Paper Trading is often done by new traders or by experienced traders working on a new trading strategy.
Paper Trading is when Traders will analyse charts and document trades as if they were submitting live orders, but then not submitting the orders to the exchange. Traders will manage this "virtual trade" the same as they would if the trade was live.
For beginners or for those wanting to test a new strategy, we recommend a slight variation to paper trading, that is starting with very tiny position sizes such as 50c or $1 per trade, trading using a real account, using all the tools that you would use to trade normally. Then once you are happy with your results using those smaller position sizes, move to larger position sizes. Although trading with small position sizes doesn't help determine whether a trading strategy has enough liquidity, neither does conventional paper trading.
One big benefit of crypto is that you can effectively "paper trade" this way on any platform, and learn the platform fully before trading with larger position sizes. As you become more proficient all you need to do is "move the decimal point" on the size of your trades, everything else should remain very much the same.