content-center text-center\">\n <div class=\"col-12 col-md-11 px-3\">\n <div class=\"wrapper mb-0\">\n <div class=\"youtube mb-4 bg-transparent p-0 video-modal-popup\" data-toggle=\"modal\"\n data-target=\"#video-modal\" data-id=\"hKPJx_u9Zc8\" data-title=\"CryptoFinallyExplained\">\n <div class=\"video-gradient-top\"></div>\n <p class=\"text-left dyk-video-title\">ICO vs IDO vs IEO: Which One's the Best? (Easily Explained)</p>\n <img src=https://www.bitdegree.org/"https://i.ytimg.com/vi/hKPJx_u9Zc8/hq720.jpg/"/n alt=\"ICO vs IDO vs IEO: Which One's the Best? (Easily Explained)\"\n title=\"ICO vs IDO vs IEO: Which One's the Best? (Easily Explained)\"\n class=\"p-0\">\n <img class=\"play-button\" data-target=\"#video-modal\"\n src=https://www.bitdegree.org/"https://assets.bitdegree.org/crypto/assets/video-button.png/"/n alt=\"ICO vs IDO vs IEO: Which One's the Best? (Easily Explained)\">\n </div>\n </div>\n </div>\n </div>\n <div class=\"row justify-content-center text-center\">\n <div>\n <a href=https://www.bitdegree.org/"https://www.youtube.com/c/CryptoFinallyExplained?sub_confirmation=1\%22\n class=\"btn yt-promo mb-2\" target=\"_blank\" rel=\"nofollow noopener\">\n <div class=\"row justify-content-center align-items-center mx-0 text-center\">\n <div class=\"col-4 col-md-4\">\n <i class=\"fab fa-youtube yt-dyk-btn\"></i>\n </div>\n <div class=\"col-8 col-md-8 text-center yt-promo-text\">\n <h4 class=\"m-0 text-white\">SUBSCRIBE</h4>\n <span>ON YOUTUBE</span>\n </div>\n </div>\n </a>\n </div>\n </div>\n </div>\n </div>\n</div>\n<div class=\"modal fade\" id=\"video-modal\" tabindex=\"-1\" role=\"dialog\" aria-labelledby=\"hKPJx_u9Zc8\">\n <div class=\"modal-dialog modal-dialog-centered modal-lg\" role=\"document\">\n <div class=\"modal-content\">\n <div class=\"modal-body p-0\">\n <button type=\"button\" class=\"video-modal-close close\" data-dismiss=\"modal\" aria-label=\"Close\">\n <i aria-hidden=\"true\" class=\"fas fa-times\"></i>\n </button>\n <div id=\"iframe\"></div>\n </div>\n <a class=\"text-decoration-none\"\n href=https://www.bitdegree.org/"https://www.youtube.com/c/CryptoFinallyExplained?sub_confirmation=1\%22\n rel=\"nofollow noopener\" target=\"_blank\">\n <div class=\"modal-footer p-0 d-block bg-white\">\n <div class=\"row justify-content-center m-0\">\n <div class=\"col-3 col-md-4 col-lg-2 p-0\">\n <img class=\"w-100 h-100\" src=https://www.bitdegree.org/"https://assets.bitdegree.org/crypto/assets/crypto-subscribe.jpg/" alt=\"Subscribe\">\n </div>\n <div class=\"col-9 col-md-8 col-lg-2 px-0 d-flex\">\n <div class=\"modal-subscribe w-100\">\n <p class=\"m-0 mt-1 mr-3\">SUBSCRIBE<br>\n <span class=\"m-0\">ON YOUTUBE</span>\n </p>\n </div>\n </div>\n <div class=\"col-12 col-md-12 col-lg-8 p-0 text-center d-flex justify-content-center align-items-center\">\n <div class=\"modal-subscribe-text\">\n <h4 class=\"m-0\">Understand crypto with ease</h4>\n <span>New explainer videos every week!</span>\n </div>\n </div>\n </div>\n </div>\n </a>\n </div>\n </div>\n</div>\n<h2>What is ICO?</h2>\n<p>Let’s begin by answering, <em>“what is ICO?”.</em> Well, for starters, <strong>ICO abbreviates as an “Initial Coin Offering”</strong>.</p>\n<p><img style=\"display: block; margin-left: auto; margin-right: auto;\" title=\"ICO vs IDO: Initial Coin Offering.\" src=https://www.bitdegree.org/"https://assets.bitdegree.org/crypto/storage/optimized/ICO-vs-IDO-01.jpg/" alt=\"ICO vs IDO: Initial Coin Offering.\" width=\"1000\" height=\"583\" /></p>\n<p>In order to understand its role, consider this example - it will give you more than a dry theoretical definition of this term:</p>\n<p>It’s 2014. And this is Mark. He’s only 19 years old, but he’s a brilliant, promising guy who has revolutionary ideas brewing up in his mind. He’s been eyeing the crypto world closely, he sees the potential that <a href=https://www.bitdegree.org/"https://www.bitdegree.org/crypto/buy-bitcoin-btc/">Bitcoin has, and how important the blockchain impact on the world might be.</p>\n<p><strong>Mark understands that Bitcoin offers a radical new approach towards money</strong>, and how the international monetary system should look like. It’s a game-changing innovation that introduces decentralized payments, and aims to give people back their power over their money and information.</p>\n<p>Mark is a smart fellow. He realizes that Bitcoin’s core decentralized architecture, the blockchain technology, could become a very powerful tool that could be put to use to make the whole world a better place. From financial apps, to gaming, or data storing - it could be used to transform the world as we know it.</p>\n<p>Okay, so Mark comes up with an idea. Now, in order to make it happen, he needs a strong team, and… money. <em>Lots of money. </em>Where does he get it from? <em>Fundraising.</em> But, it’s crypto we’re talking about here. <strong>So, Mark goes and organizes an ICO, an Initial Coin Offering, with hopes that it will attract investors. </strong>Everything goes according to plan, and Mark ends up with a newly-raised $18 million.</p>\n<p>In case this sounds very familiar… This story did indeed happen, and everything here is true. Except for the fact that Mark’s real name isn’t Mark. It’s <a href=https://www.bitdegree.org/"https://www.bitdegree.org/crypto/learn/crypto-terms/who-is-vitalik-buterin/">Vitalik Buterin</strong></a>, who came up with the idea to expand the practical applications of blockchain tech back in 2014, and, thanks to a well-orchestrated ICO, ended up creating Ethereum.</p>\n<p><strong>So, ICOs in crypto are a way of fundraising capital for promising crypto startups.</strong> But how do they look in real life?</p>\n<p><img style=\"display: block; margin-left: auto; margin-right: auto;\" title=\"ICO vs IDO: How do ICOs happen?\" src=https://www.bitdegree.org/"https://assets.bitdegree.org/crypto/storage/optimized/ICO-vs-IDO-02.jpg/" alt=\"ICO vs IDO: How do ICOs happen?\" width=\"1000\" height=\"534\" /></p>\n<p>Organizing an ICO usually consists of the following stages. <strong>First of all, a company prepares a <a href=https://www.bitdegree.org/"https://www.bitdegree.org/crypto/learn/crypto-terms/what-is-whitepaper/">whitepaper. It’s an official document that states their vision, their mission, the technical part of their project, and the reasoning why it’s going to be something that’s better not to miss out on.</p>\n<p>Once the whitepaper is complete, the team begins <strong>looking for potential investors</strong>. They send them their whitepaper, pitch their idea, and try to convince them to support the project.</p>\n<p>Then, after they find eager investors, the actual ‘coin offering’ part takes place. <strong>The startup issues their own tokens, and sells them to their investors.</strong></p>\n<p>What makes the ICO crypto concept attractive is the fact that, in case the company was to truly achieve their goal, their own native token would increase in value, thus allowing investors to profit from the coins they obtained during the ICO.</p>\n<p><img style=\"display: block; margin-left: auto; margin-right: auto;\" title=\"ICO vs IDO: The ICO boom.\" src=https://www.bitdegree.org/"https://assets.bitdegree.org/crypto/storage/optimized/ICO-vs-IDO-03.jpg/" alt=\"ICO vs IDO: The ICO boom.\" width=\"1000\" height=\"566\" /></p>\n<p>Here are some other notable ICOs that contributed to the popularity of this way of fundraising. In 2017, the <a href=https://www.bitdegree.org/"https://www.bitdegree.org/crypto/buy-binance-coin-bnb/">Binance Coin</strong></a> raised <strong>$15 million</strong>. The same year, <a href=https://www.bitdegree.org/"https://www.bitdegree.org/crypto/buy-chainlink-link/">Chainlink, a decentralized oracle network, raised <strong>$32 million</strong> through an ICO.</p>\n<p>As you can see, the numbers here are far from pocket money. But nothing comes close to the ICO held by <a href=https://www.bitdegree.org/"https://www.bitdegree.org/crypto/buy-eos/">EOS, the blockchain protocol, which raised over <strong>$4 billion</strong> in 2018.</p>\n<p>Obviously, such success stories inspired others. 2017 became known as the year of <strong>\"the ICO boom\"</strong>. During this year, more than 4,000 ICOs were organized, and over $22 billion was raised! People sensed that this is the new goldmine, and everyone flocked in to cash out on this new trend.</p>\n<p>Unfortunately, it’s not only honest, hard-working people who grabbed this opportunity. Many scammers made history by organizing well-covered thefts in the shape of ICOs.</p>\n<p><img style=\"display: block; margin-left: auto; margin-right: auto;\" title=\"ICO vs IDO: Ponzi scheme.\" src=https://www.bitdegree.org/"https://assets.bitdegree.org/crypto/storage/optimized/ICO-vs-IDO-05.jpg/" alt=\"ICO vs IDO: Ponzi scheme.\" width=\"1000\" height=\"691\" /></p>\n<p><strong>The infamous Bitconnect</strong> launched their ICO back in 2016, and raised $2.5 million by selling their <a href=https://www.bitdegree.org/"https://www.bitdegree.org/cryptocurrency-prices/bitconnect-bcc-price/">BCC token</strong></a> to gullible investors. <strong>Pincoin</strong> <strong>is yet another example</strong> of bad people ruining the reputation of good things.</p>\n<p>The team behind Pincoin promised investors high returns on their investment in exchange for buying tokens. However, most people would tell you that it was nothing but a well-decorated <a href=https://www.bitdegree.org/"https://www.bitdegree.org/crypto/learn/crypto-terms/what-is-ponzi-scheme/">Ponzi scheme</strong></a>. The project collapsed, and the founders fled the country with all the investors’ funds in their pockets.</p>\n<p>It became clear. <strong>ICOs are a rather dangerous way of trusting one’s money to a crypto startup. </strong>Something new had to be offered. And it was. A new way of fundraising was created.</p>\n<h2>What’s an IEO?</h2>\n<p>Suddenly, IEOs became a thing. <strong>The abbreviation stands for “Initial Exchange Offering”</strong>, and, as you can probably tell from the name, it refers to <a href=https://www.bitdegree.org/"https://www.bitdegree.org/crypto/best-cryptocurrency-exchange/">exchanges being involved with it. And for a reason. A platform was needed to organize the fundraising procedure, and make it more difficult for scammers and malicious people to organize their fraudulent projects.</p>\n<p><img style=\"display: block; margin-left: auto; margin-right: auto;\" title=\"ICO vs IDO: Initial Exchange Offering.\" src=https://www.bitdegree.org/"https://assets.bitdegree.org/crypto/storage/optimized/ICO-vs-IDO-06.jpg/" alt=\"ICO vs IDO: Initial Exchange Offering.\" width=\"1000\" height=\"569\" /></p>\n<p>Just like ICOs vs IDOs, <strong>IEOs are also a way of fundraising</strong>. The ‘Exchange’ here refers to a cryptocurrency exchange. It plays the role of an intermediary between the two participating sides. The people behind the project <em>(the ones who need the money)</em>, and the investors <em>(the ones who have the money)</em>.</p>\n<p><strong>It was the first quarter of 2019, when IEOs started gaining popularity.</strong></p>\n<p>In its essence, IEOs are very similar to ICOs, except for the fact that there’s a platform, provided by an unbiased third party, which employs security measures, thus making the whole deal more trustworthy and transparent. By extent, it became more appealing to investors, who, at that time, had become a lot more cautious about investing in crypto projects.</p>\n<p>Here, let’s take a look at some notable examples of successful IEOs.</p>\n<p><img style=\"display: block; margin-left: auto; margin-right: auto;\" title=\"ICO vs IDO: The BitTorrent IEO held through the Binance Launchpad.\" src=https://www.bitdegree.org/"https://assets.bitdegree.org/crypto/storage/optimized/ICO-vs-IDO-08.jpg/" alt=\"ICO vs IDO: The BitTorrent IEO held through the Binance Launchpad.\" width=\"1000\" height=\"541\" /></p>\n<p>In 2019, <a href=https://www.bitdegree.org/"https://www.bitdegree.org/cryptocurrency-prices/bittorrent-new-btt-price/">BitTorrent raised $7.2 million in less than 15 minutes. The IEO was organized and took place on the <strong>Binance Launchpad</strong>. This is a platform provided by <a href=https://www.bitdegree.org/"/crypto/goon/binance/" target=\"_blank\" rel=\"nofollow noindex noopener\"><strong>Binance</strong></a>, the crypto exchange, created solely for IEOs.</p>\n<p>Another example could be <strong>Huobi Prime's IEO for the TOP Network</strong>. It resulted in $8.3 million raised in 19 seconds! As you can tell from the event’s name, the IEO was held on the crypto exchange <a href=https://www.bitdegree.org/"/crypto/goon/huobi/" target=\"_blank\" rel=\"nofollow noindex noopener\"><strong>Huobi</strong></a>.</p>\n<p><img style=\"display: block; margin-left: auto; margin-right: auto;\" title=\"ICO vs IDO: Huobi Prime's IEO for the TOP Network.\" src=https://www.bitdegree.org/"https://assets.bitdegree.org/crypto/storage/optimized/ICO-vs-IDO-09.jpg/" alt=\"ICO vs IDO: Huobi Prime's IEO for the TOP Network.\" width=\"1000\" height=\"682\" /></p>\n<p>But a new problem arose. In certain cases, <strong>not everyone was able to participate in the token acquisition</strong>. Exchanges began limiting who could participate in IEOs by, for example, introducing various requirements. They could have ranged from asking users to have an account on the exchange, hold the exchange’s native tokens, or meet trading volume requirements. The same applied to projects which may have wanted to organize their IEO on a particular exchange.