Cryptocurrency is making headlines for numerous financial advantages for all the stakeholders. We will not use jargon words and complex definitions to confuse you. Our finger-holding guidance will take you through the complete process of crypturrency trading, its definition and other important aspects associated with it. This article will serve as a complete crypto guide for the beginners and the middle level traders. A Simple and Easy Guide to Understand Cryptocurrency Trading.
The first question that comes to mind when we hear about cryptocurrency is that what was the need to introduce a digital currency when it has such limited functions to perform as compare to the traditional currency?
The question carries weight!
Another Relevant Read: An Ultimate Beginners Guide to Cryptocurrency Trading
We cannot buy groceries from the super store, can’t pay utility bills and rents, can’t see them physically and can’t do any physical transactions using digital currency. It puts a big question mark on its usability! Our intuition says that people don’t buy anything that is not useful for them and that is not just our intuition, it is reality.
A Simple and Easy Guide to Understand Cryptocurrency Trading
Then why on earth it is produced and selling like hot cake?
Unveiling the truth
It has a function to offer, a unique function that is the need of the majority. Cryptocurrencies offer great security, anonymity, transparency and fast transaction without the involvement of any third party.
Well, that is not all.
It is because of the blockchain technology that no one can temper your financial data, no one can see your account details, no one can steal your money unless you don’t give away your private key to someone or hackers get access to your private key.
There are no commission fees on any amount of transaction you make through cryptocurrency. There is no central authority controlling the affairs of this market (like banks keep a check on each transactions and charge extra amount on each transaction). You can transfer digital currency in no time across the globe.
We hope you have got sufficient information to support the reason of production of e-currency by now! You will get more useful information that will help you step-in to this market with more confidence.
Evolution of Digital Currency
Let’s get out of the suspicions and doubts about this currency, lets accept that it exists even you can’t touch it or see it and lets agree that it is credible.
The most popular digital currency is Bitcoin, people have called it a bubble that might burst anytime. They also called it a ponzy scheme that will rob people off their money and run away. Despite all these allegation and negative perception, it gained the trust of banks, super stores and big technology giants. Microsoft has accepted it as a valid payment option and offered it to the customers who purchase their products online. There are several banks which have accepted Bitcoin as a legitimate payment option.
There are many regulatory authorities who have validated Bitcoin trading in their respective countries. It has proved its usability beyond its domain and it is used by many organizations now.
What is Initial Coin Offerings (ICOs)
Before the launch of any digital coin, token or currency, initial coin offering is initiated for the funding purpose. The purpose of the ICOs is to generate some revenue by selling out the digital tokens at subsidized rates. This revenue is then invested in the same system to strengthen it or to complete its development process before its actual launch.
Now a day, there are thousands of tokens offering ICOs with different business models and different technologies.
So ICOs is a process of selling the tokens before the launch of the project in order to make up the financial problems. By purchasing the initial coins, you become partner in the cause. However it is difficult to invest early on in something that has no obvious potential.
Why invest in cryptocurrency?
Bitcoin is the most volatile market and we all know that more volatility means more business opportunities. It started off with some suspicions and doubts but because of the immense increase in its value especially in the last quarter, it has jumped off from the exchanges and entered into other sectors of the market. It’s amazing progress has threatened even the most powerful of fiat currencies such as US dollar and it has not stopped there.
It is widely said that cryptocurrency is the future of currencies and it might replace the giant traditional currencies. One of the other reasons is that the value of digital currencies cannot be manipulated and there is no outside influence of any regulatory body or central banks.
Dos and don’ts of buying cryptocurrency
To move to our point, we should first know how to buy cryptocurrency. It is a fundamental question of all the beginners who are eager to buy digital currency and start their trading career. The answer is very simple. We can buy any type of digital currency from the exchanges where they are traded. There are plenty of exchanges from where we can buy them.
Below are few dos and don’ts of cryptocurrency trading:
- Always chose a reliable exchange
- Never disclose your private key to anybody (you can lose all your money if someone else access your wallet and there is no protection to claim your amount)
- Think twice before making any transaction (as you can’t undo once you have executed a trade)
- Don’t keep your amount in the online wallets (paper wallets are the most secure place to store your digital currency, online wallets are vulnerable to theft and you can become a victim of hacking)
- Don’t trade outside the exchange (there is no cushion if you are scammed by anyone of your native town)
- Secure your private and public keys (if you lose them, you will lose all of your money and there is no remedy to claim your amount)