With Bitcoin trading around $60k during the last week or so, the online searches around cryptos have surged. Bitcoin is the pioneer of cryptocurrencies and most people think only of it whenever crypto trading and cryptocurrencies are mentioned. In the last ten years, many other coins have evolved and the market is today saturated with hundreds of different crypto coins.
You can use cryptocurrencies to buy goods or services or trade to get profits. Most people trade for profits. Blockchain technology is what has enabled the online trading of cryptocurrencies to thrive. The technology offers safe online transactions for the thriving unregulated market. Here’s more that you should know about cryptocurrencies.
Cryptocurrency started with the invention of Bitcoin about a decade ago. It is a method used to make online payments when buying goods or services. They operate under Blockchain technology which is decentralized to work in millions of individual computers around the world. The technology manages all cryptocurrency transactions most securely.
The technology is spreading around the world like wildfire and according to CoinMarketCao.com, there are over 6,700 individual cryptocurrencies trading in the market. The market is not regulated and as a result, anyone could invent their cryptocurrency and register it in the coin market for trading. Today, the total cryptocurrency value is estimated to be slightly above $1.6 trillion, making it a viable option for growing your wealth.
According to a buy dissertation service in the economics and finance niche, within about seven years, cryptocurrencies have gained popularity around the world. The main reason is that many people value it as the future currency. As a result, they are rushing to buy the coins in the hope that they will have enough once they become official currency.
There is not a central bank that regulates cryptocurrency, making the currency freely circulate dependent on demand versus supply. Blockchain technology seems to be more trusted and secure than traditional money platforms. Many more people are attracted by the speculative value of cryptocurrencies and want to make a quick profit.
Is bitcoin cryptocurrency?
Almost everyone new in the crypto market thinks bitcoin is not cryptocurrency. Others think bitcoin is the cryptocurrency and the other coins are not. This is just confusion because bitcoin can be easily called the leader of the cryptocurrency world.
Bitcoin was the first cryptocurrency to try trading in a decentralized system and was created by a mysterious figure called Satoshi Nakamoto. Since then, it grew in value more than 200 times.
The coin purely trades under Blockchain and it’s impossible to change a transaction once completed. Despite the great progress of bitcoin, all other coins are part of cryptocurrencies and can be traded just like bitcoin.
Investing in cryptocurrencies
As per a Do my assignment service, at the moment, many people are using cryptocurrency to trade in the coin market for a profit. Although they can be used to buy goods and services, not many people are using this option. The main reason behind this could be the way the currencies are fluctuating to an all-time high value. As the cryptocurrencies stabilize, more people will start using them to pay for goods and services.
Everyone around the world is free to own as many cryptocurrencies as they want. If you want to own some, the only way is to buy from the market. Some cryptocurrencies can be bought directly using the US dollar. However, most require you buy using bitcoin or some other cryptocurrency.
When buying any cryptocurrency, you must have a crypto account called a wallet. It is an application that holds your cryptocurrency. To get your wallet, you open an account through an exchange platform. An exchange is an online platform that enables you to buy and sell cryptocurrency.
Trading in cryptocurrency
To trade in cryptocurrency, you need to have a cryptocurrency brokerage account opened in one of the many trading platforms. Once you have your account ready, fund it through a bank wire transfer or debit card.
After your brokerage account is funded, study several cryptocurrencies and choose the best to trade-in. You may choose the main ones like Etherium and Bitcoin or the small coins if you want to wait for a few months before you sell.
Choose whether you want to purely speculate or keep your cryptocurrency for the future. Your brokerage account is different from your cryptocurrency wallet. The brokerage account is purely for trading but if you want to store your profits, you transfer them to your digital wallet.
Most popular cryptocurrencies
You can trade with any cryptocurrency in the market, but some are more popular than others. The more popular ones lead in market capitalization and are easy to get from the market. The popularity leader is Bitcoin, with a market capitalization of over $960 billion, followed by Ethereum at more than $220 billion.
The third position is taken by Tether at $33 billion, then Binance Coin at $30 billion, and the 5th position is taken Cardano with a market capitalization of more than $28 billion. Over time, some coins will do better and overtake others.
The legality of cryptocurrencies
Many governments around the world are yet to embrace cryptocurrencies as legal tender. Although the Blockchain technology is decentralized and you don’t need to be in a specific country to trade, some nations like China have declared the technology illegal.
If you are in the US, you can freely trade without fear that the government agencies will come for you. Most nations have remained numb on the trade but have allowed it to continue uninterrupted.
Even as the trading thrives, fraudsters have equally thrived and you need to be diligent before investing in any platform. Ask questions, search and establish how genuine each platform is.
Where to open a brokerage account
Many brokers offer trading opportunities in the cryptocurrency exchange. It is safer to open an account with more established and known brokers to minimize the risk of fraud. Some of the brokers are Coinbase, eToro, Robinhood, and TradeStation.
The cryptocurrency market is growing fast, with new crypto coins joining the market each year. In the next few years, the number of cryptocurrencies in the market could hit the 10000 mark. Many supporters believe the currencies are the future of the world economy and are buying to keep in their wallets. On the other hand, many governments believe that blockchains and cryptocurrencies are not up to any good and have refused to embrace the technology. People can only trade and watch what they will become soon.
Susanna Balashova is a marketing professional who has climbed the corporate ladder fast owing to her exceptional talent and innovative ideas. She regularly shares her ideas through custom essay papers and podcasts. She spends her free time drawing and sketching. You can reach out to her on Twitter and Linkedin.