</p>\n<p>Once again, the world of fundraising models needed something new.</p>\n<h2>What is IDO?</h2>\n<p>So, that’s where IDOs in crypto became a thing. <strong>An “IDO” is an “Initial DEX Offering,”</strong> where “DEX” stands for “<a href=https://www.bitdegree.org/"https://www.bitdegree.org/crypto/learn/crypto-terms/what-is-decentralized-exchange-dex/">Decentralized Exchange</strong></a>”. If you feel like refreshing your knowledge on what DEXs are, and how they are different from centralized exchanges, be sure to check a <a href=https://www.bitdegree.org/"https://www.bitdegree.org/crypto/learn/dex-vs-cex/">section dedicated to this topic</strong></a>!</p>\n<p><img style=\"display: block; margin-left: auto; margin-right: auto;\" title=\"ICO vs IDO: Initial DEX Offering.\" src=https://www.bitdegree.org/"https://assets.bitdegree.org/crypto/storage/optimized/ICO-vs-IDO-11.jpg/" alt=\"ICO vs IDO: Initial DEX Offering.\" width=\"1000\" height=\"596\" /></p>\n<p>Now, the debate of ICO vs IDO in crypto, just like the one of IDO vs IEO, goes on. After all, <strong>they’re all just different fundraising mechanisms for crypto startups</strong>. But, this time, the action takes place not on a <a href=https://www.bitdegree.org/"https://www.bitdegree.org/crypto/learn/crypto-terms/what-is-centralized-exchange-cex/">centralized exchange</strong></a>, <em>but… </em>you guessed it, a decentralized one.</p>\n<p>The competition of ICO vs IDO vs IEO is a real thing because they are all ways of allowing startups to raise capital by selling tokens to investors. With IDOs, the whole process takes place on a DEX, thus solving the problems that arise with ICOs and IEOs - namely, a lack of transparency, safety, or participation requirements.</p>\n<p><strong>IDOs really decentralize the whole fundraising process. </strong>A <a href=https://www.bitdegree.org/"https://www.bitdegree.org/crypto/best-cryptocurrency-wallet/">crypto wallet</strong></a> and an internet connection were the main conditions to contribute to the fundraiser campaign.</p>\n<p>Suddenly, projects were able to market their products to the whole community, instead of selected accredited investors. You can look at this as a <strong>‘GoFundMe’ version of DeFi</strong>, since, at its very essence, IDOs work in a very similar way.</p>\n<p>Apart from that, IDOs allow projects to experiment and see for themselves what the market demand for their newly-issued token is. These tokens aren’t listed on centralized exchanges at the time of the IDO, so truly enthusiastic investors can begin trading them on DEXs before they get listed on a centralized platform.</p>\n<p><img style=\"display: block; margin-left: auto; margin-right: auto;\" title=\"ICO vs IDO: Balancer and Uniswap IDOs.\" src=https://www.bitdegree.org/"https://assets.bitdegree.org/crypto/storage/optimized/ICO-vs-IDO-14.jpg/" alt=\"ICO vs IDO: Balancer and Uniswap IDOs.\" width=\"1000\" height=\"483\" /></p>\n<p>Here are some real-life examples. In August 2020, <a href=https://www.bitdegree.org/"https://www.bitdegree.org/cryptocurrency-prices/ocean-protocol-ocean-price/">Ocean Protocol</strong></a>, a data exchange protocol, raised $1.8 million on <a href=https://www.bitdegree.org/"https://www.bitdegree.org/top-crypto-exchanges/balancer-v2/">Balancer. Or, in October 2020, <a href=https://www.bitdegree.org/"https://www.bitdegree.org/cryptocurrency-prices/polkastarter-pols-price/">Polkastarter, a decentralized protocol, raised $775k on <a href=https://www.bitdegree.org/"https://www.bitdegree.org/top-crypto-exchanges/uniswap-v3/">Uniswap.
/n
Wrapping Up</h2>\n<p>So, there you have it; <strong>we have covered the ongoing ICO vs IDO vs IEO debate, the three most popular DeFi fundraising models</strong>. None of them are perfect, yet it’s thanks to these fundraising processes that we have what we have in the crypto space. Every established household name had its beginnings. And, no matter what DeFi company, dApp, or product you’d look into, it’s almost certain that it began with either an ICO, IEO, or an IDO.</p>","preview_url":"https://www.bitdegree.org/crypto/learn/ico-vs-ido","youtube_video":{"id":149,"channel_id":1,"sort":3,"video_title":"ICO vs IDO vs IEO: Which One's the Best? (Easily Explained)","description":"What are the key differences and similarities between ICO vs IDO vs IEO?\n\nCrypto natives are well aware of the “ICO vs IDO vs IEO” debate. It’s because crypto fundraising can come in a few different forms, and these are some of the most common ones. “ICO vs IDO vs IEO” stands for “Initial Coin Offering vs Initial Exchange Offering vs Initial DEX Offering”, respectively. It's all confusing at first, but you need to know that this is how many crypto projects get their start.\n\nIn this video, I will explain what the three aforementioned concepts are. Specifically, we’ll talk about their main differences, their purpose, and why they were created, in the first place. By analyzing each of them separately, you'll get a full picture of what DeFi fundraising looks like.\n\nWhich way of fundraising money for a new crypto project looks the most appealing to you? Let me know, in the comment section below!\n\nVideo Time Table:\n0:00 Introduction to ICO vs IDO vs IEO\n1:11 What is an ICO?\n5:23 What is an IEO?\n7:23 What is an IDO?\n8:57 Real-life examples\n9:16 Wrap-up: ICO vs IDO vs IEO\n\nGet Quick Crypto Tips on Twitter - Follow:\nhttps://twitter.com/crypto_xplained\n\n#ICOvsIDO #ICO #IEO","video_id":"hKPJx_u9Zc8","duration":598,"view_count":101,"thumbnail_url":"https://i.ytimg.com/vi/hKPJx_u9Zc8/hq720.jpg","thumbnail_width":1280,"thumbnail_height":720,"published_at":"2023-05-12 14:11:43","created_at":"2023-05-12T23:00:03.000000Z","updated_at":"2023-05-21T23:00:04.000000Z","channel":{"id":1,"title":"CryptoFinallyExplained","channel_id":"UCOryUY0yxC08eJtK23mNgiA","main_playlist_id":"UUOryUY0yxC08eJtK23mNgiA"}}},"prevSection":{"id":472,"featured_image_id":10342,"original_id":null,"youtube_video_id":145,"author_id":42,"translator_id":null,"chapter_id":7,"title":"Where Can You Trade Cryptocurrencies?","slug":"where-to-trade-crypto","definition":"Did you know that one of the ways to trade crypto is by meeting in real life?","status":"published","content":"<p>In this section, you're going to find out <strong>where to trade cryptocurrencies</strong>!</p>\n<p>Trading cryptocurrencies sounds simple. Everyone’s talking about it, which makes you think that anyone could do it! And that’s true. But for a beginner, it’s easy to get lost, real quick. In some of the previous sections of this Crypto 101 Handbook, you can find explanations of what <a href=https://www.bitdegree.org/"https://www.bitdegree.org/crypto/learn/what-is-a-cryptocurrency/">cryptocurrencies are. Understanding them and actually knowing where to trade crypto, however, are two very different things.</p>\n<p>The difference between places where you can trade crypto is a source for a heated debate. After getting to know every one of them, you’ll see what I mean. And, believe me - the last one will make you raise some eyebrows!</p>\n<p>In this section, I’ll cover where to trade cryptocurrencies, how to do so, what are the advantages and disadvantages of different types of platforms, and what is the best choice for beginners.</p>\n<p><em>Let’s dive into it!</em></p>\n<h2>What’s So Special About Trading Cryptocurrencies?</h2>\n<p>Crypto trading refers to the buying and selling of virtual or digital assets. As you know by now, these are usually coins or tokens, such as <a href=https://www.bitdegree.org/"https://www.bitdegree.org/crypto/buy-bitcoin-btc/">Bitcoin, <a href=https://www.bitdegree.org/"https://www.bitdegree.org/crypto/buy-ethereum-eth/">Ethereum, <a href=https://www.bitdegree.org/"https://www.bitdegree.org/crypto/buy-litecoin-ltc/">Litecoin, and others. In most cases, the aim of crypto trading is to make a profit from price fluctuations.</p>\n<p>Many best crypto trading platforms that provide their clients with the ability to get together and trade their crypto assets seek profits, as well. It’s a service, after all! Companies that offer such services are called centralized exchanges, otherwise known as CEXs. Let’s start with them.</p>\n<h2>Centralized Exchanges (CEX)</h2>\n<p>In addition to the best platform to trade crypto, cryptocurrency trading requires knowledge, intuition, and understanding of such factors as market demand, regulatory developments, technological advancements, and so on.</p>\n<p>This goes without even mentioning the technical part of setting up all that’s necessary to actually be able to buy, sell, and trade crypto. It can get complicated! That’s where CEXs come in. They make life easier, especially for beginners, since they provide a simple answer to the question - where to trade crypto?</p>\n<p><img style=\"display: block; margin-left: auto; margin-right: auto;\" title=\"Where to trade crypto: Centralized exchanges.\" src=https://www.bitdegree.org/"https://assets.bitdegree.org/crypto/storage/optimized/where-to-trade-cryptocurrencies-01.jpg/" alt=\"Where to trade crypto: Centralized exchanges.\" width=\"1000\" height=\"518\" /></p>\n<p><strong>It’s the most user-friendly and intuitive way of trading crypto assets. </strong>Here’s a way to look at it.</p>\n<p>Think of a centralized exchange as a supermarket, but for crypto. Just like in a regular supermarket, a CEX is a place where users can buy and sell cryptocurrencies using not only other cryptos, but traditional, fiat money as well.</p>\n<p>If you’re new to crypto and don’t have any cryptocurrencies yet, how else can you acquire crypto if not paying for it with dollars, euros, and other fiat currencies, on a crypto trading platform? That’s why most crypto journeys begin on centralized exchanges.</p>\n<p>Centralized exchanges are ‘centralized’ because <strong>they operate under a set authority that builds, develops, and maintains the platform in question</strong>. This means that the exchange holds control over funds and manages transactions, as well as controls the assets of their users, matches buyers and sellers, and facilitates trades. In other words - makes things less complicated for the trader.</p>\n<p>Users don’t have to worry about making sure that a particular crypto asset that they’re after is actually available, just like they don’t have to actively look for a buyer or a seller of the asset they want to obtain. The CEX organizes all of this for them.</p>\n<p>That’s a service. And by doing so, the company makes a profit. The platform applies a transaction fee to every trade that takes place on it.</p>\n<p>Among the best crypto trading platforms are such CEXs as <a href=https://www.bitdegree.org/"https://www.bitdegree.org/crypto/goon/binance/" target=\"_blank\" rel=\"nofollow noindex noopener\"><strong>Binance</strong></a>, <a href=https://www.bitdegree.org/"https://www.bitdegree.org/crypto/goon/kraken/" target=\"_blank\" rel=\"nofollow noindex noopener\"><strong>Kraken</strong></a>, <a href=https://www.bitdegree.org/"https://www.bitdegree.org/crypto/goon/coinbase/" target=\"_blank\" rel=\"nofollow noindex noopener\"><strong>Coinbase</strong></a>, and others. As time went by, these companies expanded the list of services they provide, so they could stay relevant and stand out from the crowd of competitors, providing their clients not only with a place where to trade crypto, but with a variety of additional features, as well.</p>\n<p><img style=\"display: block; margin-left: auto; margin-right: auto;\" title=\"Where to trade crypto: Benefits of centralized exchanges.\" src=https://www.bitdegree.org/"https://assets.bitdegree.org/crypto/storage/optimized/where-to-trade-cryptocurrencies-03.jpg/" alt=\"Where to trade crypto: Benefits of centralized exchanges.\" width=\"1000\" height=\"618\" /></p>\n<p>In order to become more accessible for newcomers, CEXs have made sure they have a user-friendly interface, easy-to-follow instructions and tutorials, as well as various payment options.</p>\n<p>They apply the so-called KYC procedures. <strong>“KYC” stands for “Know Your Customer”.</strong> It’s a measure employed to make sure people use their real identities to reduce the risk of fraudulent behavior. So, after you create an account and get verified, you can literally go and buy $20 worth of Bitcoin in a matter of minutes. It’s that easy!</p>\n<p>Besides that, CEXs have more safety guarantees for inexperienced users. These include more robust security measures, insurance for user funds, and, often, support teams that can assist with any issues that may arise.</p>\n<p>So, basically, CEXs are intuitive, user-friendly, and reduce the chances of losing one’s assets due to inexperience. That’s why they’re often considered to be the <strong>best crypto exchanges for day trading and investing</strong>.</p>\n<p>Once the traders level up, they often opt for something way more complex, yet more independent and wild. Instead of a centralized crypto exchange, they go for a decentralized exchange (DEX).</p>\n<h2>Decentralized Exchanges (DEX)</h2>\n<p>Now, this is where things get interesting.