Cryptocurrency has become so rewarding in the recent times that the traders who don’t even know its trading mechanism are anxiously participating at a growing scale. What makes it more ambiguous is its unseen presence, non-regulatory control and its skyrocketed values against the most powerful fiat currencies. We will unfold all these complicated myths, puzzles and riddles to get you going with a sufficient knowledge upfront. An Ultimate Beginners Guide to Cryptocurrency Trading.
Firstly, the digital currency is something that is not created in the banks; it is created online by using some software backed up by logic or a reason. This is the reason it is not found in hard form and we can’t see it or touch it.
A little knowledge is always dangerous!
Some of you might think that it made the whole thing more complicated to believe in its credibility, function and uses when it’s so non-existent nature. As we say, little knowledge is dangerous, reading the whole piece will give you a crystal clear idea of its working.
An Ultimate Beginners Guide to Cryptocurrency Trading
In the last few months it witnessed an increase of 25000 percent in its value and drew an abrupt vertical line on the price chart. This raise in the value turned fruitful for many traders in terms of earning huge profits.
Traditional Currencies vs. Fiat Currencies
Let’s draw a comparison between the production of traditional currencies and digital currencies to have some clear insight.
The most prominent difference between the two currencies is their production-count. Cryptocurrency, such as Bitcoin, will only be produced until it reaches 21 million coins. This inspires confidence in the traders to buy fearlessly and increases the purchase power which eventually helps them getting more profit.
On the other hand, Fiat currencies are printed in the central banks and you can’t keep track of the number of currencies printed or circulating in the market. Economists believe that printing of more currency notes causes inflation which results in loss of economy.
The second point is even more significant; cryptocurrency such as Bitcoin, which tops cryptocurrencies list, have a decentralized control which makes it more transparent and trustworthy since no one can influence or manipulate its value. It requires cryptographers or miners to mine more coins that come into the system. Mining process is complicated, time consuming and costly but at the same time it’s trusted.
Security of your funds is comparatively safer because of the use of Blockchain technolog
The next reason is even more compelling to establish its superiority to fiat currency. Security of your funds is comparatively safer because of the use of Blockchain technology. It is a public ledger where all the transaction records are stored but with a more secure mechanism that no one can steal your money.
Below are some of the features that rank it higher than the traditional currencies:
- No one can ever see how many coins you have in your account
- No one can temper the coins
- Also There is no tax application on digital currencies
- There are no intermediaries or third parties involved to delay your transaction and to charge you the commission fees.
- Additionally, no fear of theft if kept offline
Cryptocurrency for Dummies?
The beginner’s most asked question is “how to buy digital currency”; rightly so, because buying is the first activity for any trader to step in to the wonder land. Cryptocurrency for dummies is something complicated unless they don’t understand its mechanism. It is as easy as buying your grocery from a super store. Yup, just pay the amount and purchase your stuff. But the problem with buying e-currency is that you can never purchase it from a super store.
Cryptocurrency is available on the exchanges and can easily be bought against any paper currency, i.e. US dollars. Once bought, you can save them, sell them or make purchases on some specific outlets. The only thing you need to be considerate about is the repute of the exchange you are buying from.
What next after buying?
Let’s not think digital for a while and take a scenario of storing your fiat currency after withdrawing it. Obviously, we keep it in our wallets.
Cryptocurrency is available on the exchanges and can easily be bought against any paper currency, i.e. US dollars
Let’s come back to cryptocurrency and know that it is also saved in the wallets but these wallets are not kept in your pockets, these are e-wallets. It is simply an address directing you to the place where your e-currency is saved.
You can store these currencies on the wallets instantly available on the exchanges you buy it from but they are not the safest of options. These wallets are vulnerable to hacking so it is recommended to use secure wallets.
Precautions for saving your digital currency
It is convenient to store your currency on the online wallets but it has some serious repercussions. Online cyber threats are a major concern of cryptocrurency market. You can permanently lose them if your computer or mobile get faulty. There is no way you can reclaim your money if you have lost track to your wallet or it has gone faulty. There are many types of wallets but to simply our debate, we can say that Mobile wallets, Hardware Wallets and any online wallets are not a secure place to keep your hard earned money.
New traders must note that it is important to store your money on paper wallet because they are the safest of all the above mentioned wallets. As previously mention that wallets are just an address which routes you to where your currency is stored. This address consists of a private and a public key.
Private key is used for sending money to others while public key is used to receive money in your wallets. Now you will understand how we can store our currency on a paper wallet. Just write down your private and public key on a piece of paper and keep it on a secure and protected place.
Most in-demand Cryptocurrencies
Since we have known the basic methodology of trading, we should know that there are many digital currencies which are performing well in the market. The most traded cryptocurrency list is here: