How to start Cryptocurrency Trading
I believe everyone should learn about what’s cryptocurrency trading. It is trending in tech and business space and that is why I have taken time to write about cryptocurrency. It is the future of money and the earlier you get involved the better.
WHAT IS CRYPTOCURRENCY TRADING?
Cryptocurrency trading is one of the most profitable businesses in the world right now and that is why it is always in the news.
Cryptocurrency is a virtual or digital currency that works on decentralized networks on blockchain and it is secured by cryptography making it possible to double spend. A cryptocurrency is a digital asset based on a decentralized network that can be distributed across a large number of networks. Encryption is used to secure the currency and it’s from that word “encryption” that the currency was given a name. Cryptocurrencies ensure a safe online payment by the use of tokens which is illustrated by ledger entries.
BUYING AND SELLING OF CRYPTOCURRENCY
In cryptocurrency trading, Buying and selling of cryptocurrencies are done exchange and a wallet app is used to store the cryptocurrency and keep it safe and if you are ready to withdraw the money that you used in purchasing the cryptocurrency, then you sell it to whoever that want to buy it or sell it for companies that need it.
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TYPES OF CRYPTOCURRENCIES
There are many types of cryptocurrencies but here are five (5) of them and these five are the most well-known among other cryptocurrencies.
- BITCOIN (BTC)
Bitcoin is the most common cryptocurrency and the first inverted crypto. It was invented or discovered in the year 2009 as an open software by the author of the white paper, Satoshi Nakamoto. Bitcoin is a decentralized digital cryptocurrency that you can buy, sell, and even exchange without any intermediary or bank. The limit of Bitcoin is twenty-one million. Every transaction made on bitcoin is visible to everyone because it is on a public ledger, therefore, bitcoin transactions can’t be faked or reversed. Since when bitcoin has been launched in 2009, the value of Bitcoin has increased dramatically. Due to its dramatic increase in value, people are now using it as an opportunity for investment.
- LITECOIN (LTC)
Litecoin is a peer-to-peer digital currency that is decentralized i.e. it is not controlled by the government. Litecoin was discovered by a former Google engineer named Charle Lee in 2011, two years after bitcoin was invented and it is the ninth-largest cryptocurrency in the world. Litecoin works almost the same way as bitcoin. Even, it was that Charles Lee launched litecoin in one of the bitcoin programs. It is also based on an open network whereby its transaction is visible t everyone. As earlier said that Litecoin is almost the same as Bitcoin but they differ in some aspects. For example, there is faster block generation in Litecoin and also, Litecoin uses a script that Bitcoin doesn’t use. The limit of Litecoin is eighty-four million.
- ETHEREUM (ETH)
Ethereum is an open-source platform that uses blockchain just like other cryptocurrencies. It is the blockchain that is used to create a decentralized digital application. Ethereum was invented in 2017 by a Russian Canadian programmer named Vitalik Buterin. Ethereum is the third-largest cryptocurrency in the world. It operates through the use of a global network of computers that works together as a supercomputer.
- BITCOIN CASH (BCH)
Bitcoin cash was created for transactional cryptocurrency that serves as an electronic cash payment system. Bitcoin cash came into existence in 2017 to solve bitcoin transaction speed issues by creating more blocks of the transaction on the blockchain than Bitcoin. Also, bitcoin can be used to purchase gift cards.
- ZCASH (ZEC)
Zcash is the type of cryptocurrency with a decentralized blockchain that provides anonymity for its users and transaction. It increases the privacy of its user using zero-knowledge proof to confirm transactions without revealing the user’s privacy. The limit of Zcash coin is twenty-one million.
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ADVANTAGES OF CRYPTOCURRENCY TRADING
- Transactions: Cryptocurrency has made transactions easier whereby no charges, no brokerage fee, commission e.t.c. In cryptocurrency, transactions are one to one affair that is done on peer to peer network, therefore, only the transaction details are visible to the public not the process of the transaction.
- Transfer of assets: Cryptocurrency can be used to transfer bulk assets without issues.
- Transactions are confidential: In the banking system, if you have more than what you need to have in your account, that is, your account balance has exceeded the bank limit, they might go through your account. Also, if you transferred a large amount of money is transferred from or received into your account, you will be queried. But in the case of cryptocurrency, transactions are in between the two parties. Nobody will query you over your transactions or go through your account.
- Cryptocurrency makes it easy to do perform international transactions. Since cryptocurrency works on peer-to-peer networks, it is easy to conduct international transactions without the problem of currency exchange fluctuation.
- Individual ownership: In cryptocurrency, nobody can have access to your transaction or account. You will be the one to take full control of your account but in the banking system, your account might be closed if it’s suspected of wrong actions.
- Strong security: A cryptocurrency account is very strong in terms of security to the extent that if you made a transaction, it can never be reversed. Also, the strong encryption employed in the blockchain and the transaction make it safe from fraudsters.