Welcome to the world of cryptocurrency! In this article, we hope that by the end of your reading, you will be more informed on what cryptocurrency is, why it exists, what it is used for, its advantages and disadvantages, as well as how to trade it on the cryptocurrency exchange that exists.
Before you start learning about using cryptocurrency exchanges, as you can probably imagine yourself, it is a good idea to inform yourself exactly what cryptocurrencies are, and in general a bit about the market and how it works. Cryptocurrency is different from traditional currency. As you probably know, traditional currency is also known as Fiat money – it is issued by the government and is not backed by any commodities (apart from the value of the government itself of course). However this article is not about traditional currency – it’s about cryptocurrency and more importantly are beginners guide to using cryptocurrency exchanges!
What is cryptocurrency? Cryptocurrency is something that is only became to be more widely recognised in more recent years – it is a substitute for traditional currency that is digital. You may be thinking at this point that money has already been digitalised – indeed it has! Cryptocurrency works on the same principle that digital currency already does – it is really just numbers in a database that can be changed at anytime by anyone with access to it. Cryptocurrency however offers a huge number of advantages and possibilities that are not there with the digitalised versions of traditional currency, but as well as offering everything that traditional currency does too. For example, it is much harder to track who is responsible for a transaction using cryptocurrency due to the nature of how it is stored and sent – cryptocurrencies stored in an online wallet with a key. If the owner of the wallet loses this key, they will have no way of accessing the funds that are in the wallet as it is not tied to their name in any way! This is one of the main reasons that a lot of people use cryptocurrency. It is also becoming much more widely accepted by shops and stores across the world. The advantages of cryptocurrency are massive – another considerable use of it is to do with the fact that it presents the possibility to make nationwide or even worldwide money transfers without the fees that would normally be incurred with traditional currency!
Now that you know a bit more about cryptocurrency and the various advantages that it offers over traditional currency – let’s have a look at how cryptocurrency is traded and stored – the cryptocurrency exchanges!
What is a cryptocurrency exchange? A cryptocurrency exchange is a platform online – it is similar to the way you may access the stock market on a stock brokers account. However, the currency cannot be used to buy stocks and securities. A cryptocurrency exchange exist to do exactly as the name suggests – it allows users to trade digital assets for other digital assets. It is important to remember that a cryptocurrency exchange is completely different from a cryptocurrency wallet – a cryptocurrency wallet is where one that stores the actual cryptocurrency. From the cryptocurrency wallet, money can be sent to other people assuming you have their wallet address. Cryptocurrency wallets are completely different from cryptocurrency exchanges, as cryptocurrency exchanges allow assets to be sold and purchased, where is cryptocurrency wallets only allow for the storing and sending of cryptocurrency funds.
Direct trading platform – a direct trading platform is one that allows for trading between unique individuals in different countries. It is important to remember that a direct trading platform does not exist to facilitate the sales of stocks and securities, but instead to allow for individuals to exchange currency between one another if they are from different countries. The exchange rates can be individual requested by those that are selling the currency.
A trading platform – a trading platform is a website that pair up those users that are selling stocks and securities with those that would like to buy the stocks and securities. The trading platform themselves make money from this as a fee will be charged for every transaction that is made by its customers.
A broker – a broker of cryptocurrency is just the same as any stockbroker that you may know that sells regular stocks and securities for regular currency. A broker of cryptocurrency will set the prices at which they would like the articles to be sold for, and the customer to this broker will pay these prices if they would like to purchase them.
There are a couple of major things that you should be sure you are aware of, and that you are keeping an eye out for before you select an exchange that you would like to join in order to purchase cryptocurrency.
The reputation of the exchange – the easiest way to find out how good the reputation of a cryptocurrency exchange is buy asking other people that you know to have used the exchanges, whose opinion you respect, or to simply read reviews that other users have written about the exchange on good, certified websites.
Fees that exchange may charge – any good cryptocurrency exchange should make any fees that they plan to charge you for using their service clear before you commit to joining. It is also a good idea to ensure that you know how the various fees work within very cryptocurrency exchanges, as these can regularly change depending on the exchange that you intend to use.
There are a number of different things that you should look out for when you are using cryptocurrency exchanges – whether or not you are quite experienced in the use of cryptocurrency exchanges, and especially if you are just new. The world of digital cryptocurrency trading is certainly a growing one, and has been known to be a lucrative one too! It is essential that you learn how cryptocurrency brokers work, as well as cryptocurrency exchanges before you start entering into them!