Introduction into the world of the cryptocurrencies
We are probably not far from the truth in claiming that cryptocurrencies are the rising stars of today’s financial world. Now the biggest financial institutions and their leaders are talking about them, Top 10 Best Air Fryer In 2021 appearing in the mainstream media as well, and the price record of Bitcoin cryptocurrency was basically in all of the internet and the news. Even so, many still don’t know what it’s all about and how to get, for example bitcoin. Bitcoin and all other cryptocurrencies are nothing more than a digital currency tailored to the needs of the modern age. Electronic money that we can own and send freely and without restrictions, regardless of country borders.
At any time of the week or day, in maximum security, inexpensively, in a decentralized manner, and most often anonymously. This is not a currency tied to a currency issued by countries or to the central banks of countries. They run on a distributed network maintained by many thousands of computers, these are often called miners. It is the world’s first truly open financial network run by a predefined program code. That is, it is no longer politics and some decision-makers that regulate the processes, but the rules of the market and mathematics. Digital currencies, or cryptocurrencies, use blockchain technology, which can be used for a myriad of other tasks besides a smooth payment transaction. The blockchain records and validates all transactions and ensures the integrity of the network, all in a way that no one can change the details of a previous transaction.
The most popular cryptocurrencies are Bitcoin and Ethereum, although the ancestor of all cryptocurrencies, Bitcoin, is in the leading role. And so this currency is one of the best known and perhaps easiest forms of blockchain technology to use. A blockchain can also be interpreted as a digital shared ledger, with unique copies found on all nodes in the system, ergo on all affected computers. We can add any information in the blocks, for bitcoin, it is the amount of the transfer, the address of the receiving and sending party. All participants can check previous transactions and add new ones. Transactions are grouped into blocks for easier processing, and these blocks are chained. Hence its name.
How can someone trade with cryptocurrencies
Why is it worth trading cryptocurrencies? The technology is groundbreaking and extremely promising because of its wide range of uses, but most people are now looking for bitcoin and ethereum solely because of the big potential for astronomical profit. Currently, there are still problems to be solved in cryptocurrency technology, yet it is an incredibly evolving market that now holds quite enormous potential for everyone. As the technology is new and the market share is small, so the risk taken is high, but the profit is also astronomical. High volatility, i.e. a serious change in the exchange rate, provides a good opportunity for profit, as there have been examples of an increase or decrease of thousands of dollars in a single day. This is because the market share is small, so selling or buying by some “whale” will smoothly move the exchange rate in one direction or another. On the other hand, the ever-rising trend is a promise that we must keep an eye on.
However, many are still insecure and don’t even know how to jump into it. They have a little capital from which they want to buy bitcoin or ethereum, but they don’t know where to do it. The possibilities have changed tremendously compared to the situation a few years ago. Today, we can even buy bitcoin from a special ATM, if we want, and from there the given coin will go to our cryptowallet. Of course, to do this, we also need to create a cryptowallet first, which now takes roughly as much as installing a small program on our computer or an application on our phone. There are plenty of cryptowallets, but we’ll find what works best for us very quickly. If we have created the cryptowallet, then in addition to the automated solution, we can also buy bitcoin or even ethereum on the largest stock exchanges. Purchasing is like any online purchase, we can pay for it with a credit card, PayPal, or bank transfer. The difference is that bitcoin or ethereum bought on the stock exchange is also stored on the stock exchange by default, which is not usually recommended, so it is advisable to move cryptocurrencies to a unique cryptowallet from here as well.
Use brokerage firms to trade with cryptos
It is important to know about the wallets that there are also so-called hot and cold wallets. They don’t actually store money but contain information about the address you can use to send money. After all, only the addresses change in the blockchain, the money doesn’t actually leave the chain, it just moves from A to B. The so-called hot cryptowallets connect to the Internet, cold wallets do not, which is why they are considered more secure.
And then we didn’t even talk about the fact that a lot of international brokerage firms have already entered the cryptocurrency market, offering a simple opportunity to trade bitcoin. So that you don’t have to mine, you are simply speculating on exchange rate movements without buying, owning the product. So, if you think that the value of the cryptocurrency will rise, you can open a long position (you can buy it) or if you believe that the value of the asset will fall, you can open a short position (you can sell it). Besides, CFDs allow for leveraged investment, which means you don’t have to pay the full price of the product for the position, but rather provide 10% as collateral, for starters. The only thing you need to do is open a securities account with a brokerage firm and you can already start trading CFDs based on cryptocurrencies (BTC and others) on a trading account. It all takes about a few minutes and only needs a personal document.