Understanding Cryptocurrency trading
Cryptocurrency
they say is the beginning of a new era where our currencies have become digital.
In this article, you will get to know about the concept of Cryptocurrency,
Understanding Cryptocurrency trading, Cryptocurrency trading exchange, and the
advantages of Cryptocurrency.
Cryptocurrency
became famous because it uses encryption for every transaction made. Each
Cryptocurrency is kept in a unique digital wallet, In other words, there is a
developed coding system involved in storing funds and also transmitting
Cryptocurrency data between the ledger and Wallets. The main job of encryption
is for safety purposes.
Every
Cryptocurrency is supported by blockchain technology. A blockchain aims to
protect the fund and also record and monitor the transactions. Cryptocurrencies
are not monitored by any financial institution or the government. One important
thing to note in understanding cryptocurrency is that it doesn't work with any
banking system. It works with different coins but Bitcoin is the leading
cryptocurrency worldwide.
What is Cryptocurrency and why is it important?
Cryptocurrency is a virtual and digital currency; that utilizes cryptography in securing online transactions. Which makes it a bit difficult for a user to double-spend or forge. It also has a peer-to-peer network called blockchain; which monitors and organizes the funds. A blockchain is also a secure ledger for online transactions.
It's
a ledger where different services are operated; Like buying, transferring, and
selling. Cryptocurrency is different from physical money. Cryptocurrencies
are more decentralized; in other words, they are not issued by any financial
institutions or the government.
There
are various forms of trading cryptocurrency and they include:
Buying, Selling, and Storing
Every
user is entitled to purchase cryptocurrency from crypto brokers, central
exchanges, and individual currency owners. You can also sell to these people.
Buying,
selling, and storing can be done on the coinbase
platform, it is the best platform for that.
Once
you have cryptocurrency; it can be stored in a virtual or digital wallet.
They
are two terms for storing cryptocurrency; we have cold storage and hot storage.
Hot
storage is when the wallet is connected to the internet. This means that every
transaction made would be processed easily. But accessible to online frauds.
While cold storage is safe but the transactions are usually difficult.
Mining
Cryptocurrencies
are developed through mining. Mining is a complicated method.
When
it comes to mining, you will be asked to solve a rigid puzzle on your laptop or
computer; and you will be rewarded with cryptocurrency, Bitcoin is mostly the
major player.
Investing or transacting
Bitcoin
is one of the most popular cryptocurrencies that can easily be transferred from
one digital wallet to another. You don't need a computer for this, you can use
your smartphone or tablet. Once you have cryptocurrencies, you can buy and perform
different transactions like
- Exchanging them for cash
- Using them to purchase goods and services
- Sending and also receiving
If
you want to purchase with Bitcoin, you can do that with a debit card and that’s
the easiest way to do the transactions. These debit cards can also be used in
withdrawing money like an ATM. You can
also convert cryptocurrency to cash by using peer-to-peer transactions or bank
accounts.
Physical
cash is taken around and they can be exchanged. In reality, a Cryptocurrency
payment exists as a virtual or digital entry to an internet database that
describes a detailed transaction. When you transfer some funds, the money will
be recorded in a ledger.
Advantages of cryptocurrency
People
have always asked the question of why is cryptocurrency important. Since it is
not a physical currency, that made me do a compilation of the advantages of
cryptocurrency and they include:
- They are safe and private
- Inflation protection
- Transparency
- Accessibility
- Transaction costs
- Transaction speed
- Diversification
Types of Cryptocurrency
They
are various types of Cryptocurrency but we are going to discuss a few which are
the most popular ones are ones:
Bitcoin
Bitcoin is a leading cryptocurrency, it was founded in 2009. Bitcoin is said to be the first cryptocurrency and it's the most traded platform globally. Bitcoin was founded by Satoshi Nakamoto. The founders of Bitcoin do not have many identities online and no one knows if it's a single person or a group of people. But the founder remains Anonymous.
Litecoin
Ethereum
Ripple
Ripple
was founded in 2012, it's a public popular distributed system. The platform can
be used in tracking various transactions apart from cryptocurrency. According
to its online overview, the company behind Ripple has worked with financial
organizations and banks.
Cryptocurrency trading exchange
A
cryptocurrency trading exchange is a marketplace for buying and also selling
different types of cryptocurrency. It is important to know these platforms and also, understanding cryptocurrency trading involving these platforms. Below is the list of Cryptocurrency trading
exchanges:
Types of Cryptocurrency trading Exchanges
They
are two major types of cryptocurrency trading exchange; we have decentralized exchanges and the centralized exchanges
Decentralized exchanges: allows a user to perform peer-to-peer transactions without an intermediary
or a third party.
Centralized exchange:
they are trusted platforms where you can buy and also sell your cryptocurrency.
They work as a trusted intermediary in trading; they also act as guardians that
protect and also store your funds
This
sums up an explanation of the concept of cryptocurrency, understanding of Cryptocurrency
trading, Cryptocurrency trading exchange, and the advantages of Cryptocurrency.
I hope your journey to becoming a successful trader has just started.