</p>\n<p>Earlier in this “where to trade crypto?” section, centralized exchanges were compared to supermarkets. Trading on CEXs is like buying groceries at Walmart: you receive a check, there are surveillance cameras, and you know that the cashier has no intentions of scamming you. They’re just performing a function within a system that’s set up, monitored, and implemented by an upper authority - the store owners.</p>\n<p>DEXs have none of this. You can look at them as, say, street vendors. The street is the blockchain, and various street vendors use it for their own good. They stand on their own, and you either find what you’re after, or you don’t. Not being scammed, and finding what you need, is entirely up to you.</p>\n<p><img style=\"display: block; margin-left: auto; margin-right: auto;\" title=\"Where to trade crypto: Decentralized exchanges.\" src=https://www.bitdegree.org/"https://assets.bitdegree.org/crypto/storage/optimized/where-to-trade-cryptocurrencies-05-6412bb9bc1a11.jpg/" alt=\"Where to trade crypto: Decentralized exchanges.\" width=\"1000\" height=\"583\" /></p>\n<p>But just like CEXs, some DEXs are often considered to be the best crypto trading platforms, too.</p>\n<p>Unlike CEXs, however, <strong>decentralized exchanges are not controlled by a central entity</strong>. They run on a decentralized network of computers.</p>\n<p>DEXs employ smart contracts to execute trades directly between users. If you feel like you need a reminder of what smart contracts are, be sure to check <a href=https://www.bitdegree.org/"https://www.bitdegree.org/crypto/learn/what-are-smart-contracts/">this section</strong></a>!</p>\n<p>Users’ assets are not held on the exchange, and it’s thanks to smart contracts that the trades (or, swaps) are executed without the intervention of the service provider. <strong>Users participate in trades directly using their wallets.</strong></p>\n<p>Let’s illustrate this with an example. If a fire broke out in a single shop in a mall, the entire building would be evacuated, and a fire hazard would be announced. Everyone and everything within the supermarket would depend on the safety and the current state of the main platform. Be it a supermarket, or a CEX.</p>\n<p>That’s not the case with DEXs, though. There is no single platform, or a coin vault, or database that attackers could attempt to break in. It just doesn’t exist. <strong>The blockchain operates all over the place, all at once.</strong> Nevertheless, it’s important to keep in mind that hackers find other ways of intervening. For example, they may trick the oracle, and outplay the smart contracts. There is a <a href=https://www.bitdegree.org/"https://www.bitdegree.org/crypto/learn/what-is-an-oracle-in-crypto/">section about oracles</strong></a>, as well - make sure to check it out!</p>\n<p>To add to that, as it was stated earlier, centralized exchanges conduct KYC procedures - they verify the identities of their users, and gather their personal & financial data to prevent fraud and malicious activities. Not everyone likes that.</p>\n<p>On DEXs, people who are looking at where to trade crypto don’t have to share their personal info in order to participate in trades.</p>\n<p><img style=\"display: block; margin-left: auto; margin-right: auto;\" title=\"Where to trade crypto: KYC.\" src=https://www.bitdegree.org/"https://assets.bitdegree.org/crypto/storage/optimized/where-to-trade-cryptocurrencies-08.jpg/" alt=\"Where to trade crypto: KYC.\" width=\"1000\" height=\"487\" /></p>\n<p>Yet, when it comes to DEXs, there’s one essential drawback. <strong>They are difficult to use and navigate.</strong> Beginners would simply not understand what’s going on. And that’s not something people want to feel when dealing with money.</p>\n<p>This results in DEXs having lower trading volumes or slower processing times, since they’re not as popular as, say, platforms such as Binance.</p>\n<p><strong>Another issue is the availability of various assets.</strong> Since the trading volumes are lower, chances are that a particular amount of specific crypto that a trader might be after could simply not be available on the exchange, due to the lack of its supply. This is where <a href=https://www.bitdegree.org/"https://www.bitdegree.org/crypto/learn/crypto-terms/what-is-liquidity-pool/">liquidity pools</strong></a> come in, but that’s a different topic, altogether.</p>\n<p>So, by now, we’ve established that, when it comes to the best platforms to trade crypto, there are two main places to participate in cryptocurrency trading. Specifically, centralized and decentralized exchanges. There’s an alternative option, altogether, though. Something that’s often seen as more intense, dangerous, and unpredictable.</p>\n<h2>Meetings In Real Life & P2P</h2>\n<p>We’ve talked about CEXs as supermarkets, about DEXs as street vendors, so now, let’s talk about buying stuff from a guy whose listing you saw on Craigslist.</p>\n<p><strong>Just like one-on-one deals happen through Facebook Marketplace, Craigslist, and other similar places, crypto trading can happen the same way.</strong></p>\n<p><strong><img style=\"display: block; margin-left: auto; margin-right: auto;\" title=\"Where to trade crypto: Face-to-face trading.\" src=https://www.bitdegree.org/"https://assets.bitdegree.org/crypto/storage/optimized/where-to-trade-cryptocurrencies-09.jpg/" alt=\"Where to trade crypto: Face-to-face trading.\" width=\"1000\" height=\"626\" /></strong></p>\n<p>Traders sometimes get in touch with each other online, meet in real life, and seal the deal. One person hands over the cash, while another transfers the agreed amount of crypto into their wallet right there, on the spot.</p>\n<p>If the deal is large, no one guarantees the trader won’t get jumped and robbed. There’s no safety net, everything relies on trust. Therefore, such deals mostly happen between people who are either connected, know each other, or belong to the same social circles, because otherwise, it’s just dangerous.</p>\n<p>Thus, an alternative was created. It’s called <strong>P2P trading. </strong>“P2P” stands for ‘’Peer-to-Peer”. Such platforms are websites or apps that allow users to trade crypto directly with each other, without the involvement of a middleman or centralized exchange.</p>\n<p>What they do is match buyers and sellers, facilitate the transfer of funds, and act as a trusted third party to hold the funds in <a href=https://www.bitdegree.org/"https://www.bitdegree.org/crypto/learn/crypto-terms/what-is-escrow/">escrow until the transaction is complete.</p>\n<p><img style=\"display: block; margin-left: auto; margin-right: auto;\" title=\"Where to trade crypto: P2P trading.\" src=https://www.bitdegree.org/"https://assets.bitdegree.org/crypto/storage/optimized/where-to-trade-cryptocurrencies-10.jpg/" alt=\"Where to trade crypto: P2P trading.\" width=\"1156\" height=\"787\" /></p>\n<p>Sounds a lot like a CEX, doesn’t it? The main difference is that <strong>users don’t have to transfer their crypto to a centralized exchange throughout the process of the trade</strong>. Having this in mind, sometimes, it’s the centralized exchanges themselves that provide P2P platforms, as a further emphasis on the idea that it’s the best place to trade crypto, feature variety-wise. An example could be the <a href=https://www.bitdegree.org/"https://www.bitdegree.org/crypto/goon/binance-p2p/" target=\"_blank\" rel=\"nofollow noindex noopener\"><strong>Binance P2P Exchange</strong></a>.</p>\n<h2>Final Thoughts</h2>\n<p>So, to sum up, centralized exchanges, decentralized exchanges, and P2P deals are where cryptocurrency trading takes place. Each of these options have their own pros and cons, as well as each of them vary in their level of security, anonymity, or accessibility.</p>\n<p>The bottom line is this. <strong>If you’re a beginner, centralized exchanges should be the obvious choice.</strong> Low risk and security - financial, and physical - are the main priorities for every cautious trader.</p>","meta_title":"Where to Trade Crypto? Best Crypto Trading Platforms","meta_description":"Are you wondering where to trade crypto assets? If you are, you're in luck because you'll find the best crypto trading platforms right here!","meta_keywords":"where to trade crypto, crypto trading platforms, best crypto trading platform, best platform to trade crypto, crypto trading platform, best place to trade crypto, best crypto exchange for day trading, best crypto exchange","order":1,"language":"en","created_at":"2023-03-15T08:04:06.000000Z","updated_at":"2023-04-24T13:41:44.000000Z","modified_content":"<p>In this section, you're going to find out <strong>where to trade cryptocurrencies</strong>!</p>\n<p>Trading cryptocurrencies sounds simple. Everyone’s talking about it, which makes you think that anyone could do it! And that’s true. But for a beginner, it’s easy to get lost, real quick. In some of the previous sections of this Crypto 101 Handbook, you can find explanations of what <a href=https://www.bitdegree.org/"https://www.bitdegree.org/crypto/learn/what-is-a-cryptocurrency/">cryptocurrencies are. Understanding them and actually knowing where to trade crypto, however, are two very different things.</p>\n<p>The difference between places where you can trade crypto is a source for a heated debate. After getting to know every one of them, you’ll see what I mean. And, believe me - the last one will make you raise some eyebrows!</p>\n<p>In this section, I’ll cover where to trade cryptocurrencies, how to do so, what are the advantages and disadvantages of different types of platforms, and what is the best choice for beginners.</p>\n<p><em>Let’s dive into it!</em></p>\n<div class=\"container\">\n <div class=\"row justify-content-center\">\n <div class=\"col-md-10 comparison-suggestion pb-3 mb-4\">\n <div class=\"d-flex flex-row\">\n <div class=\"text-center\">\n <div class=\"img-block-yt\">\n <img src=https://www.bitdegree.org/"https://assets.bitdegree.org/crypto/assets/images/compare-crypto-exchanges.gif/"/n alt=\"Where to Trade Crypto: 3 Best Approaches Explained (Animated)\"\n title=\"Where to Trade Crypto: 3 Best Approaches Explained (Animated)\" class=\"border-0\">\n <p>Video Explainer</p>\n </div>\n </div>\n <div class=\"col-xs-10 col-sm-10 col-md-10 text-left py-3 yt-info\">\n <h4 class=\"mb-1\">Video Explainer: Where Can You Trade Cryptocurrencies?</h4>\n <p class=\"py-1 mb-0 youtube-video-subtitle\">Reading is not your thing? Watch the \"Where Can You Trade Cryptocurrencies?\" video explainer</p>\n </div>\n </div>\n <div class=\"row justify-content-center text-center\">\n <div class=\"col-12 col-md-11 px-3\">\n <div class=\"wrapper mb-0\">\n <div class=\"youtube mb-4 bg-transparent p-0 video-modal-popup\" data-toggle=\"modal\"\n data-target=\"#video-modal\" data-id=\"LAQkWsx45gc\" data-title=\"CryptoFinallyExplained\">\n <div class=\"video-gradient-top\"></div>\n <p class=\"text-left dyk-video-title\">Where to Trade Crypto: 3 Best Approaches Explained (Animated)</p>\n <img src=https://www.bitdegree.org/"https://i.ytimg.com/vi/LAQkWsx45gc/hq720.jpg/"/n alt=\"Where to Trade Crypto: 3 Best Approaches Explained (Animated)\"\n title=\"Where to Trade Crypto: 3 Best Approaches Explained (Animated)\"\n class=\"p-0\">\n <img class=\"play-button\" data-target=\"#video-modal\"\n src=https://www.bitdegree.org/"https://assets.bitdegree.org/crypto/assets/video-button.png/"/n alt=\"Where to Trade Crypto: 3 Best Approaches Explained (Animated)\">\n </div>\n </div>\n </div>\n </div>\n <div class=\"row justify-content-center text-center\">\n <div>\n <a href=https://www.bitdegree.org/"https://www.youtube.com/c/CryptoFinallyExplained?sub_confirmation=1\%22\n class=\"btn yt-promo mb-2\" target=\"_blank\" rel=\"nofollow noopener\">\n <div class=\"row justify-content-center align-items-center mx-0 text-center\">\n <div class=\"col-4 col-md-4\">\n <i class=\"fab fa-youtube yt-dyk-btn\"></i>\n </div>\n <div class=\"col-8 col-md-8 text-center yt-promo-text\">\n <h4 class=\"m-0 text-white\">SUBSCRIBE</h4>\n <span>ON YOUTUBE</span>\n </div>\n </div>\n </a>\n </div>\n </div>\n </div>\n </div>\n</div>\n<div class=\"modal fade\" id=\"video-modal\" tabindex=\"-1\" role=\"dialog\" aria-labelledby=\"LAQkWsx45gc\">\n <div class=\"modal-dialog modal-dialog-centered modal-lg\" role=\"document\">\n <div class=\"modal-content\">\n <div class=\"modal-body p-0\">\n <button type=\"button\" class=\"video-modal-close close\" data-dismiss=\"modal\" aria-label=\"Close\">\n <i aria-hidden=\"true\" class=\"fas fa-times\"></i>\n </button>\n <div id=\"iframe\"></div>\n </div>\n <a class=\"text-decoration-none\"\n href=https://www.bitdegree.org/"https://www.youtube.com/c/CryptoFinallyExplained?sub_confirmation=1\%22\n rel=\"nofollow noopener\" target=\"_blank\">\n <div class=\"modal-footer p-0 d-block bg-white\">\n <div class=\"row justify-content-center m-0\">\n <div class=\"col-3 col-md-4 col-lg-2 p-0\">\n <img class=\"w-100 h-100\" src=https://www.bitdegree.org/"https://assets.bitdegree.org/crypto/assets/crypto-subscribe.jpg/" alt=\"Subscribe\">\n </div>\n <div class=\"col-9 col-md-8 col-lg-2 px-0 d-flex\">\n <div class=\"modal-subscribe w-100\">\n <p class=\"m-0 mt-1 mr-3\">SUBSCRIBE<br>\n <span class=\"m-0\">ON YOUTUBE</span>\n </p>\n </div>\n </div>\n <div class=\"col-12 col-md-12 col-lg-8 p-0 text-center d-flex justify-content-center align-items-center\">\n <div class=\"modal-subscribe-text\">\n <h4 class=\"m-0\">Understand crypto with ease</h4>\n <span>New explainer videos every week!