If you’re reading our blog, then you might be somewhat familiar with the crypto market. It’s no secret that along with the rise of crypto assets grew the supply of exchange services. But you might still be asking, “What are virtual assets?” Virtual assets are a digital representation of value that can also be digitally traded and used for payments or investing. Virtual assets (or crypto) exchanges can also be roughly compared to stock exchanges, but instead of traditional assets, you buy and sell tokens, or tokenized assets.
Top exchanges offer both marketplace and custody for virtual assets, the latter being referred to as wallets. Don't be fooled by the term though - there's much more to being a wallet than just fitting in your pocket.
At the very least, history shows that wallets not hosted on an exchange are less prone to losing your money than those on exchanges, simply because exchanges tend to hold a lot of crypto, so they are more likely to be targeted by hackers. And also because not all exchanges are actually very good at securing your funds.
But are exchange wallets really wallets? What else do you need to know before engaging with the trading world?
Money on an exchange isn't really yours
The reality is your exchange account balance is just a number in someone's database. Protected by some tests and backups, exchanges still might experience issues that could lead to database corruption – and then it will be the customer service agent who has to guide you through the limbo of balance restoration.
Unlike exchanges, virtual asset wallets actually try to utilize what popularized Bitcoin in the first place – blockchain technology. Wallets don't keep a separate sheet to calculate who owns whom the money and use the underlying blockchain technology to take care of that instead. Every transaction is recorded by a global decentralized network. Just don’t lose your private key.
It is hard to choose a reputable exchange
Some exchanges try to be the frontrunners in customer safety and enable just a handful of different crypto assets, like the big five: Bitcoin, Ethereum, Ripple, Litecoin and Bitcoin Cash. Following demand, other exchanges expand their lists to house tokens that are in the Top 30 at a minimum. In extreme cases, exchanges might list hundreds of various virtual assets, sometimes of questionable quality. Why? It doesn't come as a surprise that exchange service providers profit from trading activities. Sometimes they accommodate tokens of new projects, becoming their gateway to the market. These projects do not always bring returns to their sponsors. Host a handful of such projects and the entire reputation of the exchange becomes compromised.
We've also seen exchanges struggle to manage their users' personal data as well. The inability to follow core regulatory procedures, like know-your-customer (KYC) and anti-money laundering (AML), can become lethal in the long run.
Exchanges are not novice-friendly
If you only just started to learn about Bitcoin, you probably need to start with an easy exchange. In fact, you actually don't need to know the difference between a limit, and stop-limit orders, to buy your first Ethereum, EOS or PLBT. Virtual asset exchange services primarily target traders, who usually need a wide array of instruments to maintain portfolios, follow strategies and above all – speculate.
But for normal people, complicated interfaces and unfamiliar terms will not help but will actually ruin the whole experience of virtual assets. Indeed, it can be challenging. Recent studies showed that in 2018, 66% of Europeans heard about crypto assets, yet only 9% of them bought some. One of the main reasons behind low investments is that people don’t know how virtual assets work. Normal people are familiar with "normal" money. And only very few exchanges allow the buying and selling of virtual assets for euros and dollars. Others rely on surrogates like Tether (USDT) or USD Coin (USDC) due to a lack of required licenses to offer so-called fiat (euros or dollars) trading services).
Normal people don't need such complexity. Just as they don’t go on Forex platforms to buy Pound Sterling to go on a city-break to London, normal people don’t need to go on an actual exchange to buy BTC or ETH either. That’s what retail brokers are for.
The OSOM way of trading virtual assets
We understand the frustration when it comes to picking the right service. It's easy to lose your head trying to figure out whether a platform is safe, offers what you’re looking for, and delivers transparent procedures. We get it, and because of that, we want to make this experience better. We don't think that the market needs another exchange, but instead the development of something completely different.
Start with a wallet
OSOM is the wallet of wallets. Our core goal is to let you store your assets in a secure environment where we take great care of your private keys so you don’t lose them along with real transactions over blockchains. It is easy to set up and hard to lose, and by nature is not limited to any particular currency or virtual asset type – a real multi-currency wallet for the era of globalized finance. It also allows you to link all your other wallets and exchange accounts so you can see your positions everywhere, anytime.
Already using two or more exchanges to access your assets? Great stuff, we do that all the time too! For your convenience, OSOM offers the option to connect the API keys of your favorite exchange accounts within our unified interface and give you full control over your funds. No complex configurations, just copy-paste the API keys and you're good to go.
Connect your bank
You don't need a special intermediary like PayPal or a credit card to convert some EUR to BTC - just deposit your euros to the OSOM exchange at no cost! Buy your Bitcoin or Ethereum, or sell them back if you want (one simple 1.5% conversion fee applies both directions). Withdraw euros right back to the same bank account. Once again, withdrawals are free.
Tap to trade
Complex interfaces and endless procedures are fun-killers. With OSOM, you just need to specify what you want, how much you want to spend, then just push the big blue button. There is no way to make it even simpler, we tried.
Don't want to trade manually? Hate to read charts, analyze market movements, or guess price direction? Well, soon you will not need to do any of that. We are working on our proprietary Robo Adviser technology, which can track your portfolio and adjust it automatically while you sleep.
Last but not least, you really don't want to worry about whether or not you can trust a service with your hard-earned money. In fact, you want the government to take care of that. That is why OSOM is licensed and compliant with EU regulations. Find our Authorisations numbers here.
Aside from the regulations to protect you, there are other things you might want to explore to ensure the maximum safety of your funds in the long run. For example, take a look at our 5 Tips On Buying Bitcoin.
The biggest barrier to entry in tokenomics is the lack of easy-to-understand and easy-to-use resources. The virtual asset world is complex, cluttered with jargon, requires substantial effort to understand and expert knowledge to stay safe. OSOM is trying to change that. We are not preaching the idea that everybody get involved with virtual assets. We are just doing our best to make virtual assets accessible to everyone.