How to Buy Tron Crypto (TRX)
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Tronix, or TRX, is the cryptocurrency associated with the decentralized blockchain network Tron. With over 92 billion TRX tokens in circulation, it has become one of the most popular cryptocurrencies available on the market.
Tron’s objective is to provide a more cost-effective space for sharing digital content like music or videos. In 2018, shortly after launching, it acquired the file-sharing site BitTorrent. However, like many other cryptocurrencies, Tronix is not without risk and controversy.
How to buy Tronix
Investors looking to purchase TRX tokens will need to follow four steps:
1. Decide whether to invest in Tronix
Like any other investment, purchasing and owning cryptocurrency carries risk. While Tronix has performed well in recent months, it is not immune to the rapid changes in value that have plagued the cryptocurrency market. As of this writing, it's about 6 cents per token, almost 800% up from its all-time low, and about 80% down from its all-time high.
If you’re the proud owner of one individual TRX token, then price fluctuation isn’t much to get excited about, but with a large investment, those changes can represent potential significant gains or losses. What if you decided to buy $10,000 worth of TRX tokens? What about $100,000? Volatility in the cryptocurrency market can be extreme, so it’s important for beginner investors in the market to understand what’s at stake. Gains can be very exciting, but losses can be devastating if your investment goes the wrong way.
Additionally, there has been some controversy related to Tron’s leadership. Tron’s founder and former CEO, Justin Sun, has been accused of copying code from other cryptocurrency projects. The former CEO addressed these allegations on Twitter by saying volunteers had badly translated his writing and left out important details. Critics of Tron still allege plagiarism in Tron’s whitepaper coding equations. For would-be investors, this controversy could be a red flag.
2. Find a place to purchase Tronix
Tronix is a widely circulated cryptocurrency, so investors can find and purchase it on many different platforms. If you’re new to cryptocurrency, you’ll need to choose an exchange to trade on. Some traditional brokerage firms will also allow crypto trading, but you’ll need to check to see what’s available. There are several exchanges to select from, but they can be broken down into two broad categories:
Centralized exchanges act as a broker for transactions between cryptocurrency traders. TRX tokens are available on many popular centralized exchanges including Binance, Kraken or FTX.US. Similar to a traditional brokerage firm, these exchanges act as a third party and provide supervision for all transactions taking place on the exchange. In return for the added security, they will generally charge investors a fee for each transaction. Third-party oversight can help investors feel more comfortable with trading security, and they are fairly easy to use. Investors who are new to cryptocurrency may want to start here, as centralized exchanges are far less complex than their counterparts. On the downside, they are a common target for cyber hackers due to the large number of transactions being carried out in one place.
Decentralized exchanges provide a platform where transactions take place on a peer-to-peer basis, which is commonly referred to as P2P. In other words, decentralized exchanges cut out an intermediary to avoid higher fees for each transaction, and P2P trading on blockchain greatly reduces the risk of a cyberattack. However, without the protection of third-party supervision, investors have little recourse if a transaction goes wrong. Decentralized exchange usage requires a good amount of technical expertise and is best suited for investors with more experience in the cryptocurrency market.
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3. Decide how to pay for Tronix
Once you’ve established an account at an exchange, you’ll need to fund your account to start trading on the platform. There are a few ways to deposit assets into your new account:
Deposit cash: This is the most straightforward option for beginners in the crypto space. Simply deposit cash from a bank account into your new account on the exchange. Most exchanges will accept deposits via wire transfer, debit card or ACH transfer. Once the cash has settled in the account, you’ll need to place an order to purchase TRX. After the trade goes through, you’ll officially own TRX.
Deposit cryptocurrency: More experienced cryptocurrency investors can transfer digital assets to an exchange account where TRX is available for purchase. Once the account is funded with digital assets, you can exchange your existing cryptocurrency for TRX.
Use a credit card: You can use a credit card to purchase cryptocurrency only if both your bank and the exchange allow it. A few platforms, such as CEX.io, Kraken and Binance, allow this method of payment. Most banks will view this transaction as a cash advance, which can incur high fees. Furthermore, using credit to purchase a volatile asset like cryptocurrency can lead to significant losses, as investors may find themselves with fees and interest charges they might be unable to pay back and end up in debt. Due to the extreme risk involved with this method, it probably isn’t suitable for most investors. Always err on the side of caution, and be sure to do some research before making any decisions.
4. Purchase and store Tronix
After purchasing TRX tokens, you must decide where to store your assets. Most centralized exchanges will allow you to keep cryptocurrency in your exchange account. This method involves the least amount of effort, but keeping digital assets at an exchange leaves your account vulnerable to cyberattacks or losses if the exchange closes down or faces liquidity problems.
Crypto wallets are a more secure method used for storing digital assets. There are two different types of cryptocurrency wallets to choose from — hot wallets and cold wallets:
Hot wallets maintain some connection to the internet, which makes it easier to access digital assets quickly but also leaves your wallet exposed to a potential hacker.
Cold wallets are storage devices that you have to physically possess to access your digital assets. They do not maintain a connection to the internet, which removes the threat of a cyberattack, but makes it less convenient to access the contents of your wallet if you’re in a hurry.
Each wallet comes with a numerical key code that is used to verify ownership and keep your digital assets secure. If you get a wallet, it’s important to keep this code in a safe place where you have access to it. If you ever lost your private key, you would not be able to prove ownership and would effectively lose the contents of your wallet.
Disclosure: The author and editor held no positions in the aforementioned investments at the original time of publication.