</span>\n </div>\n </div>\n </div>\n </div>\n </a>\n </div>\n </div>\n</div>\n<h2>What’s So Special About Trading Cryptocurrencies?</h2>\n<p>Crypto trading refers to the buying and selling of virtual or digital assets. As you know by now, these are usually coins or tokens, such as <a href=https://www.bitdegree.org/"https://www.bitdegree.org/crypto/buy-bitcoin-btc/">Bitcoin, <a href=https://www.bitdegree.org/"https://www.bitdegree.org/crypto/buy-ethereum-eth/">Ethereum, <a href=https://www.bitdegree.org/"https://www.bitdegree.org/crypto/buy-litecoin-ltc/">Litecoin, and others. In most cases, the aim of crypto trading is to make a profit from price fluctuations.</p>\n<p>Many best crypto trading platforms that provide their clients with the ability to get together and trade their crypto assets seek profits, as well. It’s a service, after all! Companies that offer such services are called centralized exchanges, otherwise known as CEXs. Let’s start with them.</p>\n<h2>Centralized Exchanges (CEX)</h2>\n<p>In addition to the best platform to trade crypto, cryptocurrency trading requires knowledge, intuition, and understanding of such factors as market demand, regulatory developments, technological advancements, and so on.</p>\n<p>This goes without even mentioning the technical part of setting up all that’s necessary to actually be able to buy, sell, and trade crypto. It can get complicated! That’s where CEXs come in. They make life easier, especially for beginners, since they provide a simple answer to the question - where to trade crypto?</p>\n<p><img style=\"display: block; margin-left: auto; margin-right: auto;\" title=\"Where to trade crypto: Centralized exchanges.\" src=https://www.bitdegree.org/"https://assets.bitdegree.org/crypto/storage/optimized/where-to-trade-cryptocurrencies-01.jpg/" alt=\"Where to trade crypto: Centralized exchanges.\" width=\"1000\" height=\"518\" /></p>\n<p><strong>It’s the most user-friendly and intuitive way of trading crypto assets. </strong>Here’s a way to look at it.</p>\n<p>Think of a centralized exchange as a supermarket, but for crypto. Just like in a regular supermarket, a CEX is a place where users can buy and sell cryptocurrencies using not only other cryptos, but traditional, fiat money as well.</p>\n<p>If you’re new to crypto and don’t have any cryptocurrencies yet, how else can you acquire crypto if not paying for it with dollars, euros, and other fiat currencies, on a crypto trading platform? That’s why most crypto journeys begin on centralized exchanges.</p>\n<p>Centralized exchanges are ‘centralized’ because <strong>they operate under a set authority that builds, develops, and maintains the platform in question</strong>. This means that the exchange holds control over funds and manages transactions, as well as controls the assets of their users, matches buyers and sellers, and facilitates trades. In other words - makes things less complicated for the trader.</p>\n<p>Users don’t have to worry about making sure that a particular crypto asset that they’re after is actually available, just like they don’t have to actively look for a buyer or a seller of the asset they want to obtain. The CEX organizes all of this for them.</p>\n<p>That’s a service. And by doing so, the company makes a profit. The platform applies a transaction fee to every trade that takes place on it.</p>\n<p>Among the best crypto trading platforms are such CEXs as <a href=https://www.bitdegree.org/"https://www.bitdegree.org/crypto/goon/binance/" target=\"_blank\" rel=\"nofollow noindex noopener\"><strong>Binance</strong></a>, <a href=https://www.bitdegree.org/"https://www.bitdegree.org/crypto/goon/kraken/" target=\"_blank\" rel=\"nofollow noindex noopener\"><strong>Kraken</strong></a>, <a href=https://www.bitdegree.org/"https://www.bitdegree.org/crypto/goon/coinbase/" target=\"_blank\" rel=\"nofollow noindex noopener\"><strong>Coinbase</strong></a>, and others. As time went by, these companies expanded the list of services they provide, so they could stay relevant and stand out from the crowd of competitors, providing their clients not only with a place where to trade crypto, but with a variety of additional features, as well.</p>\n<p><img style=\"display: block; margin-left: auto; margin-right: auto;\" title=\"Where to trade crypto: Benefits of centralized exchanges.\" src=https://www.bitdegree.org/"https://assets.bitdegree.org/crypto/storage/optimized/where-to-trade-cryptocurrencies-03.jpg/" alt=\"Where to trade crypto: Benefits of centralized exchanges.\" width=\"1000\" height=\"618\" /></p>\n<p>In order to become more accessible for newcomers, CEXs have made sure they have a user-friendly interface, easy-to-follow instructions and tutorials, as well as various payment options.</p>\n<p>They apply the so-called KYC procedures. <strong>“KYC” stands for “Know Your Customer”.</strong> It’s a measure employed to make sure people use their real identities to reduce the risk of fraudulent behavior. So, after you create an account and get verified, you can literally go and buy $20 worth of Bitcoin in a matter of minutes. It’s that easy!</p>\n<p>Besides that, CEXs have more safety guarantees for inexperienced users. These include more robust security measures, insurance for user funds, and, often, support teams that can assist with any issues that may arise.</p>\n<p>So, basically, CEXs are intuitive, user-friendly, and reduce the chances of losing one’s assets due to inexperience. That’s why they’re often considered to be the <strong>best crypto exchanges for day trading and investing</strong>.</p>\n<p>Once the traders level up, they often opt for something way more complex, yet more independent and wild. Instead of a centralized crypto exchange, they go for a decentralized exchange (DEX).</p>\n<h2>Decentralized Exchanges (DEX)</h2>\n<p>Now, this is where things get interesting.</p>\n<p>Earlier in this “where to trade crypto?” section, centralized exchanges were compared to supermarkets. Trading on CEXs is like buying groceries at Walmart: you receive a check, there are surveillance cameras, and you know that the cashier has no intentions of scamming you. They’re just performing a function within a system that’s set up, monitored, and implemented by an upper authority - the store owners.</p>\n<p>DEXs have none of this. You can look at them as, say, street vendors. The street is the blockchain, and various street vendors use it for their own good. They stand on their own, and you either find what you’re after, or you don’t. Not being scammed, and finding what you need, is entirely up to you.</p>\n<p><img style=\"display: block; margin-left: auto; margin-right: auto;\" title=\"Where to trade crypto: Decentralized exchanges.\" src=https://www.bitdegree.org/"https://assets.bitdegree.org/crypto/storage/optimized/where-to-trade-cryptocurrencies-05-6412bb9bc1a11.jpg/" alt=\"Where to trade crypto: Decentralized exchanges.\" width=\"1000\" height=\"583\" /></p>\n<p>But just like CEXs, some DEXs are often considered to be the best crypto trading platforms, too.</p>\n<p>Unlike CEXs, however, <strong>decentralized exchanges are not controlled by a central entity</strong>. They run on a decentralized network of computers.</p>\n<p>DEXs employ smart contracts to execute trades directly between users. If you feel like you need a reminder of what smart contracts are, be sure to check <a href=https://www.bitdegree.org/"https://www.bitdegree.org/crypto/learn/what-are-smart-contracts/">this section</strong></a>!</p>\n<p>Users’ assets are not held on the exchange, and it’s thanks to smart contracts that the trades (or, swaps) are executed without the intervention of the service provider. <strong>Users participate in trades directly using their wallets.</strong></p>\n<p>Let’s illustrate this with an example. If a fire broke out in a single shop in a mall, the entire building would be evacuated, and a fire hazard would be announced. Everyone and everything within the supermarket would depend on the safety and the current state of the main platform. Be it a supermarket, or a CEX.</p>\n<p>That’s not the case with DEXs, though. There is no single platform, or a coin vault, or database that attackers could attempt to break in. It just doesn’t exist. <strong>The blockchain operates all over the place, all at once.</strong> Nevertheless, it’s important to keep in mind that hackers find other ways of intervening. For example, they may trick the oracle, and outplay the smart contracts. There is a <a href=https://www.bitdegree.org/"https://www.bitdegree.org/crypto/learn/what-is-an-oracle-in-crypto/">section about oracles</strong></a>, as well - make sure to check it out!</p>\n<p>To add to that, as it was stated earlier, centralized exchanges conduct KYC procedures - they verify the identities of their users, and gather their personal & financial data to prevent fraud and malicious activities. Not everyone likes that.</p>\n<p>On DEXs, people who are looking at where to trade crypto don’t have to share their personal info in order to participate in trades.</p>\n<p><img style=\"display: block; margin-left: auto; margin-right: auto;\" title=\"Where to trade crypto: KYC.\" src=https://www.bitdegree.org/"https://assets.bitdegree.org/crypto/storage/optimized/where-to-trade-cryptocurrencies-08.jpg/" alt=\"Where to trade crypto: KYC.\" width=\"1000\" height=\"487\" /></p>\n<p>Yet, when it comes to DEXs, there’s one essential drawback. <strong>They are difficult to use and navigate.</strong> Beginners would simply not understand what’s going on. And that’s not something people want to feel when dealing with money.</p>\n<p>This results in DEXs having lower trading volumes or slower processing times, since they’re not as popular as, say, platforms such as Binance.</p>\n<p><strong>Another issue is the availability of various assets.</strong> Since the trading volumes are lower, chances are that a particular amount of specific crypto that a trader might be after could simply not be available on the exchange, due to the lack of its supply. This is where <a href=https://www.bitdegree.org/"https://www.bitdegree.org/crypto/learn/crypto-terms/what-is-liquidity-pool/">liquidity pools</strong></a> come in, but that’s a different topic, altogether.</p>\n<p>So, by now, we’ve established that, when it comes to the best platforms to trade crypto, there are two main places to participate in cryptocurrency trading. Specifically, centralized and decentralized exchanges. There’s an alternative option, altogether, though. Something that’s often seen as more intense, dangerous, and unpredictable.</p>\n<h2>Meetings In Real Life & P2P</h2>\n<p>We’ve talked about CEXs as supermarkets, about DEXs as street vendors, so now, let’s talk about buying stuff from a guy whose listing you saw on Craigslist.</p>\n<p><strong>Just like one-on-one deals happen through Facebook Marketplace, Craigslist, and other similar places, crypto trading can happen the same way.</strong></p>\n<p><strong><img style=\"display: block; margin-left: auto; margin-right: auto;\" title=\"Where to trade crypto: Face-to-face trading.\" src=https://www.bitdegree.org/"https://assets.bitdegree.org/crypto/storage/optimized/where-to-trade-cryptocurrencies-09.jpg/" alt=\"Where to trade crypto: Face-to-face trading.\" width=\"1000\" height=\"626\" /></strong></p>\n<p>Traders sometimes get in touch with each other online, meet in real life, and seal the deal. One person hands over the cash, while another transfers the agreed amount of crypto into their wallet right there, on the spot.</p>\n<p>If the deal is large, no one guarantees the trader won’t get jumped and robbed. There’s no safety net, everything relies on trust. Therefore, such deals mostly happen between people who are either connected, know each other, or belong to the same social circles, because otherwise, it’s just dangerous.</p>\n<p>Thus, an alternative was created. It’s called <strong>P2P trading. </strong>“P2P” stands for ‘’Peer-to-Peer”. Such platforms are websites or apps that allow users to trade crypto directly with each other, without the involvement of a middleman or centralized exchange.</p>\n<p>What they do is match buyers and sellers, facilitate the transfer of funds, and act as a trusted third party to hold the funds in <a href=https://www.bitdegree.org/"https://www.bitdegree.org/crypto/learn/crypto-terms/what-is-escrow/">escrow until the transaction is complete.</p>\n<p><img style=\"display: block; margin-left: auto; margin-right: auto;\" title=\"Where to trade crypto: P2P trading.\" src=https://www.bitdegree.org/"https://assets.bitdegree.org/crypto/storage/optimized/where-to-trade-cryptocurrencies-10.jpg/" alt=\"Where to trade crypto: P2P trading.\" width=\"1156\" height=\"787\" /></p>\n<p>Sounds a lot like a CEX, doesn’t it? The main difference is that <strong>users don’t have to transfer their crypto to a centralized exchange throughout the process of the trade</strong>. Having this in mind, sometimes, it’s the centralized exchanges themselves that provide P2P platforms, as a further emphasis on the idea that it’s the best place to trade crypto, feature variety-wise. An example could be the <a href=https://www.bitdegree.org/"https://www.bitdegree.org/crypto/goon/binance-p2p/" target=\"_blank\" rel=\"nofollow noindex noopener\"><strong>Binance P2P Exchange</strong></a>.