Home 9 Forex Trading For Beginners 9 What is Cryptocurrency?

What is Cryptocurrency?

A cryptocurrency is a modern digital currency. It has several advantages in comparison with fiat currencies: it is decentralized, has no physical form, is used all over the world, and is visible at any time in the blockchain system. There is nothing that backs cryptocurrencies. They have some value only because people want it to have any. Banks, governments, or financial institutions cannot regulate cryptocurrencies. They can only affect them in some ways, but that does not always work.

Here is a checklist that points out why crypto is better than fiat:

  • Worldwide accessibility;
  • Minimum transaction costs and fees;
  • No commissions at all;
  • High level of security;
  • No need for owning a credit card;
  • Transactions do not involve third parties.

As you can see, all these points show that the cryptoworld is in a better position.

Understanding Cryptocurrency Trading

We have already mentioned that cryptocurrencies have no physical form. This means that when people use them, an online network called “the blockchain” is used. It is used as a freely distributed public ledger that works with cryptocurrencies of all kinds. All people access only this specific ledger when trading their coins. This results in easy identification of the currencies used and transparency.
Blockchain is quite popular because of its security, transparency, efficiency, and low-fees for transactions. Worldwide transactions become an easy and cost-efficient thing thanks to this technology.
Although blockchain and cryptocurrencies are still young, and not everyone is sure about the way of using them, the technology is used in more and more fields every day. Also, the number of users constantly grows. If we speak about trading, the most popular currency will be Bitcoin (BTC). It is by far the eldest crypto coin of all and is the best starting option for newcomers. People also use altcoins (alternative options) like Litecoin, Dash, Ethereum, Ripple, or others. Each of them has a different value and requires various strategies when traded. It will take some time to remember every currency. Take your time and join Maxitrade to start trading the most popular altcoins.

Ways to trade crypto coins

Online cryptocurrencies trading requires the user to create a Bitcoin wallet. Here the user has to top up his account with fiat (dollars, for example) to get BTC in return. You can start with altcoins, but then the creation of another wallet that is specified for them is required.
Doing all these steps is complicated for a newcomer. You will have to create a lot of other accounts for exchanging the currencies you get, remember a lot of passwords, face various obstacles. That is why an easier way exists.
Maxitrade offers users a simple and efficient way of trading cryptocurrencies online. You will not have to face any obstacles this way. All that is required is getting used to the platform (which is easy as it is quite intuitive!).
The first thing where Maxitrade is your option is the fact that we do not bother with crypto wallets. Our users make profits on contracts for differences (CFD). This means that traders earn money on price movements. These CFDs allow users to earn money without owning cryptocurrencies, leaving all the obstacles for the broker. In short, using CFDs simplifies the trading process. The user should only worry about profits or losses.
Another advantage is that you do not have to bother with creating an E-wallet to store all the digital currencies traded. When you use our platform, you can be sure that your trading activity and personal information is in safe hands. We use the SSL technology that encrypts all data. This way, everything is confidential enough.

What Should You Know When Trading Cryptocurrencies

Traders from around the world see cryptocurrencies as a way of evading inflation of fiat currencies. Also, adding cryptocurrencies to portfolios, people spread their investments and make sure they do not keep all the eggs in one basket.
The value of digital currencies can be proved by the fact that a lot of shops, companies, and even cafes accept it as a payment option. But one must always remember about the high volatility this field has.

Cryptocurrencies Around the Globe

Asia is one of the major continents that has approved the usage of digital currencies in different fields: business, transactions, etc. It is important to mention such countries as South Korea and Japan that have regulated the usage of cryptocurrencies in their markets in various ways. This has had a great boost to the market that brought it some legitimacy. An interesting fact is that Bitcoin was first seen as a thriving currency in the darknet when the transactions had a great deal of anonymity.
The ignorance of a lot of institutions and governments towards cryptocurrencies might lead to them losing control over worldwide financial markets. Step by step, these institutions start understanding the importance of this field and try monitoring and regulating it.
So, as it was already mentioned, in the past, Bitcoin was mainly used for anonymous transactions. This included both legal and illegal actions. One thing that really helped the blockchain technology to take off was the “smart contracts’ it had. Also, this has also improved people’s trust in it. This was one of the steps that brought the crypto world to the position it is at today.
A lot of modern businesses are adopting new platforms to increase their profits and efficiency. They try adding cryptocurrency as a way of payment, and this pays off! The organizations that implement crypto technologies become more popular and successful.

Price Movements For Cryptocurrencies

It is not a secret that in any financial market, digital or fiat, traders can significantly influence the prices of cryptocurrencies. Depending on their actions, the prices can both grow and fall. As an example, when the Brexit was announced, the price for the British pound has fallen because most traders decided to sell the assets as fast as possible. Situations like these can push people to the idea of buying crypto as a more stable option.
Yet another example is China. The government attempts to control the movement of money and does everything for it to stay within it. Bitcoin was the best option for people to send their money abroad. This made the prices for BTC grow to an enormous level. China was always considered as an important player in the price movements. When in 2013 rumors about China boycotting Bitcoin trading appeared, a rapid price fall had occurred. Later on, there were attempts to banning crypto exchanges and token offerings. There is good news though: recently, the government has stopped some of these measures, making crypto available again. The population of China can and will affect the market. It is expected that a massive increase in demand will occur.
It does not matter whether you invest in digital currencies by purchasing them straight or use contracts for differences to make profits. Cryptocurrencies can be a great addition to your portfolio, as it is expected that demand is going to grow in the nearest future.