What Are Cryptocurrencies?
It is quite possible that many of us would have come across the term cryptocurrencies. However, compared to conventional dollar bills, credit cards, debits cards, online payments and so on, there is no doubt that this is a comparatively new entity. The first cryptocurrency came into being 2009 and therefore it is just a decade old. It would therefore not be out of place to mention here that cryptocurrency is still at its infancy and fledgling stage. However, it does hold out lot of promise and the financial and commercial world is quite excited and upbeat about it. Though there are many, who are not very positively inclined towards cryptocurrencies, the market forces are certainly helping it to move forward at a brisk pace.
To put it in simple words, cryptocurrency is a form of digital currency. It has some built in cryptographic protocols. These protocols make transactions safe and it is extremely difficult to fake transactions. There is another unique feature about cryptocurrencies. There are no central banks or other such controlling authorities. Hence it is a totally decentralized form of digital currency. This is done with the help of blockchain and therefore it keeps it insulated from old and perhaps antiquated ways of governmental interference and control.
Bitcoin is the first cryptocurrency and it was created in 2009 by a person who uses his alias Satoshi Nakamoto. As of date it is the leading cryptocurrency with a market cap of around $125 billion. The price of one bit coin is around $7,305. According to estimates there are around 17.1 bitcoins in circulation.
Ethereum is another popular cryptocurrency launched on July 30, 2015. The market value of Ethereum is around $171 and the total number of coins in the market could have touched 100 million.
Finally, Litecoin is another promising cryptocurrency which has a price of around $115 per coin. The total upper limit of litecoin is 84 million. Litecoin was launched on October 13, 2011 and therefore it is around eight years old. In fact, it would be pertinent to mention here that Litecoin is one of the oldest cryptocurrency companies after Bitcoin. Hence, it certainly has quite a bit of history and reputation behind it.
What Is Cryptocurrency Trading and How It Work?
There are a few unique things about cryptocurrencies as far as their trading and working is concerned. To begin with these markets are totally decentralized and the coins are not backed or guaranteed by any central banks or issuing authorities. They run across the breadth and length of the world using the computers and the connectivity that the internet and worldwide web.
However, like normal currencies it is possible to buy and sell these digital currencies. There are exchanges which allow buying and selling of these currencies. For the purpose of safety and security these forms of digital currencies are stored in wallets. We also need to understand that there are no physical currency notes or coins as far as crypto currencies are concerned. You will only have shared digital record as a proof and record for ownership of these forms of currencies. These are stored in the form of a blockchain.
Whenever there is a need for a user to send a cryptocurrency unit to another entity, it is sent to the digital wallet of the other person. The process is considered to be completed only when the receiving person has verified and added it. This process of verification and adding is referred to as mining. Mining is the process by which new cryptocurrencies are created.
The end user of cryptocurrencies would do well to trade through exchanges and also only with currencies that are genuine, proven and time tested. There are some reputed platforms like Atecs Capital who could be trusted when there is a need to buy and sell these currencies or also convert them into dollars and other forms of currencies.
You have to however, follow some steps and mandatory requirements before being able to trade with cryptocurrencies. These include opening an account with an exchange that deals in such currencies, opening a wallet, linking your bank account and other forms of digital payments to these cryptocurrency trading account and so on. Once these are in place you will be able to start trading in these currencies.
Cryptocurrencies Trading Vs Regular Trading and Investing
There is no doubt that people are still a bit hesitant and skeptical about trading and investing in cryptocurrency. While the knowledge levels are still at the stage of infancy, there are quite a few negativities floating around in the horizon. That being said, it is quite obvious that are there some unmistakable advantages and benefits associated with trading in this form of digital currency. Let us look at some of the obvious advantages and benefits of trading and investing in cryptocurrency.
It is going to be the future. Many may disagree and have quite a few things negative to say about cryptocurrencies. However, given the sheer force of the market, there is no denying the fact that cryptocurrencies are going to be the currencies of the future. It could well and truly become the universal currency and cut across countries, geographies and time zones. If offers huge profit potential. Though cryptocurrencies are volatile by nature, we need to understand that huge profits and volatility are interlinked. In terms of percentage gains, the returns could be astronomical and even gold and real estate would not be able to match it. However, you need to take informed and knowledge investment and trading decisions. You can keep your transaction discreet and secret when you decide to choose cryptocurrencies. This is of course not possible with other forms of controlled currencies as it exists today. Counterfeiting of cryptocurrencies is almost impossible. This is because each and every transactions of any cryptocurrency that happens around the world is recorded in computers across the world. Once the transaction has been entered into a computer, it cannot be changed by anybody and it becomes a permanent record. Further, since there is no physical movement of currencies in the forms of notes or coins, the risk of counterfeiting is totally ruled out. It is an option where you help yourself by helping others. When you buy cryptocurrencies you decrease the supply. This leads to increase in the value of the specific cryptocurrency and this positively impacts all those who have invested in it. Hence, it is a win-win situation for all the stakeholders.
Homework You Need To Do Before Trading In Cryptocurrencies
There are a few things you must learn before you actually get into marketing of cryptocurrencies. To begin with, you must understand that this is a new concept and therefore there are pitfalls and challenges that you may have to encounter along the way. Altough you can find ditailed guides at our Education Center Here are a few things you must know before you get into the actual trading.
Be aware of the exchanges. Exchanges are the places or platforms where cryptocurrencies are traded, bought and sold and it is the place where investments take place. There are two types of exchanges, i.e. fiat exchanges and exchanges for cryptocurrencies. The former is the place where you can trade your dollar bills or other forms of currencies and get it converted into this form of currency. On the other hand, you can sell your cryptocurrency stock and have it converted into dollars or pound sterling or other forms of legal tender money.
The next type of exchange is the one where you are allowed to trade one brand of cryptocurrency and get it replaced by other one and vice-versa. Hence, you must be aware of the concept of exchanges reasonably well because this is where all your buying, selling and investments happen. You can invest in gold, real estate, commodities by paying for it in cryptocurrencies and also ask buyers of commodities to pay you in this form of digital currency.
You must tread cautiously when getting into it for the first time and get started with a small amount so that you are taking a risk appetite that is within manageable limits. Continuous gathering of knowledge information about the various cryptocurrencies, their market cap, the movement of the coin prices over a period of time and other such things are extremely important and vital to say the least.
How To Technically Start Cryptocurrency Trading
There are a few steps to bear in mind before you technically start trading in cryptocurrencies. Here are the most important steps.
- Choose a good exchange for trading only in cryptocurrencies and check it’s reviews. There are quite a few of them including Atecs capital. You must research and get to know more about their reputation, their track record, and the various brands of cryptocurrencies being handled by them, the connectivity across the world and so on.
- You also need to open an account for transactions. In other words, if you are paying or receiving legal tender money for sales and purchases of cryptocurrencies, then this account is a must. Open your account with the exchange. This is a process that is simple and should not take much of a time. You have to give your basic demographic details and also link your bank accounts, credit card numbers and debit card numbers to the cryptocurrency account that you are opening with the exchanges.
- Ensure that you have a cryptocurrency wallet account opened. There are mobile, paper, hardware and desktop wallets available and in most cases you need a mobile and desktop wallet to get started. Wallets are the places where your cryptocurrencies are stored safely and securely.
Once these are in place you can get started with buying and selling.
As mentioned above, look for as many sources of information and always take wise and intelligent buying and selling decisions or investment decisions. These should be based on sound logics, facts and figures and not driven by hearsays and opinions.