Cryptocurrencies. We talk about it all over the place, and for good reason: with Bitcoin as a proud representative covering a colossal unit amount, and the other digital currencies that are racing daily, there is enough to crystallize attention around the subject. But, beyond speculation and sometimes sensationalist media headlines, what really are cryptocurrencies?
To understand cryptocurrencies, it is essential to understand the concept of blockchain. Under this obscure term hides an operation in fact quite simple. The blockchain is a sort of gigantic digital ledger. This account book is heavily secured. As a result, each time someone wants to consult a transaction it contains, it has to be decrypted, which requires electrical and IT resources. Decentralization requires, it is the users who are called upon to validate transactions. They are called “minors”. But any work deserving of pay, these users had to be paid. This is the reason Bitcoin was created. Miners are therefore paid in Bitcoins for the work they do, i.e. decryption of the blockchain.
It is impossible to talk about cryptocurrencies without mentioning their starting point. It all started in 2008 with a certain Satoshi Nakamoto, whose real identity is still unknown, so much so that it is not known whether it is a person or an entire corporation. Still, this good Satoshi gifted us with a scientific and technical document of almost 10 pages, entitled “Bitcoin: A Peer-to-Peer Electronic Cash System”.
A complicated read if it is for those who are not really versed in somewhat technical digital practices, but who present and describe the principle of operation of the blockchain. A swear word that is not really one, because it is on this famous blockchain that we now hear all the sauces that a large number of current cryptocurrencies are based.
The idea of cryptocurrencies is to be able to serve decentralized applications. That is, applications that do not depend on a third party that will govern operations and other transactions (for example, an application that will manage file storage, or car races, financial transactions, etc.). It’s sort of a new model for creating, funding and operating software services, but decentralized – a very important word in the concept of cryptocurrency.
But can they be a promising trading commodity?
Trading is one of the most profitable and attractive investment transactions in the financial and stock market. Indeed, the trading trend is overwhelming the world and making investors and traders wealthy!
Today we are going to tackle the subject of cryptocurrency trading, this virtual currency is among the assets of the financial market. This article will, therefore, contain the details of this new exchange operation, but also the major advantages offered by cryptocurrency trading.
Cryptocurrency trading is actually speculation on the price of that currency, which can go down or up at any time. One of the major advantages of a cryptocurrency trading operation is the fact that it is characterized by extreme volatility, very interesting and which can make this investment one of the most profitable!
The cryptocurrency market has only entered the arena for a few years now, but it has interests and benefits that we will not find in the traditional financial or stock market under any circumstances. It is often said that the cryptocurrency market is very speculative in the short term, which means that the increase and decrease in the price of a cryptocurrency is remarkable over a short period (1 year for example). This volatility is often noticed when talking about an investment in anything related to new technologies, the latter are of remarkable speculative interest. The volatility of cryptocurrencies is one of the specifics that make this market so interesting and exciting, it gives traders the opportunity to position their investments well if they put in place good equity strategies.
The major advantages of a crypto transaction
From a liquidity point of view of the financial market, the cryptocurrency market is considered to be an illiquid market. This characteristic means that there are no specific platforms for carrying out these transactions. You have the possibility to invest in cryptocurrency and trade on different platforms; So this is the number one reason that this type of investment and this market is very volatile.
But it is just as possible to find trading platforms that allow cryptocurrency transactions to be executed quickly (very liquid) and for absolutely nothing (very low cost). This therefore has the advantages of cryptocurrency trading, but there are a lot of them that we tell you about below:
Through cryptocurrency trading, the investor has the opportunity to position themselves to sell or buy crypto with the expectation that the value of the latter will increase and then resell it.They can also use a Bitcoin trader app to increase their chances of success.
Cryptocurrency trading is a transaction characterized by leverage, this is a great advantage as it gives you the opportunity to invest and take a position in the market with a minimal amount compared to the estimated value of the transaction.
Cryptocurrency trading allows you to make very interesting and relatively large gains compared to what you put in when taking a position in the market.
A trading strategy is the key to the success of this kind of operation, but when it comes to trading cryptocurrencies, the trader will not need very in-depth prerequisites to be successful in this new operation.
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