</p>\n<h2>Final Thoughts</h2>\n<p>So, to sum up, centralized exchanges, decentralized exchanges, and P2P deals are where cryptocurrency trading takes place. Each of these options have their own pros and cons, as well as each of them vary in their level of security, anonymity, or accessibility.</p>\n<p>The bottom line is this. <strong>If you’re a beginner, centralized exchanges should be the obvious choice.</strong> Low risk and security - financial, and physical - are the main priorities for every cautious trader.</p>","preview_url":"https://www.bitdegree.org/crypto/learn/where-to-trade-crypto","youtube_video":{"id":145,"channel_id":1,"sort":7,"video_title":"Where to Trade Crypto: 3 Best Approaches Explained (Animated)","description":"Where to trade cryptocurrencies?\n\n*How* to trade crypto and *where* to trade crypto are two very different questions. However, understanding what crypto exchanges are, and how they differ (CEXs VS DEXs) is an essential step in anyone’s crypto journey.\n\nIn this video, I will explain where most crypto trades take place, how different the trading platforms can be, and what are their main advantages and disadvantages! By learning the fundamental definitions, differences, and practical use applications, you’ll no longer be confused by all of the seemingly-difficult technical terms that are unavoidable in this space.\n\nDo you have a favorite platform where you trade cryptocurrencies? Do share it, in the comments below!\n\nVideo Time Table:\n0:00 Introduction to Where to Trade Crypto\n0:57 What is Crypto Trading?\n1:27 CEXs Explained\n4:17 DEXs Explained\n7:38 P2P Trading Explained\n9:08 Wrap-up: Where to Trade Cryptocurrencies?\n\nGet Quick Crypto Tips on Twitter - Follow:\nhttps://twitter.com/crypto_xplained\n\n#WhereToTradeCrypto #Binance #CEX","video_id":"LAQkWsx45gc","duration":595,"view_count":292,"thumbnail_url":"https://i.ytimg.com/vi/LAQkWsx45gc/hq720.jpg","thumbnail_width":1280,"thumbnail_height":720,"published_at":"2023-04-06 14:15:02","created_at":"2023-04-06T23:00:06.000000Z","updated_at":"2023-05-21T23:00:04.000000Z","channel":{"id":1,"title":"CryptoFinallyExplained","channel_id":"UCOryUY0yxC08eJtK23mNgiA","main_playlist_id":"UUOryUY0yxC08eJtK23mNgiA"}}},"chapterTitle":"Trading & Investing","cryptoBookSection":{"id":473,"featured_image_id":10729,"original_id":null,"youtube_video_id":146,"author_id":42,"translator_id":null,"chapter_id":7,"title":"Investing in Crypto: What Investing Options Do You Have?","slug":"how-to-invest-in-crypto","definition":"Did you know that buying fungible and non-fungible tokens, mining, staking, or participating in GameFi and DeFi are all ways to invest in crypto?","status":"published","content":"<p>In this section, we're going to talk about all the <strong>different ways of how to invest in crypto</strong>!</p>\n<p>Investing in crypto is a wide topic. It's constantly evolving, as new opportunities, strategies, and risks appear every now and then. There are different sections in this Crypto 101 Handbook which concentrate on particular methods of crypto investment, such as staking or mining. In this section, though, I’ll touch on them all, so you could have the full picture of this fascinating topic.</p>\n<p>The question of how to invest in crypto is an interesting one, since there are many answers. It's enough to take a glimpse into the online crypto space, and you'll instantly notice how polarizing this debate can be! So, before forming your own opinion, you gotta get to know what these different ways are. It can get complex and confusing, but fear no more – that's what I'm here for!</p>\n<p>In this section, we're going to discuss different ways of how to invest in cryptocurrencies. <strong>These include</strong> <strong>buying, mining, staking, the perks of Decentralized Finance (DeFi), Non-Fungible Tokens (NFTs), and finally, investing in GameFi</strong>. I'll describe each of them as we'll look into what makes them so different, on their own. Eventually, you'll see that, no matter your level of experience, crypto investing for beginners is also a thing!</p>\n<p><em>Now, let's get to it!</em></p>\n<h2>Options of Investing in Crypto</h2>\n<p>Investing in crypto is like a Swiss army knife. It can have many shapes and forms, but it all boils down to expectations of generating a return on investment. The most popular form of it - purchasing digital coins - is only the tip of the iceberg, since there are many more ways to achieve this goal.</p>\n<p>But let's begin with the classics - first on the list is simply buying and hodling crypto.</p>\n<h3>Buying Cryptocurrency & HODLing</h3>\n<p>In technical terms, buying crypto refers to acquiring a specific digital coin (or token) by buying it for traditional fiat currency, be it dollars, euros, or something else, or exchanging other cryptocurrencies for it.</p>\n<p><img style=\"display: block; margin-left: auto; margin-right: auto;\" title=\"How to invest in crypto: Buying crypto from exchanges.\" src=https://www.bitdegree.org/"https://assets.bitdegree.org/crypto/storage/optimized/how-to-invest-in-crypto-01.jpg/" alt=\"How to invest in crypto: Buying crypto from exchanges.\" width=\"1000\" height=\"540\" /></p>\n<p>You can buy cryptocurrency on a CEX, a centralized exchange, like <a href=https://www.bitdegree.org/"https://www.bitdegree.org/crypto/goon/binance/" target=\"_blank\" rel=\"nofollow noindex noopener\"><strong>Binance</strong></a>, or a DEX, a decentralized exchange, like <a href=https://www.bitdegree.org/"https://www.bitdegree.org/crypto/goon/uniswap/" target=\"_blank\" rel=\"nofollow noindex noopener\"><strong>Uniswap</strong></a>. Keep in mind that, unlike centralized exchanges, you can't buy crypto for fiat money on decentralized platforms. But that's a different topic, so if you want to learn more, be sure to check out this section.</p>\n<p>So, essentially, investing in cryptocurrency by acquiring crypto is self-explanatory. <strong>You literally invest in a coin with the hopes that its price will increase over time</strong>, which will allow you to sell it and end up pocketing some profit. This is very similar to investing in companies in their early stages by buying their stocks and being able to sell them once the company makes it big.</p>\n<p>Or, to make it more simple, it's like obtaining an object just after it comes out and selling it later, when it becomes a rarity. A perfect example would be the first edition of Harry Potter. In 2021, a copy of the first edition of Philosopher's Stone sold for $471,000. Its value increased over time, and the owner was able to make a profit by selling it. The same applies to everyone who bought their <a href=https://www.bitdegree.org/"https://www.bitdegree.org/crypto/buy-bitcoin-btc/">Bitcoin for mere cents 10 years ago, and held on to it. Today, they are millionaires.</p>\n<p>But they wouldn't be if they didn't follow that one, essential principle of smart crypto investing. It's known as \"HODL.\" The expression was accidentally created in 2013, in a Bitcoin forum, where an enthusiastic crypto trader made a typo while trying to spell out HOLD. The funny mistake became part of the community's lingo, and today is known as the acronym for \"Hold On for Dear Life.\"</p>\n<p><img style=\"display: block; margin-left: auto; margin-right: auto;\" title=\"How to invest in crypto: HODLing.\" src=https://www.bitdegree.org/"https://assets.bitdegree.org/crypto/storage/optimized/how-to-invest-in-crypto-02.jpg/" alt=\"How to invest in crypto: HODLing.\" width=\"1000\" height=\"557\" /></p>\n<p><strong>HODLing has become a term used to describe the strategy of holding onto a particular cryptocurrency for a long period of time, rather than selling it.</strong> HODLing gets difficult when the price of a coin falls drastically. Most people run to sell it, while HODLers refuse to do so, hoping that, in the long term, the price will recover, and increase.</p>\n<p>Sometimes it’s irrational, sometimes, it doesn’t work out. It’s a bet, after all. But sometimes it works - just like someone was HODLing on that first edition of the Harry Potter book until its value skyrocketed, so do crypto investors HODL on particular coins, hoping to make a profit one day.</p>\n<h3>Mining</h3>\n<p>Moving on, let's take a look at mining, as a method of how to invest in cryptocurrencies.</p>\n<p><strong>Mining is the process of validating transactions on a blockchain</strong>, and earning rewards in the form of cryptocurrency for doing so. Mining requires specialized computer hardware for its computational power, and naturally, it uses a lot of energy. The nitty-gritty of the technical side of it would require an entire section to cover.</p>\n<p><img style=\"display: block; margin-left: auto; margin-right: auto;\" title=\"How to invest in crypto: Mining.\" src=https://www.bitdegree.org/"https://assets.bitdegree.org/crypto/storage/optimized/how-to-invest-in-crypto-04.jpg/" alt=\"How to invest in crypto: Mining.\" width=\"1000\" height=\"515\" /></p>\n<p>In its very essence, though, <strong>mining is a costly way of investing in crypto</strong>. Even though blockchains and their verification mechanisms differ, becoming a crypto miner is not something most people could afford. Therefore, various solutions were introduced, such as cloud mining.</p>\n<p><strong>Cloud mining</strong> is hiring a mining company to do the mining for you. You pay the company for their service, but in exchange, you give them an agreed-upon amount of the mined resources. Instead of buying and maintaining your own equipment, you simply rent hash power from a mining farm, and they do the job for you.</p>\n<p>It's important to note that this only applies to coins that are native to blockchains that run on the <a href=https://www.bitdegree.org/"https://www.bitdegree.org/crypto/learn/crypto-terms/what-is-proof-of-work-pow/">Proof-of-Work consensus mechanism. There are others, such as Ethereum's <a href=https://www.bitdegree.org/"https://www.bitdegree.org/crypto/learn/crypto-terms/what-is-proof-of-stake-pos/">Proof-of-Stake, and this brings us to another way of investing in crypto – staking.</p>\n<h3>Staking</h3>\n<p>For crypto freshmen, staking immediately gives off confusion, but for more advanced investors, it is something they don't ignore.</p>\n<p>Staking is rather similar to depositing money into banks. Sometimes, banks promise interest rates for those who are willing to deposit large amounts of money into them. It’s similar when it comes to staking. But it has a different purpose.</p>\n<p><img style=\"display: block; margin-left: auto; margin-right: auto;\" title=\"How to invest in crypto: Staking.\" src=https://www.bitdegree.org/"https://assets.bitdegree.org/crypto/storage/optimized/how-to-invest-in-crypto-06.jpg/" alt=\"How to invest in crypto: Staking.\" width=\"1000\" height=\"537\" /></p>\n<p>In the context of crypto, <strong>staking refers to locking up a certain amount of coins inside a blockchain</strong>, so that it could be used as collateral to support the operations of the network. It's a rather complex mechanism, and it differs from blockchain to blockchain. Nevertheless, its purpose is to help secure the network.</p>\n<p>This is achieved by the fact that <strong>stakers are the ones who receive the rights to validate transactions and compete to add new blocks to the blockchain</strong>. After having staked a required amount, stakers become the validators.</p>\n<p>For validating transactions, they receive rewards. Staking also works as a deterrent for malicious behavior. If a validator decided to engage in some shady business, they would be punished, as their staked assets would be confiscated.</p>\n<p>So, if you're doing good, you get rewards. Just don't get any funny ideas.</p>\n<h3>Decentralized Finance (DeFi)</h3>\n<p>The next stop on the ‘how to invest in crypto’ train is Decentralized Finance, or DeFi. It sounds so broad, that it looks like you could cover all ways of investing in crypto under this blanket-term. Yet, DeFi in itself is an emerging ecosystem of financial applications that provide new, less conventional ways of getting into crypto.</p>\n<p><img style=\"display: block; margin-left: auto; margin-right: auto;\" title=\"How to invest in crypto: Lending and borrowing.\" src=https://www.bitdegree.org/"https://assets.bitdegree.org/crypto/storage/optimized/how-to-invest-in-crypto-07.jpg/" alt=\"How to invest in crypto: Lending and borrowing.\" width=\"1000\" height=\"604\" /></p>\n<p>Among smart crypto investing opportunities, I shall emphasize <strong>lending and borrowing</strong> first. It's literally what it sounds like - DeFi lending and borrowing allow investors to lend crypto to others and earn interest, or - the opposite - borrow crypto and pay interest. Platforms like <a href=https://www.bitdegree.org/"https://www.bitdegree.org/crypto/goon/aave/" target=\"_blank\" rel=\"nofollow noindex noopener\"><strong>Aave</strong></a>, <a href=https://www.bitdegree.org/"https://www.bitdegree.org/crypto/goon/compound-finance/" target=\"_blank\" rel=\"nofollow noindex noopener\"><strong>Compound</strong></a>, and many others are offering these services.