If you’re reading our blog, then you are more or less familiar with the crypto market. It’s not a secret, that along with the rise of crypto assets grew the supply of exchange services. Virtual assets (or crypto) exchanges can 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 reffered to as wallets. Don't get tricked by the term, there's much more to being a wallet than just fitting the pocket.
At the very least, history shows that wallets not hosted on the exchange are less prone to losing your money than those at exchanges. Simply because exchanges tend to hold a lot of crypto, so they are bigger targets for motivated hackers. And also because not all exchanges are actually very good at securing your funds from mistakes.
But how to understand which is what - are exchange wallets really wallets? What else do you need to know before engaging in trading?
Money on an exchange isn't really yours
What the title says and 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 to guide you through the limbo of balance restoration.
Unlike exchanges, virtual asset wallets actually try to utilize what made Bitcoin a thing in the first place – the blockchain. 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, and as long as you trust the integrity of the Blockchain, you shouldn’t worry about losing your funds. Just don’t lose your private key.
It is hard to choose a reputable exchange
Some exchanges try to be the front-runners in customer safety and enable just a handful of different crypto assets, like the big five: Bitcoin, Ethereum, Ripple, Litecoin and (surprisingly) Bitcoin Cash. Following demand, other exchanges expand their lists to house tokens of at least the top 30. In extreme cases, exchanges might list hundreds of various virtual assets with sometimes 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. Not always these projects bring returns to their sponsors. Have a handfull of such unfortunate projects onboard and the reputation of the whole exchange becomes doubtful.
We've also seen exchanges struggling to manage their users' personal data as well. The inability to follow the core regulatory procedures, like know-your-customer (KYC) and anti-money laundering (AML), can become deadly in the long run.
Exchanges are not novice-friendly
If you've just started to learn about Bitcoin, you probably need an easy exchange to begin with. 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 actually ruin the whole experience of exploring 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 familliar with "normal" money. And only very few exchanges allow buying and selling virtual assets for real euros and dollars. Others rely on surrogates like Tether (USDT) or USD Coin (USDC) due to lack of required licenses to offer so-called fiat (euro or dollar) trading services).
Normal people don't need such a complexity. Just as they don’t go on ForEx platforms to buy Pound Sterling to go on a city-trip 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. You break your head over 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 change it. We doubted that the market needs another exchange, and realized that the only way to solve the issue is to develop something completely different.
Start with a wallet
Fundamentally, OSOM is the wallet of wallets. Our core goal is to let you store your assets in a secure environment where we take super-good care of your private keys so you don’t lose them and 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 multicurrency wallet for the era of globalized finances. It also allows you to link all your other wallets and exchange accounts so you can see your positions everywhere at anytime.
Already using two or more exchanges to access the assets of your interest? Great stuff, we do that all the time! For your convenience, OSOM has an option to connect 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 credit cards to convert some EUR to BTC - just deposit your Euros to OSOM exchange at no cost! Buy your Bitcoins or Ethereum, or sell them back, if you want (one simple 1.5% conversion fee applies both ways). Withdraw the euros right back to the same bank account. Again, withdrawals are free.
Tap to trade
Complex interfaces and endless procedures are fun killers. In OSOM, you just need to specify what you want to get, how much you want to spend and 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 that. Instead, we are working on our proprietary Robo Adviser technology, which can track your portfolio and adjust it automatically on the fly, while you can have your sleep at night.
Last but not least, you really don't want to ask yourself if 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 regulations in the EU. Find our Authorisations numbers here.
Besides 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 get started in tokenomics is lack of easy to understand and easy to use resources. Virtual asset world is complex, cluttered with jargon, requires efforts to understand and expert knowledge to stay safe. OSOM is being built to change that. We are not preaching the idea of everybody getting involved with virtual assets. We are doing our best so virtual assets become accessible to everyone.