Cryptocurrencies have become very popular, especially through Bitcoin. The Bitcoin was considered at the beginning rather than a game area in the IT sector. The skeptics laugh but has now passed. The Bitcoin has experienced a significant upswing and now mixes properly in our lives. The new Internet currency has increased significantly in importance. No wonder, because at Bitcoin the money is stored on the blockchain where no bank in the world has access to it. Consumers thus have more control over their money, making the bank as a mediator completely fail. Accordingly, the transaction costs. While these new cryptocurrencies carry some risks, they are much better suited to trading than traditional currencies.
In this article, we will focus on cryptocurrency and how to make an investment feasible. The following tips and strategies will make cryptocurrency trading a great pleasure.
WHAT IS A CRYPTOCURRENCY?
Cryptocurrencies are increasingly appearing in the financial market. In a cryptocurrency all transactions are encrypted and stored in a simplified way. Each transaction of a coin is simplified in a hash and dropped to save a lot of space. The blocks have a certain size before they are connected to a next blog. In a way, this currency is money that is spread in digital form. The cryptocurrency is not a means of payment, which is legally recognized. However, the currency of the Bundestag and the euro zone is considered as a unit of account. The name comes from the term cryptography. These are called the science to protect and encrypt information and data. The cryptocurrency is created by members who participate in Bitcoin mining.
ARE CRYPTOCURRENCIES SAFE?
Again, this is a very important question, especially if you intend to invest in a cryptocurrency. Crucial is the fact that the cryptocurrency cannot be manipulated. The cryptocurrency is not linked to banks, which means that they cannot exercise any control over the funds of the customers. In this respect, there are no customers, but only consumers who take responsibility for their money. Thus, a cryptocurrency has no real value. The value of this currency comes from the trust of the community. These are the users who appreciate the Bitcoin and the cryptocurrency. Thus, this currency is classified as very safe. By comparison, it is quite common for central banks to manipulate currencies to their advantage. But this is not the case with Bitcoin. Money cannot be drawn from nothing. You must first follow some internal rules. Even if the cryptocurrency seems safe, there is no absolute security with this currency.
For example, the software that calculates the blockchains may be corrupted. In 2010, a total of 184 billion BTC were transferred. And actually there are only 21 million BTC. The damage could only be removed by faultless software.
WHY INVEST IN A CRYPTOCURRENCY?
The biggest advantage of this currency is the anonymity of the transactions. But there are also many critics who claim that criminals increase the chances of theft and robbery. Nevertheless, more and more people invest their money in this currency. No wonder, because if the classic currencies are always manipulated according to the interests of the banks, nobody will want to follow the instructions of the state or the central banks. It can be very important for a state to control its citizens. This is also shown by the increasing cash ban. On the other hand, it is the cryptocurrencies that create enormous political leeway.
KRYPTOGELD IS NO LONGER DEPENDENT ON THE STATE AND THE BANK
The cryptocurrency is a currency that has originated from the people and not from the states or institutions. And that is the beauty of this currency. The fact that no bank acts as a middleman can make the whole thing much more enjoyable. With a cryptocurrency, sending money works the same way as the mind of an email. Coins can be sent from one person to another in just a few minutes or seconds. And the shipping works cross-border, without the transaction fees are due as you know it from the bank.
Each member has full control of the money with his own account. There is no bank or government that can block the account or freeze the money. Using blockchain, a kind of public accounting, each member has an overview of what is happening in the cryptocurrency network.
THE STRONG TECHNOLOGY BEHIND THE CRYPTOCURRENCY – THE BLOCKCHAIN TECHNOLOGY
The Blockchain is the driving force behind the cryptocurrency. It is a system that allows the user to control what happens in the currency. The user can put his money on the Blockchain, and has access to it at any time. Fortunately, the blockchain has never been hacked. The blockchain technology is feared by the financial world. The financial world is now trying to create its own cryptocurrency so as not to lose touch.
One thing is certain. If more cryptocurrency establish, then this would mean the end for the banks and financial institutions. The demand for these new currencies is increasing tremendously. It is also much cheaper to make money with the Bitcoin. With the Bitcoin you can send money abroad without any fees and that in seconds. And at a bank, such a transaction would take days or weeks.
For example, anyone who invested thirty euros in the cryptocurrency in 2008 would have a value of one million euros in 2013. And here we are not yet at the end of this development. According to experts, the price of a bitcoin in 2020 will be around $ 10,000. The current price of a bitcoin is around 2,700 euros.