</p>\n<p>Another way of investing in crypto within the DeFi world is known as <strong>providing liquidity</strong>. It's thanks to liquidity providers that DEXs are a thing. When you're trading, swapping, or buying crypto on decentralized exchanges, the assets you're after don't just fall from the sky. They come from <a href=https://www.bitdegree.org/"https://www.bitdegree.org/crypto/learn/crypto-terms/what-is-liquidity-pool/">liquidity pools</strong></a> that exist thanks to those who decided to put their coins into them.</p>\n<p><img style=\"display: block; margin-left: auto; margin-right: auto;\" title=\"How to invest in crypto: Providing liquidity.\" src=https://www.bitdegree.org/"https://assets.bitdegree.org/crypto/storage/optimized/how-to-invest-in-crypto-08.jpg/" alt=\"How to invest in crypto: Providing liquidity.\" width=\"1000\" height=\"626\" /></p>\n<p>The richer the liquidity pools, the higher the volume of trades that can be executed, and by doing so, investors earn a fee from each trade that happens, thanks to the liquidity they provide.</p>\n<p>But liquidity could be provided not only to liquidity pools. Another method that includes gaining passive income from a similar tactic is called <strong>yield farming</strong>. It's similar to liquidity providing. Investors deposit their money into a DeFi protocol's liquidity pool, and earn money from all the trades that were possible thanks to this pool.</p>\n<p>But here, investors can also gain financial rewards in the form of newly issued tokens that are distributed to liquidity providers as a reward for their contribution. </p>\n<h3>Non-Fungible Tokens (NFTs)</h3>\n<p>The next method of how to invest in crypto are the famous NFTs, or Non-Fungible Tokens. <strong>NFTs are a type of digital asset that represents ownership of a unique item or piece of content, such as art, music, or any collectibles, in general</strong>. Even real estate or unique passes to events and community gatherings can also come in the form of NFTs. They can be bought, sold, and traded on various NFT marketplaces such as <a href=https://www.bitdegree.org/"https://www.bitdegree.org/crypto/goon/opensea/" target=\"_blank\" rel=\"nofollow noindex noopener\"><strong>OpenSea</strong></a>, Blur, Magic Eden, and others.</p>\n<p><img style=\"display: block; margin-left: auto; margin-right: auto;\" title=\"How to invest in crypto: NFTs.\" src=https://www.bitdegree.org/"https://assets.bitdegree.org/crypto/storage/optimized/how-to-invest-in-crypto-10.jpg/" alt=\"How to invest in crypto: NFTs.\" width=\"1000\" height=\"563\" /></p>\n<p>NFTs offer a new way to invest in digital art and other unique digital assets, and the investment part here looks <strong>very similar to investing in crypto coins</strong>. You try to buy low, and then wait for an opportunity to sell high.</p>\n<p>There's a term for short-term profit strategies when it comes to NFTs, and it's called <strong>flipping</strong>. Flipping refers to buying an NFT and then immediately selling it for a higher price. This can be a quick way to make a profit, but it's also a high-risk strategy, as the value of an NFT can be highly volatile.</p>\n<p>The opposite of flipping is hodling. I’ve already explained how hodling works earlier in this section. When it comes to NFTs, hodling means the same thing. Note that if you want to understand NFTs in-depth, there is a separate section about them - <a href=https://www.bitdegree.org/"https://www.bitdegree.org/crypto/learn/what-are-nfts/">check it out</strong></a>!</p>\n<h3>GameFi</h3>\n<p>And, finally, finishing off our list of the best crypto investing strategies, we've got one of the latest trends - GameFi. In a few words, <strong>it allows you to earn cryptocurrency by gaming</strong>. One of the most famous examples is <a href=https://www.bitdegree.org/"https://www.bitdegree.org/cryptocurrency-prices/axie-infinity-axs-price/">Axie Infinity</strong></a>. However, GameFi goes deeper than that.</p>\n<p><img style=\"display: block; margin-left: auto; margin-right: auto;\" title=\"How to invest in crypto: GameFi.\" src=https://www.bitdegree.org/"https://assets.bitdegree.org/crypto/storage/optimized/how-to-invest-in-crypto-13.jpg/" alt=\"How to invest in crypto: GameFi.\" width=\"1000\" height=\"572\" /></p>\n<p>If you really believe in a particular game, you can obtain, unlock, or buy NFTs of in-game items, which you can either sell later for a bigger price, or even rent out to someone else. Just like NFTs, but in-game.</p>\n<p>GameFi is still in its early stage. This industry could be the very next thing, or it could take a while until the gaming culture adapts to what Web3 can bring them. Therefore, it's safe to say that, when it comes to investing in GameFi, the risk is pretty high, and the future is yet to be clear.</p>\n<h2>Wrapping Up</h2>\n<p>As you can see, when it comes to different verified crypto investing strategies, you find yourself with a rather wide variety of choices, yet with no clear, single answer to how to invest in crypto. Yes, it's confusing at first, but that's not a bad thing. No matter what type of investor you might be, crypto offers many different possibilities that are likely to suit everyone's taste, skills, and character.</p>\n<p>Lastly, note that the aforementioned ways of investing in crypto differ in their technical complexity, the required level of knowledge, or simply, the amount of funds necessary in order to be able to participate in them.</p>","meta_title":"How to Invest in Crypto? Different Investing Strategies","meta_description":"Do you see the potential in cryptocurrencies and are wondering how to invest in crypto? You'll find all crypto investing strategies here!","meta_keywords":"how to invest in crypto, crypto investing, crypto investing strategies, crypto investing for beginners, how to invest in crypto currency, smart crypto investing, verified crypto investing, how to invest in crypto currencies, best crypto investing strategy","order":2,"language":"en","created_at":"2023-03-16T08:52:12.000000Z","updated_at":"2023-04-25T10:08:02.000000Z","modified_content":"<p>In this section, we're going to talk about all the <strong>different ways of how to invest in crypto</strong>!</p>\n<p>Investing in crypto is a wide topic. It's constantly evolving, as new opportunities, strategies, and risks appear every now and then. There are different sections in this Crypto 101 Handbook which concentrate on particular methods of crypto investment, such as staking or mining. In this section, though, I’ll touch on them all, so you could have the full picture of this fascinating topic.</p>\n<p>The question of how to invest in crypto is an interesting one, since there are many answers. It's enough to take a glimpse into the online crypto space, and you'll instantly notice how polarizing this debate can be! So, before forming your own opinion, you gotta get to know what these different ways are. It can get complex and confusing, but fear no more – that's what I'm here for!</p>\n<p>In this section, we're going to discuss different ways of how to invest in cryptocurrencies. <strong>These include</strong> <strong>buying, mining, staking, the perks of Decentralized Finance (DeFi), Non-Fungible Tokens (NFTs), and finally, investing in GameFi</strong>. I'll describe each of them as we'll look into what makes them so different, on their own. Eventually, you'll see that, no matter your level of experience, crypto investing for beginners is also a thing!</p>\n<p><em>Now, let's get to it!</em></p>\n<div class=\"container\">\n <div class=\"row justify-content-center\">\n <div class=\"col-md-10 comparison-suggestion pb-3 mb-4\">\n <div class=\"d-flex flex-row\">\n <div class=\"text-center\">\n <div class=\"img-block-yt\">\n <img src=https://www.bitdegree.org/"https://assets.bitdegree.org/crypto/assets/images/compare-crypto-exchanges.gif/"/n alt=\"How to Invest in Crypto: 6 Rewarding Strategies (Animated)\"\n title=\"How to Invest in Crypto: 6 Rewarding Strategies (Animated)\" class=\"border-0\">\n <p>Video Explainer</p>\n </div>\n </div>\n <div class=\"col-xs-10 col-sm-10 col-md-10 text-left py-3 yt-info\">\n <h4 class=\"mb-1\">Video Explainer: Investing in Crypto: What Investing Options Do You Have?</h4>\n <p class=\"py-1 mb-0 youtube-video-subtitle\">Reading is not your thing? Watch the \"Investing in Crypto: What Investing Options Do You Have?\" video explainer</p>\n </div>\n </div>\n <div class=\"row justify-content-center text-center\">\n <div class=\"col-12 col-md-11 px-3\">\n <div class=\"wrapper mb-0\">\n <div class=\"youtube mb-4 bg-transparent p-0 video-modal-popup\" data-toggle=\"modal\"\n data-target=\"#video-modal\" data-id=\"RExzpm9Pbpc\" data-title=\"CryptoFinallyExplained\">\n <div class=\"video-gradient-top\"></div>\n <p class=\"text-left dyk-video-title\">How to Invest in Crypto: 6 Rewarding Strategies (Animated)</p>\n <img src=https://www.bitdegree.org/"https://i.ytimg.com/vi/RExzpm9Pbpc/hq720.jpg/"/n alt=\"How to Invest in Crypto: 6 Rewarding Strategies (Animated)\"\n title=\"How to Invest in Crypto: 6 Rewarding Strategies (Animated)\"\n class=\"p-0\">\n <img class=\"play-button\" data-target=\"#video-modal\"\n src=https://www.bitdegree.org/"https://assets.bitdegree.org/crypto/assets/video-button.png/"/n alt=\"How to Invest in Crypto: 6 Rewarding Strategies (Animated)\">\n </div>\n </div>\n </div>\n </div>\n <div class=\"row justify-content-center text-center\">\n <div>\n <a href=https://www.bitdegree.org/"https://www.youtube.com/c/CryptoFinallyExplained?sub_confirmation=1\%22\n class=\"btn yt-promo mb-2\" target=\"_blank\" rel=\"nofollow noopener\">\n <div class=\"row justify-content-center align-items-center mx-0 text-center\">\n <div class=\"col-4 col-md-4\">\n <i class=\"fab fa-youtube yt-dyk-btn\"></i>\n </div>\n <div class=\"col-8 col-md-8 text-center yt-promo-text\">\n <h4 class=\"m-0 text-white\">SUBSCRIBE</h4>\n <span>ON YOUTUBE</span>\n </div>\n </div>\n </a>\n </div>\n </div>\n </div>\n </div>\n</div>\n<div class=\"modal fade\" id=\"video-modal\" tabindex=\"-1\" role=\"dialog\" aria-labelledby=\"RExzpm9Pbpc\">\n <div class=\"modal-dialog modal-dialog-centered modal-lg\" role=\"document\">\n <div class=\"modal-content\">\n <div class=\"modal-body p-0\">\n <button type=\"button\" class=\"video-modal-close close\" data-dismiss=\"modal\" aria-label=\"Close\">\n <i aria-hidden=\"true\" class=\"fas fa-times\"></i>\n </button>\n <div id=\"iframe\"></div>\n </div>\n <a class=\"text-decoration-none\"\n href=https://www.bitdegree.org/"https://www.youtube.com/c/CryptoFinallyExplained?sub_confirmation=1\%22\n rel=\"nofollow noopener\" target=\"_blank\">\n <div class=\"modal-footer p-0 d-block bg-white\">\n <div class=\"row justify-content-center m-0\">\n <div class=\"col-3 col-md-4 col-lg-2 p-0\">\n <img class=\"w-100 h-100\" src=https://www.bitdegree.org/"https://assets.bitdegree.org/crypto/assets/crypto-subscribe.jpg/" alt=\"Subscribe\">\n </div>\n <div class=\"col-9 col-md-8 col-lg-2 px-0 d-flex\">\n <div class=\"modal-subscribe w-100\">\n <p class=\"m-0 mt-1 mr-3\">SUBSCRIBE<br>\n <span class=\"m-0\">ON YOUTUBE</span>\n </p>\n </div>\n </div>\n <div class=\"col-12 col-md-12 col-lg-8 p-0 text-center d-flex justify-content-center align-items-center\">\n <div class=\"modal-subscribe-text\">\n <h4 class=\"m-0\">Understand crypto with ease</h4>\n <span>New explainer videos every week!</span>\n </div>\n </div>\n </div>\n </div>\n </a>\n </div>\n </div>\n</div>\n<h2>Options of Investing in Crypto</h2>\n<p>Investing in crypto is like a Swiss army knife. It can have many shapes and forms, but it all boils down to expectations of generating a return on investment. The most popular form of it - purchasing digital coins - is only the tip of the iceberg, since there are many more ways to achieve this goal.</p>\n<p>But let's begin with the classics - first on the list is simply buying and hodling crypto.</p>\n<h3>Buying Cryptocurrency & HODLing</h3>\n<p>In technical terms, buying crypto refers to acquiring a specific digital coin (or token) by buying it for traditional fiat currency, be it dollars, euros, or something else, or exchanging other cryptocurrencies for it.</p>\n<p><img style=\"display: block; margin-left: auto; margin-right: auto;\" title=\"How to invest in crypto: Buying crypto from exchanges.\" src=https://www.bitdegree.org/"https://assets.bitdegree.org/crypto/storage/optimized/how-to-invest-in-crypto-01.jpg/" alt=\"How to invest in crypto: Buying crypto from exchanges.\" width=\"1000\" height=\"540\" /></p>\n<p>You can buy cryptocurrency on a CEX, a centralized exchange, like <a href=https://www.bitdegree.org/"https://www.bitdegree.org/crypto/goon/binance/" target=\"_blank\" rel=\"nofollow noindex noopener\"><strong>Binance</strong></a>, or a DEX, a decentralized exchange, like <a href=https://www.bitdegree.org/"https://www.bitdegree.org/crypto/goon/uniswap/" target=\"_blank\" rel=\"nofollow noindex noopener\"><strong>Uniswap</strong></a>. Keep in mind that, unlike centralized exchanges, you can't buy crypto for fiat money on decentralized platforms. But that's a different topic, so if you want to learn more, be sure to check out this section.