Investing in Crypto Currencies: There is increasing attraction among investors around the world including India for investing in crypto currencies like Bitcoin. Even though there are some issue but they have generally given good returns to investors in the last few years. Cryptocurrency is a type of virtual currency which is mined by solving complex equations on a computer. Those who mine it, i.e. the miners, get crypto currency as a reward, but those who do not have technical understanding can also get crypto. Just as a company shares are bought and sold on exchanges like BSE and NSE, similarly cryptos like Bitcoin are bought and sold on crypto exchanges, that is, if you want to invest in Bitcoin, then you can easily invest money in it by going to any exchange.
How you can invest in crypto?
There are exchanges for investing in cryptos. To invest in crypto, first you have to go to the exchange site and register through personal details.
Sign up by visiting the crypto currency website.
Then after e-mail verification, a security page will appear in which there will be an option to select App, Mobile SMS or no security option.
After OKing the security parameters, you will get the option to select the country and KYC. Under KYC, one has to choose between personal and company, which is personal by default.
For KYC, you have to upload your personal information like name, date of birth, address, PAN card, Aadhar (driving license or passport) details along with photograph of PAN card, front and back side of Aadhar card.
After the account is verified, you can make purchases in crypto and pay for it from your bank account.
These are the charges on crypto trading
Exchange Fees: Exchange fees have to be paid to complete crypto buy or sell orders. Most cryptocurrency exchanges in India have a fixed fee model, but the final cost of the transaction depends on the platform on which the transaction is completed. In such a situation, better research should be done regarding which crypto currency exchange is charging the lowest transaction fees. Apart from the fixed fee model, crypto exchanges also have a maker-taker fee model. The person selling crypto currency is called maker and the person buying it is called taker. Under this model, fees have to be paid according to trading activity.
Network Fees: Network fees are paid to cryptocurrency miners. These miners verify and validate any transaction through powerful computers and add it to the blockchain. The exchange does not have direct control over network fees. If congestion on the network increases, meaning more transactions have to be verified and validated, the fees increase. Generally, users are allowed to set the transaction fees in advance while using third party wallets. But on the exchange it is set automatically by the exchange itself so that there is no delay in the transfer. For users who are ready to pay higher fees, their transactions are completed quickly and for those who have kept the fee limit low, their transactions may take some time to complete. Miners are given this fee for electricity cost and processing power.
Wallet Fees: Cryptocurrency is kept in a digital wallet similar to an online bank account. In most wallets, no fees are charged on deposit and storage of crypto currency, but fees have to be paid for withdrawing or sending it somewhere. This is basically network fees. Most exchanges offer in-built wallets. Crypto wallets provide the option to buy systematic crypto currency and recharge smartphones and DTS services through its integrated merchant gateway.
