Crypto Tools for Beginners: Security, Trading and Research
|– If you’re a crypto beginner, it’s important to understand how different tools can help you understand the space, make sound decisions and stay secure.|
– Crypto market data aggregation tools monitor market activity, and give you essential information about individual projects and the market as a whole.
– Crypto charting tools track trading patterns, enabling you to spot trends and familiar patterns or identify trading opportunities.
– Crypto tax reporting tools like ZenLedger enable you to keep track of your crypto trading portfolio, and stay compliant.
– Even as you’re trading, security is the foundation of your journey. Storing your keys offline is imperative in keeping your crypto secure.
The cryptocurrency industry is growing at a rapid rate. Over the course of 2021, the global cryptocurrency users rose from 106 million to 295 million in December. That’s a massive 178% increase in adoption in the space of just twelve months. So it’s little wonder that the crypto trading space is booming.
But crypto is a unique environment, with its own marketplace, unique underlying technology and questions relating to regulation and evolution.
But there are tools to help you! So in this article, we give you a guide that cuts through the noise. Here, we discuss the best tools for crypto trading, research, compliance and security – so you can get started.
Track the crypto market
As a newcomer to the crypto space, you might be interested in crypto trading. If so, then it’s good to understand the big picture. Getting familiar with the crypto market is important for anyone holding crypto assets, giving you important information that will help you decide how to manage what’s in your crypto wallet. Here are some key tools to help you.
1) Aggregate key crypto market data
Market data aggregators provide key trading metrics for the thousands of coins and tokens in the crypto ecosystem. These help you to understand the space as a whole, as well as the performance of individual coins, tokens and projects within that space. A few of the most valuable metrics you’ll be able to see here are:
- Coin or token value
Tracking the unitary value of a coin or token allows you to understand the value of your own holdings, spot trends, and objectively assess the performance of that asset relative to the wider market.
- Project Market Capitalization
Beyond the value of individual coins and tokens, tracking the market capitalization of the overall token supply allows you to gauge relative size of one asset next to another. This allows you to understand the big players in the space, and spot how big their piece of the overall pie is.
- Trading volumes
Trading volume is a measure of the value traded in a particular asset in a given period of time – this is a great way to understand what the demand is for that asset via inflows (the volume of trades buying in) and outflows (the volume selling out).
Market data aggregation platforms enable you to easily access all of these metrics, and many more.
Crypto tools such as Coingecko, Coinmarketcap, Glassnode, and Messari provide this fundamental data for every asset, making them an essential tool for anyone owning or trading crypto.
2) Visualize trends, identify opportunities
Beyond basic market data, charting tools are also extremely valuable in crypto trading, because they help you identify trading trends and price patterns for different assets over time. You can also perform technical analysis using years of prior data.
By using charting tools, traders can gain valuable insights into market activity, such as up-trends, down-trends or unusual patterns, and gain valuable insights into current circumstances.
TradingView is one of the most well-known charting tools in the industry. The platform offers customizable technical indicators and users can create bespoke charts for a specific time window, asset or type of analysis, allowing you to see visual representations of key data.
3) Track key news and policy developments
The crypto industry moves rapidly with new information changing the space almost daily. So getting relevant updates from websites that have a credible reputation is important to harvest vital information, such as news relating to the market, or to evolving regulation around crypto.
Using crypto-dedicated news platforms such as Cointelegraph and Coindesk provides news that is accurate, fair, and up-to-date. Other resources, such as the ‘What Bitcoin Did’ podcast and Dan Held’s The Held Report are great for discursive deep-dives into the industry and where it might be headed. And all of this will help you as you build opinions and ultimately make decisions about your own crypto activity/
We’ve got a comprehensive list of industry resources for crypto regulation and legislation, check it out for reliable crypto news sources.
4) Learn to read smart contracts
Blockchain is a public ledger of information that contains details of every transaction that has ever taken place for a particular blockchain or smart contract. For you, this can yield enormously valuable insights – but only if you know how to extract them.
Blockchain explorers such as Etherscan and explorer.Solana.com enable you to parse blockchain data for yourself. Here are a few of the details you’ll find there, and why they’re important.
If you’re investigating a project with a view to buying in, you’ll need to know the token supply of the smart contract – this is the only way to objectively assess how much of a share your own tokens will give you. Owning a thousand tokens in a project might seem significant – but if the token supply is ten million, it might mean something different.
Next question- how are those tokens distributed?
Say a project you’re following has a supply of 20 million tokens – but 8 million of them are all in the same wallet. You might want to think seriously about whether to buy in yourself. Why? Because having such a big portion of the total supply in one whale wallet makes the project as a whole unstable, since the impact of that one wallet selling all of their tokens would have price ripples for the whole token supply.
Having so many tokens in one place may even indicate a rug pull in the making.
In short, wherever you’re buying into, it pays (literally) to do your research and really understand the details of the project. Only then can you objectively assess its security, authenticity and potential for yourself. And you can access this detail by parsing smart contract data on a browser.
5) Manage your Portfolio: Crypto tax tools
Whatever your activity in the crypto ecosystem, managing your portfolio means making sure it’s compliant with law and regulation. Producing accurate reports of your taxable crypto activity is a big part of that.
But that can be tricky: in the blockchain system, it’s not always easy to understand which transactions are taxable events, or even what information is required for tax audits.
Luckily, there’s a tool to help you with that. ZenLedger is a crypto tax calculation tool that aggregates information from all of your blockchain transactions (even across multiple crypto platforms and protocols) allowing you to present all the relevant information for your tax audit.
It also creates all the necessary forms for your reporting so that you, your accountant, or your tax professional can work with the information easily. And ZenLedger can even be accessed directly from your Ledger Nano, via Ledger Live.
6) Secure your private keys: Crypto wallets
And finally – if you do just one of these things when you’re entering the space, it should be this.
Secure your private keys.
This is the most important decision you’ll make as a crypto trader or hodler, because it determines the security of all the crypto you own. No matter what happens, you will need a crypto wallet, but the type of wallet you choose has a huge impact on your security.
An offline key is the only key
The most prevalent threat you’ll face in crypto is from online hacks. These can penetrate your computer or phone via your internet connection. This means that securing your private keys within a digital interface on one of these devices (in a hot wallet, for example) will never truly keep your crypto safe.
For true security, it’s crucial to keep your private keys offline at all times – and this means using a device that is totally separate from your internet connection. Ledger hardware wallets do exactly this, securing your keys in a totally offline environment where even the most sophisticated hacks cannot reach them.
Using a hardware wallet means you can switch off and focus on learning everything else there is to know about the crypto ecosystem.
The tools of the trade
Whether you’re a crypto beginner or a long-term crypto trader, the space can be an overwhelming wave of information and security concerns – so knowing which tools are available to help you, and how to use them, is a goldmine for anyone embracing blockchain technology.
The tools above will help you get to grips with crypto trading data, crypto news, blockchain literacy, tax and crypto security – and if you’re stuck, Ledger Academy is on a mission to answer all the questions in between.