</p>\n<p>So, essentially, investing in cryptocurrency by acquiring crypto is self-explanatory. <strong>You literally invest in a coin with the hopes that its price will increase over time</strong>, which will allow you to sell it and end up pocketing some profit. This is very similar to investing in companies in their early stages by buying their stocks and being able to sell them once the company makes it big.</p>\n<p>Or, to make it more simple, it's like obtaining an object just after it comes out and selling it later, when it becomes a rarity. A perfect example would be the first edition of Harry Potter. In 2021, a copy of the first edition of Philosopher's Stone sold for $471,000. Its value increased over time, and the owner was able to make a profit by selling it. The same applies to everyone who bought their <a href=https://www.bitdegree.org/"https://www.bitdegree.org/crypto/buy-bitcoin-btc/">Bitcoin for mere cents 10 years ago, and held on to it. Today, they are millionaires.</p>\n<p>But they wouldn't be if they didn't follow that one, essential principle of smart crypto investing. It's known as \"HODL.\" The expression was accidentally created in 2013, in a Bitcoin forum, where an enthusiastic crypto trader made a typo while trying to spell out HOLD. The funny mistake became part of the community's lingo, and today is known as the acronym for \"Hold On for Dear Life.\"</p>\n<p><img style=\"display: block; margin-left: auto; margin-right: auto;\" title=\"How to invest in crypto: HODLing.\" src=https://www.bitdegree.org/"https://assets.bitdegree.org/crypto/storage/optimized/how-to-invest-in-crypto-02.jpg/" alt=\"How to invest in crypto: HODLing.\" width=\"1000\" height=\"557\" /></p>\n<p><strong>HODLing has become a term used to describe the strategy of holding onto a particular cryptocurrency for a long period of time, rather than selling it.</strong> HODLing gets difficult when the price of a coin falls drastically. Most people run to sell it, while HODLers refuse to do so, hoping that, in the long term, the price will recover, and increase.</p>\n<p>Sometimes it’s irrational, sometimes, it doesn’t work out. It’s a bet, after all. But sometimes it works - just like someone was HODLing on that first edition of the Harry Potter book until its value skyrocketed, so do crypto investors HODL on particular coins, hoping to make a profit one day.</p>\n<h3>Mining</h3>\n<p>Moving on, let's take a look at mining, as a method of how to invest in cryptocurrencies.</p>\n<p><strong>Mining is the process of validating transactions on a blockchain</strong>, and earning rewards in the form of cryptocurrency for doing so. Mining requires specialized computer hardware for its computational power, and naturally, it uses a lot of energy. The nitty-gritty of the technical side of it would require an entire section to cover.</p>\n<p><img style=\"display: block; margin-left: auto; margin-right: auto;\" title=\"How to invest in crypto: Mining.\" src=https://www.bitdegree.org/"https://assets.bitdegree.org/crypto/storage/optimized/how-to-invest-in-crypto-04.jpg/" alt=\"How to invest in crypto: Mining.\" width=\"1000\" height=\"515\" /></p>\n<p>In its very essence, though, <strong>mining is a costly way of investing in crypto</strong>. Even though blockchains and their verification mechanisms differ, becoming a crypto miner is not something most people could afford. Therefore, various solutions were introduced, such as cloud mining.</p>\n<p><strong>Cloud mining</strong> is hiring a mining company to do the mining for you. You pay the company for their service, but in exchange, you give them an agreed-upon amount of the mined resources. Instead of buying and maintaining your own equipment, you simply rent hash power from a mining farm, and they do the job for you.</p>\n<p>It's important to note that this only applies to coins that are native to blockchains that run on the <a href=https://www.bitdegree.org/"https://www.bitdegree.org/crypto/learn/crypto-terms/what-is-proof-of-work-pow/">Proof-of-Work consensus mechanism. There are others, such as Ethereum's <a href=https://www.bitdegree.org/"https://www.bitdegree.org/crypto/learn/crypto-terms/what-is-proof-of-stake-pos/">Proof-of-Stake, and this brings us to another way of investing in crypto – staking.</p>\n<h3>Staking</h3>\n<p>For crypto freshmen, staking immediately gives off confusion, but for more advanced investors, it is something they don't ignore.</p>\n<p>Staking is rather similar to depositing money into banks. Sometimes, banks promise interest rates for those who are willing to deposit large amounts of money into them. It’s similar when it comes to staking. But it has a different purpose.</p>\n<p><img style=\"display: block; margin-left: auto; margin-right: auto;\" title=\"How to invest in crypto: Staking.\" src=https://www.bitdegree.org/"https://assets.bitdegree.org/crypto/storage/optimized/how-to-invest-in-crypto-06.jpg/" alt=\"How to invest in crypto: Staking.\" width=\"1000\" height=\"537\" /></p>\n<p>In the context of crypto, <strong>staking refers to locking up a certain amount of coins inside a blockchain</strong>, so that it could be used as collateral to support the operations of the network. It's a rather complex mechanism, and it differs from blockchain to blockchain. Nevertheless, its purpose is to help secure the network.</p>\n<p>This is achieved by the fact that <strong>stakers are the ones who receive the rights to validate transactions and compete to add new blocks to the blockchain</strong>. After having staked a required amount, stakers become the validators.</p>\n<p>For validating transactions, they receive rewards. Staking also works as a deterrent for malicious behavior. If a validator decided to engage in some shady business, they would be punished, as their staked assets would be confiscated.</p>\n<p>So, if you're doing good, you get rewards. Just don't get any funny ideas.</p>\n<h3>Decentralized Finance (DeFi)</h3>\n<p>The next stop on the ‘how to invest in crypto’ train is Decentralized Finance, or DeFi. It sounds so broad, that it looks like you could cover all ways of investing in crypto under this blanket-term. Yet, DeFi in itself is an emerging ecosystem of financial applications that provide new, less conventional ways of getting into crypto.</p>\n<p><img style=\"display: block; margin-left: auto; margin-right: auto;\" title=\"How to invest in crypto: Lending and borrowing.\" src=https://www.bitdegree.org/"https://assets.bitdegree.org/crypto/storage/optimized/how-to-invest-in-crypto-07.jpg/" alt=\"How to invest in crypto: Lending and borrowing.\" width=\"1000\" height=\"604\" /></p>\n<p>Among smart crypto investing opportunities, I shall emphasize <strong>lending and borrowing</strong> first. It's literally what it sounds like - DeFi lending and borrowing allow investors to lend crypto to others and earn interest, or - the opposite - borrow crypto and pay interest. Platforms like <a href=https://www.bitdegree.org/"https://www.bitdegree.org/crypto/goon/aave/" target=\"_blank\" rel=\"nofollow noindex noopener\"><strong>Aave</strong></a>, <a href=https://www.bitdegree.org/"https://www.bitdegree.org/crypto/goon/compound-finance/" target=\"_blank\" rel=\"nofollow noindex noopener\"><strong>Compound</strong></a>, and many others are offering these services.</p>\n<p>Another way of investing in crypto within the DeFi world is known as <strong>providing liquidity</strong>. It's thanks to liquidity providers that DEXs are a thing. When you're trading, swapping, or buying crypto on decentralized exchanges, the assets you're after don't just fall from the sky. They come from <a href=https://www.bitdegree.org/"https://www.bitdegree.org/crypto/learn/crypto-terms/what-is-liquidity-pool/">liquidity pools</strong></a> that exist thanks to those who decided to put their coins into them.</p>\n<p><img style=\"display: block; margin-left: auto; margin-right: auto;\" title=\"How to invest in crypto: Providing liquidity.\" src=https://www.bitdegree.org/"https://assets.bitdegree.org/crypto/storage/optimized/how-to-invest-in-crypto-08.jpg/" alt=\"How to invest in crypto: Providing liquidity.\" width=\"1000\" height=\"626\" /></p>\n<p>The richer the liquidity pools, the higher the volume of trades that can be executed, and by doing so, investors earn a fee from each trade that happens, thanks to the liquidity they provide.</p>\n<p>But liquidity could be provided not only to liquidity pools. Another method that includes gaining passive income from a similar tactic is called <strong>yield farming</strong>. It's similar to liquidity providing. Investors deposit their money into a DeFi protocol's liquidity pool, and earn money from all the trades that were possible thanks to this pool.</p>\n<p>But here, investors can also gain financial rewards in the form of newly issued tokens that are distributed to liquidity providers as a reward for their contribution. </p>\n<h3>Non-Fungible Tokens (NFTs)</h3>\n<p>The next method of how to invest in crypto are the famous NFTs, or Non-Fungible Tokens. <strong>NFTs are a type of digital asset that represents ownership of a unique item or piece of content, such as art, music, or any collectibles, in general</strong>. Even real estate or unique passes to events and community gatherings can also come in the form of NFTs. They can be bought, sold, and traded on various NFT marketplaces such as <a href=https://www.bitdegree.org/"https://www.bitdegree.org/crypto/goon/opensea/" target=\"_blank\" rel=\"nofollow noindex noopener\"><strong>OpenSea</strong></a>, Blur, Magic Eden, and others.</p>\n<p><img style=\"display: block; margin-left: auto; margin-right: auto;\" title=\"How to invest in crypto: NFTs.\" src=https://www.bitdegree.org/"https://assets.bitdegree.org/crypto/storage/optimized/how-to-invest-in-crypto-10.jpg/" alt=\"How to invest in crypto: NFTs.\" width=\"1000\" height=\"563\" /></p>\n<p>NFTs offer a new way to invest in digital art and other unique digital assets, and the investment part here looks <strong>very similar to investing in crypto coins</strong>. You try to buy low, and then wait for an opportunity to sell high.</p>\n<p>There's a term for short-term profit strategies when it comes to NFTs, and it's called <strong>flipping</strong>. Flipping refers to buying an NFT and then immediately selling it for a higher price. This can be a quick way to make a profit, but it's also a high-risk strategy, as the value of an NFT can be highly volatile.</p>\n<p>The opposite of flipping is hodling. I’ve already explained how hodling works earlier in this section. When it comes to NFTs, hodling means the same thing. Note that if you want to understand NFTs in-depth, there is a separate section about them - <a href=https://www.bitdegree.org/"https://www.bitdegree.org/crypto/learn/what-are-nfts/">check it out</strong></a>!</p>\n<h3>GameFi</h3>\n<p>And, finally, finishing off our list of the best crypto investing strategies, we've got one of the latest trends - GameFi. In a few words, <strong>it allows you to earn cryptocurrency by gaming</strong>. One of the most famous examples is <a href=https://www.bitdegree.org/"https://www.bitdegree.org/cryptocurrency-prices/axie-infinity-axs-price/">Axie Infinity</strong></a>. However, GameFi goes deeper than that.</p>\n<p><img style=\"display: block; margin-left: auto; margin-right: auto;\" title=\"How to invest in crypto: GameFi.\" src=https://www.bitdegree.org/"https://assets.bitdegree.org/crypto/storage/optimized/how-to-invest-in-crypto-13.jpg/" alt=\"How to invest in crypto: GameFi.\" width=\"1000\" height=\"572\" /></p>\n<p>If you really believe in a particular game, you can obtain, unlock, or buy NFTs of in-game items, which you can either sell later for a bigger price, or even rent out to someone else. Just like NFTs, but in-game.</p>\n<p>GameFi is still in its early stage. This industry could be the very next thing, or it could take a while until the gaming culture adapts to what Web3 can bring them. Therefore, it's safe to say that, when it comes to investing in GameFi, the risk is pretty high, and the future is yet to be clear.</p>\n<h2>Wrapping Up</h2>\n<p>As you can see, when it comes to different verified crypto investing strategies, you find yourself with a rather wide variety of choices, yet with no clear, single answer to how to invest in crypto. Yes, it's confusing at first, but that's not a bad thing. No matter what type of investor you might be, crypto offers many different possibilities that are likely to suit everyone's taste, skills, and character.</p>\n<p>Lastly, note that the aforementioned ways of investing in crypto differ in their technical complexity, the required level of knowledge, or simply, the amount of funds necessary in order to be able to participate in them.</p>","preview_url":"https://www.bitdegree.org/crypto/learn/how-to-invest-in-crypto","youtube_video":{"id":146,"channel_id":1,"sort":6,"video_title":"How to Invest in Crypto: 6 Rewarding Strategies (Animated)","description":"How to invest in cryptocurrency?\n\nCrypto investing comes in many shapes and sizes. Crypto investing strategies vary from buying cryptocurrencies, to mining, staking, or flipping NFTs. 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All Crypto From

