The cryptocurrency industry is growing rapidly. During 2021, global cryptocurrency users will increase from 106 million to 295 million in December. In just 12 months, the adoption rate increased significantly by 178%. Therefore, it is not surprising that the field of cryptocurrency transactions is booming. But encryption is a unique environment, and it is important to understand the market, unique underlying technologies, and issues related to regulation and development. Here are some things that newcomers to the cryptocurrency field need to know.

1、 Tracking the Encryption Market

As a novice in the field of encryption, you may be interested in encrypted transactions. If so, familiarity with the encryption market is very important for anyone with encryption assets, which will provide you with important information to help you decide how to manage the content in your encryption wallet. Here are some of the most valuable indicators to understand:

1. Value of coins or tokens

Tracking the unit value of coins or tokens allows you to understand the value of your holdings, find trends, and objectively assess the performance of the asset relative to the wider market.

2. Total project market capital

In addition to the value of individual coins and tokens, tracking the total market capital of the entire token supply allows you to measure the relative size of one asset versus another. This allows you to understand the big players in this field and find out how much they share in the whole market.

3. Transaction volume

Trading volume is a measure of the trading value of a particular asset at a given time - it is a good way to understand the demand for that asset through inflows (buying volume) and outflows (selling volume).

2、 Visualize trends and identify opportunities

In addition to basic market data, charting tools are also very valuable in crypto trading, because they can help you identify trading trends and price patterns for different assets. You can also use data from many years ago for technical analysis.

By using chart tools, traders can gain valuable insights into market activities, such as upward trends, downward trends or unusual patterns, and obtain valuable insights into current situations. For example, TradeingView is one of the most famous charting tools in the industry. The platform provides customizable technical indicators. Users can create customized charts for specific time windows, assets or analysis types, allowing you to view the visual representation of key data.

3、 Track key news and policy developments

The encryption industry is developing rapidly, and new information is changing this field almost every day. Therefore, it is very important to obtain relevant updates from reputable websites for obtaining important information, such as news related to the market or news related to the regulatory evolution related to encryption.

4、 Learn to read smart contracts

Blockchain is a public information ledger, which contains details of each transaction occurred in a specific blockchain or smart contract. This can yield very valuable insights for you - but only if you know how to extract them. Here are some details you can find there:

1. Token supply

If you are planning to purchase a project, you need to know the token supply of the smart contract - this is the only way to objectively evaluate how much your own token can give you. Having 1000 tokens in a project may seem significant -- but if the token supply is 10 million, it may mean something different.

2. Token distribution

Suppose you are tracking a project with 20 million tokens, but 8 million of them are in the same wallet. You may want to seriously consider whether to buy by yourself. Because having such a large part of the total supply in one wallet will make the whole project unstable. If one wallet sells all tokens, it will cause price fluctuations in the whole token supply.

In addition, there are so many tokens in one place that may even indicate that the carpet is being made. Therefore, no matter where you invest, it is worthwhile to do research and really understand the details of the project. Only in this way can you objectively assess its security, authenticity and potential for yourself. For this, you can access these details by parsing the smart contract data on the blockchain browser.

5、 Manage your portfolio

Managing your portfolio means ensuring that it complies with laws and regulations. Making accurate reports of your taxable secret activities is a big part of it. However, in the blockchain system, it is not always easy to understand which transactions are taxable events, or even what information is required for tax audit. However, you can choose to use the encrypted tax calculation tool on this issue. It can aggregate information from all your blockchain transactions (even across multiple encryption platforms and protocols), allowing you to provide all relevant information for tax audit.

6、 Protect your encrypted wallet

This is the most important thing you need to do as an encryption trader or holder, because it determines the security of all your encryption. No matter what happens, you need an encrypted wallet, but the type of wallet you choose has a huge impact on your security. For this, the offline key is the only key.

The most common threat to cryptocurrencies comes from online hackers. These viruses can invade your computer or mobile phone through your network connection. This means that protecting your private key in the digital interface of these devices (for example, in a hot wallet) will never really guarantee your encryption security. Therefore, for real security, the key is to keep your private key offline; This means using a device that is completely separate from your Internet connection.

summary

To sum up, this is an introduction to the six issues that beginners of encryption need to study. However, whether you are a beginner of encryption or a long-term encryption trader, there may be an irresistible wave of information and security problems in this field. Therefore, it is a treasure for anyone who accepts blockchain technology to study which tools can help you and how to use them.