TRADING IN CRYPTOCURRENCY
In recent years, cryptocurrency trading has become more important. The benefits of cryptocurrency trading are enormous. On the other hand, long-term investments can be risky. Because nobody knows how the cryptocurrency will develop. But if you are only interested in day trading, then you can benefit from the enormous advantages of this currency. The cryptocurrency is subject to significant price fluctuations. This can bring in decent returns. Daytrading profits are in the per thousand range. This is a bit different with the cryptocurrencies. Here you can benefit from significant price fluctuations, which are between 10 and 50 percent. And there is another clear advantage.
Traditional trading approaches such as chart analysis are losing more and more importance in forex currencies. More computers have taken over trading here. Accordingly, the psychology of mass only plays a minor role. And also probabilities are less pronounced. This is precisely why the probabilities analyzed are higher when trading cryptocurrencies. A 50% change in the price indicates that mass psychology still works well for this currency. Thus, cryptocurrency trading is free of programs and large investors.
WHAT IS THE BEST WAY TO HANDLE CRYPTOCURRENCIES?
There are several possibilities when trading cryptocurrencies. Either you buy the currency, or sell it. Before that you have to open an account on a trading platform. The terms and conditions must also be considered, and the same applies to the rules and fees.
If you want to trade not just one but several crypto-currency, you also need more accounts, which are managed on different trading platforms. Only in this way you can secure the best conditions. In addition, you also need chart software. This should bundle all trading platforms, so you can save a lot of time. Buyers and sellers must be able to act and respond quickly. Furthermore, the currency can only be traded 1: 1. So there is no leverage or leverage used in trading.
WHERE TO BUY THE CRYPTOCURRENCY?
eToro was one of the visionaries in the internet currencies. The provider was one of the first platforms where the trade in bitcoins was even possible. This has many advantages for the seeker. He does not have to search for the best cryptocurrency. He already has a secure and reliable trading platform and can immediately start trading in cryptocurrency there.
EToro trades heavy, high potential Internet currencies. The most common currencies are the Bitcoin and Ethereum. Trading is possible in long and short mode. There are no restrictions here. And the spreads are very attractive, even with only small deposits.
HOW MANY CRYPTOCURRENCIES ARE THERE?
There are now 700 different cryptocurrencies. After the Bitcoin was launched in the mahr 2009, followed by numerous others, which were based on the concept of bitcoin. Many currencies also had other priorities. For example, the currency Ethereum has been designed to create intelligent contracts. These are also referred to as “smart contracts”. The currency has the advantage that you could also pay with Ethereum at the conclusion of a contract. As already mentioned, there are 700 different crypto-currency. To go into all this would go far beyond the scope of this article. Therefore we want to limit ourselves to the most important ones. These are Bitcoin, Litecoin, Ethereum, Ripple, Monero, Dash, etc.
HOW DOES A CRYPTOCURRENCY WORK?
If you want to open an account for a cryptocurrency, a key pair will be generated which works according to an asymmetric cryptosystem investing in cryptocurrency. This implies that there are two keys. One is secret and the other is public. The secret key allows the user to decrypt the public keys of the other subscribers while also generating a digital signature. Turning the whole thing over, a public key allows the subscriber to encrypt the data to other subscribers and digitally sign them.
The public key represents the account number. The credit has a credit balance of zero when opening an account. Like any other participant, you can create as many pairs of keys as you like. The keys are saved as a file in the wallet. Furthermore, a participant can create a transfer order. To do this, he must create the public key of the target account. The order is then digitally signed with its own secret key. Afterwards the order will be published for all participants. The order then only has to be checked and archived and certified by digital accounting.
In simple terms, this means securing a place on the blockchain with a Wallet ID. If you want to do a transfer, you have to use the wallet to sign up. The user must create a password when logging in for the first time. When the wallet has finally been created, the user can receive or send the bitcoins.
IS IT WORTH IT TO BUY A CRYPTOCURRENCY?
First of all, for day traders or those who want to earn money fast, you can look forward to high returns. At the same time, however, the trader needs to know the dangers. Cryptocurrency fluctuate very much. This not only enables high returns but also high risks. Losses could occur if you do not study the courses sufficiently or do not have enough background knowledge. And you should never invest all your savings in cryptocurrency. One should consider the digital currency solely as another form of investing money. Due to the price fluctuations investors must muster a lot of patience and risk-taking. The investor must react at the right time, buy or sell bitcoins. Only in this way can a high return be guaranteed.