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Investing in crypto? Here's how to begin

·4 min read
How to introduce smart security strategies to protect your investment (Yahoo Creative Studios)

Paid for by Ledger

Once a fringe investment, cryptocurrency has exploded into the mainstream. Not only are everyday investors considering creating a crypto portfolio, but banks and public and private companies have added crypto to their balance sheet, bringing it even closer to the mainstream.

But crypto is different from other assets. Anchored on the blockchain — a decentralized database that cannot be destroyed or tampered with, owned by everyone and no one — crypto has different security best-practices than other investments. That’s why it can be a good idea to make sure you understand the special security considerations that come with owning crypto before you buy it. Having smart security practices in place from the start can provide fewer headaches and more opportunities as you grow your crypto.

Have a strategy to protect your key

Investing in crypto may be like learning a new language. While there’s a lot you can learn as you go, it’s critical that investors know where their crypto is and how to access it. Unlike a traditional investment portfolio, where you may create a password, your crypto is accessed through a series of keys — a public key and a private key. The public key is like your address — it’s how crypto can be sent and received. Your private key gives you access to that crypto. Your key is your most precious asset when you own crypto. If someone else gets a hold of it, then they have access to your assets. That’s why it can be problematic to keep your key on an online exchange. While some online exchanges may “hold” your key for you, keeping it on an exchange could make you vulnerable to security issues or hacking.

Because your key is so precious, crypto investors often prefer keeping their key off the cloud. One solution: A hardware wallet, like the ones developed by crypto technology company Ledger. This is a USB-like device that keeps your key safely offline. This creates isolation between your key and your phone or computer, which could be vulnerable to hacking.

Choose the right platform

In the early days of crypto, investors had to have a fair amount of cyber-savvy to participate in crypto exchanges. Now, user-friendly platforms have emerged to make it seamless to buy and trade crypto. Some platforms will manage your private keys for you, but investors may still be juggling multiple platforms, passwords and exchanges in order to access all of their assets.

Ledger has created a global solution to help crypto owners: a hardware wallet combined with an app, Ledger Live. The hardware wallet secure your private keys, while Ledger Live is a platform that gives you full access to your crypto and many crypto services.

Ledger Live is an all-in-one solution that allows you to manage all your crypto — over 1,800 coins and tokens — in one place. Among other things, participating on the Ledger Live platform makes it seamless to buy or exchange your cryptocurrency. This can be a way to diversify your portfolio and actively participate in the crypto market — without having to manage multiple platforms.

In addition to providing a platform to buy, send and exchange crypto, Ledger Live provides access to the world of Decentralized Finance (DeFi). DeFi is the umbrella term for crypto and blockchain based financial solutions that aren’t connected to a mainstream financial intermediary like a traditional bank. As DeFi applications and use cases evolve, it’s important to choose a platform that allows you to use your assets beyond just buying and exchanging.

Crypto is designed to evolve

New uses for crypto are regularly emerging within the culture. For example, non fungible tokens, or NFTs, have redefined and restructured the concept of art with the introduction of digital tokens that are bought exclusively with crypto.

While you may not have a desire to own an NFT (yet) this crypto usage may have implications in the way you participate in the world — not just investing — in the future. For example, some European football clubs offer crypto assets for fans to purchase, which provide voting rights for fans on aspects of the club’s membership.

Ledger offers opportunities to participate within the wider world of crypto — without leaving the platform. By offering secure access to decentralized finance (DeFi) apps, Ledger provides an all-in-one portal that can allow you access to the larger DeFi world, as well as provide a hardware space to secure any NFTs, should you decide you want to add them to your crypto investment portfolio.

Crypto can be a “learn as you go” type of investment experience. Having the proper security features in place from the beginning, and investing through a dynamic platform that anticipates the future of crypto, can help you confidently grow your portfolio as an investor and gives you the flexibility to explore and expand your knowledge (and your assets) all in one place.

From Ledger

Founded in 2014, Ledger is the all-in-one digital asset management solution serving retail and institutional clients in 200 countries. By combining a hardware wallet, which provides security, with the Ledger Live app, which provides access to crypto-currency services, Ledger offers consumers the easiest way to start their crypto journey while maintaining full control over their digital assets. Their newest YouTube video series, "Down The Rabbit Hole," explores how crypto changes the world, the economy and the culture around the globe.

Exchange, lend, and other crypto transaction services are provided by third-party partners. Ledger provides no advice or recommendations on use of these third-party services.

This article was paid for by Ledger and created by Yahoo Creative Studios. The Yahoo Finance editorial staff did not participate in the creation of this content.