Scratch!

Crypto 101 Handbook

Chapter 1: Blockchain

1.1

What is the Blockchain?
1.2

Anonymous & Decentralized Blockchains: The Cornerstone of Crypto
1.3

What is a Blockchain Transaction in Crypto?
1.4

The Different Types of Crypto Fees Explained
1.5

The Key Notion Behind the Concept of Bridging in Crypto
1.6

Different Types of Blockchains: What to Look Out For?
Chapter 2: Cryptocurrencies

2.1

What is a Cryptocurrency?
2.2

How Does Cryptocurrency Work?
2.3

Is Cryptocurrency a Good Investment? The Pros & Cons
2.4

Coin VS Token: How Do They Differ?
2.5

What are Stablecoins, Altcoins & Wrapped Coins?
2.6

Bitcoin: the Pioneer of the Crypto World
2.7

The Ultimate Blockchain for dApp Creation: Ethereum
2.8

What is Cardano and What is It Used For?
2.9

Shiba Inu: the Dogecoin Killer
2.10

Is Solana an Improved Version of Ethereum?
2.11

The Bridge Between Blockchains: Polkadot
2.12

Polygon: the Essential Scaling Solution for Ethereum
2.13

The Practical Use of Crypto
Chapter 3: Crypto Exchanges

3.1

How do Cryptocurrency Exchanges Work?
3.2

DEX VS CEX: Two Sides of the Crypto Exchange Industry
3.3

Crypto Day Trading: The Difference Between Buying, Trading, and Swapping
3.4

KYC & AML: The Key to Complying With Legal Industry Standards
3.5

From Fiat to Crypto: How to Buy Crypto for the First Time
3.6

Taking Profits: Turning Crypto Into Fiat
3.7

You’ve Got Crypto: What Can You Do With It?
Chapter 4: Crypto Wallets

4.1

What is a Crypto Wallet?
4.2

Hot Wallet VS Cold Wallet: Which One to Pick?
4.3

What are Non-Custodial Crypto Wallets?
4.4

Metamask: The Leading Non-Custodial Wallet
4.5

The Key Crypto Wallet Safety Practices: How Safe Can Crypto Be?
Chapter 5: NFTs

5.1

What are Non-Fungible Tokens (NFTs)?
5.2

NFT Trading: The Ins and Outs
5.3

Tips and Tricks of Choosing the Right NFTs
5.4

How to Store NFTs: Best Practices
5.5

How to Create Your Own NFTs?
5.6

Making Passive Money with NFTs
Chapter 6: dApps & Defi

6.1

What is Decentralized Finance (DeFi)?
6.2

DeFi 2.0: The New Version of Decentralized Finance
6.3

What Are dApps and How Do They Work?
6.4

Picking the Right dApps: Dos and Don'ts
6.5

Web 3.0: The Future of the Internet
6.6

What is the Core Purpose of Smart Contracts?
6.7

The Notion of a Decentralized Autonomous Ogranization (DAO)
6.8

What is the Goal of Staking Crypto Assets?
6.9

What is a Liquidity Pool and How Does It Work?
6.10

Automated Market Maker: the Cornerstone of the Decentralized Crypto Exchange Industry
6.11

The Main Yield Farming Techniques
6.12

Crypto Oracles: The Link Between Blockchain and Outside World Data
6.13

The Peculiarities of Decentralized Crypto Gambling
6.14

Metaverse: A New Perception of Reality
Chapter 7: Trading & Investing

7.1

Where Can You Trade Cryptocurrencies?
7.2

Investing in Crypto: What Investing Options Do You Have?
7.3

ICO vs IDO vs IEO: Which One is the One?
7.4

What are Crypto Airdrops and How to Get Them?
7.5

How to Get Free Crypto Assets?
7.6

What is Crypto Arbitrage: The Main Principles
7.7

What is FUD: How to Use It to Your Advantage While Investing in Crypto?
7.8

Investing in Cryptocurrency: How to Manage Your Risks?
7.9

What is a Rug Pull in Crypto?
7.10

How to Spot and Avoid Rug Pulls?
7.11

The Key Legal Techniques of Avoiding Crypto Taxes
Chapter 8: Crypto Analysis

8.1

Bearish and Bullish Markets: Do They Matter?
8.2

5 Best Crypto Technical Analysis Indicators You Must Know About
8.3

Technical Analysis: What are Candlesticks, Trendlines, and Patterns?
8.4

Crypto Tracking: How to Track Your Favorite Coins & Tokens?
8.5

Crypto Research Fundamentals & Social Signals: Your Daily Trading Strategy
Chapter 9: Mining

coming soon

Chapter 10: Crypto Terms

10.1

All Crypto Terms

Handbook Cover Page

Chapter 7: Trading & Investing

Investing in Crypto: What Investing Options Do You Have?

Did you know that buying fungible and non-fungible tokens, mining, staking, or participating in GameFi and DeFi are all ways to invest in crypto?

Medium

9 minutes

Watch Video

In this section, we're going to talk about all the different ways of how to invest in crypto!

Investing in crypto is a wide topic. It's constantly evolving, as new opportunities, strategies, and risks appear every now and then. There are different sections in this Crypto 101 Handbook which concentrate on particular methods of crypto investment, such as staking or mining. In this section, though, I’ll touch on them all, so you could have the full picture of this fascinating topic.

The question of how to invest in crypto is an interesting one, since there are many answers. It's enough to take a glimpse into the online crypto space, and you'll instantly notice how polarizing this debate can be! So, before forming your own opinion, you gotta get to know what these different ways are. It can get complex and confusing, but fear no more – that's what I'm here for!

In this section, we're going to discuss different ways of how to invest in cryptocurrencies. These include buying, mining, staking, the perks of Decentralized Finance (DeFi), Non-Fungible Tokens (NFTs), and finally, investing in GameFi. I'll describe each of them as we'll look into what makes them so different, on their own. Eventually, you'll see that, no matter your level of experience, crypto investing for beginners is also a thing!

Now, let's get to it!

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Options of Investing in Crypto

Investing in crypto is like a Swiss army knife. It can have many shapes and forms, but it all boils down to expectations of generating a return on investment. The most popular form of it - purchasing digital coins - is only the tip of the iceberg, since there are many more ways to achieve this goal.

But let's begin with the classics - first on the list is simply buying and hodling crypto.

Buying Cryptocurrency & HODLing

In technical terms, buying crypto refers to acquiring a specific digital coin (or token) by buying it for traditional fiat currency, be it dollars, euros, or something else, or exchanging other cryptocurrencies for it.

You can buy cryptocurrency on a CEX, a centralized exchange, like Binance, or a DEX, a decentralized exchange, like Uniswap. Keep in mind that, unlike centralized exchanges, you can't buy crypto for fiat money on decentralized platforms. But that's a different topic, so if you want to learn more, be sure to check out this section.

So, essentially, investing in cryptocurrency by acquiring crypto is self-explanatory. You literally invest in a coin with the hopes that its price will increase over time, which will allow you to sell it and end up pocketing some profit. This is very similar to investing in companies in their early stages by buying their stocks and being able to sell them once the company makes it big.

Or, to make it more simple, it's like obtaining an object just after it comes out and selling it later, when it becomes a rarity. A perfect example would be the first edition of Harry Potter. In 2021, a copy of the first edition of Philosopher's Stone sold for $471,000. Its value increased over time, and the owner was able to make a profit by selling it. The same applies to everyone who bought their Bitcoin for mere cents 10 years ago, and held on to it. Today, they are millionaires.

But they wouldn't be if they didn't follow that one, essential principle of smart crypto investing. It's known as "HODL." The expression was accidentally created in 2013, in a Bitcoin forum, where an enthusiastic crypto trader made a typo while trying to spell out HOLD. The funny mistake became part of the community's lingo, and today is known as the acronym for "Hold On for Dear Life."

HODLing has become a term used to describe the strategy of holding onto a particular cryptocurrency for a long period of time, rather than selling it. HODLing gets difficult when the price of a coin falls drastically. Most people run to sell it, while HODLers refuse to do so, hoping that, in the long term, the price will recover, and increase.

Sometimes it’s irrational, sometimes, it doesn’t work out. It’s a bet, after all. But sometimes it works - just like someone was HODLing on that first edition of the Harry Potter book until its value skyrocketed, so do crypto investors HODL on particular coins, hoping to make a profit one day.

Mining

Moving on, let's take a look at mining, as a method of how to invest in cryptocurrencies.

Mining is the process of validating transactions on a blockchain, and earning rewards in the form of cryptocurrency for doing so. Mining requires specialized computer hardware for its computational power, and naturally, it uses a lot of energy. The nitty-gritty of the technical side of it would require an entire section to cover.

In its very essence, though, mining is a costly way of investing in crypto. Even though blockchains and their verification mechanisms differ, becoming a crypto miner is not something most people could afford. Therefore, various solutions were introduced, such as cloud mining.

Cloud mining is hiring a mining company to do the mining for you. You pay the company for their service, but in exchange, you give them an agreed-upon amount of the mined resources. Instead of buying and maintaining your own equipment, you simply rent hash power from a mining farm, and they do the job for you.

It's important to note that this only applies to coins that are native to blockchains that run on the Proof-of-Work consensus mechanism. There are others, such as Ethereum's Proof-of-Stake, and this brings us to another way of investing in crypto – staking.

Staking

For crypto freshmen, staking immediately gives off confusion, but for more advanced investors, it is something they don't ignore.

Staking is rather similar to depositing money into banks. Sometimes, banks promise interest rates for those who are willing to deposit large amounts of money into them. It’s similar when it comes to staking. But it has a different purpose.

In the context of crypto, staking refers to locking up a certain amount of coins inside a blockchain, so that it could be used as collateral to support the operations of the network. It's a rather complex mechanism, and it differs from blockchain to blockchain. Nevertheless, its purpose is to help secure the network.

This is achieved by the fact that stakers are the ones who receive the rights to validate transactions and compete to add new blocks to the blockchain. After having staked a required amount, stakers become the validators.

For validating transactions, they receive rewards. Staking also works as a deterrent for malicious behavior. If a validator decided to engage in some shady business, they would be punished, as their staked assets would be confiscated.

So, if you're doing good, you get rewards. Just don't get any funny ideas.

Decentralized Finance (DeFi)

The next stop on the ‘how to invest in crypto’ train is Decentralized Finance, or DeFi. It sounds so broad, that it looks like you could cover all ways of investing in crypto under this blanket-term. Yet, DeFi in itself is an emerging ecosystem of financial applications that provide new, less conventional ways of getting into crypto.

Among smart crypto investing opportunities, I shall emphasize lending and borrowing first. It's literally what it sounds like - DeFi lending and borrowing allow investors to lend crypto to others and earn interest, or - the opposite - borrow crypto and pay interest. Platforms like Aave, Compound, and many others are offering these services.

Another way of investing in crypto within the DeFi world is known as providing liquidity. It's thanks to liquidity providers that DEXs are a thing. When you're trading, swapping, or buying crypto on decentralized exchanges, the assets you're after don't just fall from the sky. They come from liquidity pools that exist thanks to those who decided to put their coins into them.

The richer the liquidity pools, the higher the volume of trades that can be executed, and by doing so, investors earn a fee from each trade that happens, thanks to the liquidity they provide.

But liquidity could be provided not only to liquidity pools. Another method that includes gaining passive income from a similar tactic is called yield farming. It's similar to liquidity providing. Investors deposit their money into a DeFi protocol's liquidity pool, and earn money from all the trades that were possible thanks to this pool.

But here, investors can also gain financial rewards in the form of newly issued tokens that are distributed to liquidity providers as a reward for their contribution.

Non-Fungible Tokens (NFTs)

The next method of how to invest in crypto are the famous NFTs, or Non-Fungible Tokens. NFTs are a type of digital asset that represents ownership of a unique item or piece of content, such as art, music, or any collectibles, in general. Even real estate or unique passes to events and community gatherings can also come in the form of NFTs. They can be bought, sold, and traded on various NFT marketplaces such as OpenSea, Blur, Magic Eden, and others.

NFTs offer a new way to invest in digital art and other unique digital assets, and the investment part here looks very similar to investing in crypto coins. You try to buy low, and then wait for an opportunity to sell high.

There's a term for short-term profit strategies when it comes to NFTs, and it's called flipping. Flipping refers to buying an NFT and then immediately selling it for a higher price. This can be a quick way to make a profit, but it's also a high-risk strategy, as the value of an NFT can be highly volatile.

The opposite of flipping is hodling. I’ve already explained how hodling works earlier in this section. When it comes to NFTs, hodling means the same thing. Note that if you want to understand NFTs in-depth, there is a separate section about them - check it out!

GameFi

And, finally, finishing off our list of the best crypto investing strategies, we've got one of the latest trends - GameFi. In a few words, it allows you to earn cryptocurrency by gaming. One of the most famous examples is Axie Infinity. However, GameFi goes deeper than that.

If you really believe in a particular game, you can obtain, unlock, or buy NFTs of in-game items, which you can either sell later for a bigger price, or even rent out to someone else. Just like NFTs, but in-game.

GameFi is still in its early stage. This industry could be the very next thing, or it could take a while until the gaming culture adapts to what Web3 can bring them. Therefore, it's safe to say that, when it comes to investing in GameFi, the risk is pretty high, and the future is yet to be clear.

Wrapping Up

As you can see, when it comes to different verified crypto investing strategies, you find yourself with a rather wide variety of choices, yet with no clear, single answer to how to invest in crypto. Yes, it's confusing at first, but that's not a bad thing. No matter what type of investor you might be, crypto offers many different possibilities that are likely to suit everyone's taste, skills, and character.

Lastly, note that the aforementioned ways of investing in crypto differ in their technical complexity, the required level of knowledge, or simply, the amount of funds necessary in order to be able to participate in them.

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