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Types of Transactions

Types of Transactions

In the world of cryptocurrency, there are two distinct types of transaction that users are able to make even if they might not be aware of it.

An example of a value transaction would be sending one coin from one wallet to another. It’s a transaction that is done for no reason other than to trade, attain or send the value of the coin you’re trading.

On the other hand, a data transaction is simply an act of conversing with a smart contract. For example, if you take part in an ICO, sending Ether to the relevant smart contract will ensure you receive the custom token on offer when it is eventually released.

ICOs

While participating in an ICO is as simple as filling in your details and then sending Ether (and occasionally other coins) to a smart contract, there are a few rules that can keep you safe.

It is extremely rare for an ICO to accept Ether that has been sent from an exchange (Coinbase, Bitfinex, Binance), so potential investors should equip themselves with a compatible wallet and transfer their Ether to it before attempting to take part.

Ether’s official wallet, MyEtherWallet.com is usually considered perfect for this, however, it’s worth checking the FAQ of the ICO you’re interested in taking part in before committing.

Coin Swaps

We’ve gone over the basic concept of swapping the coins you hold in the Beginner’s section of the Safety and Security lesson. You can read it here.

All you need to do to trade your coins away from these services, thus avoiding a sizeable fee for the privilege, is find a buyer yourself. This way, you can arrange your own exchange rate with a human buyer.

Live exchange rates are available at a number of respectable websites, though they rarely match up. Negotiating an exchange rate is a fundamental part of exchanging cryptocurrencies, which means you shouldn’t let coinmarketcap.com or coingecko.com dictate the price you pay.

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