To Understand Crypto Trading, You’ll first need to understand What is crypto and how to trade it. Cryptocurrencies are digital or virtual currency which is secured by technologies of Cryptography which Makes it impossible to be counterfeited, hacked or double spent.
To start off cryptos work on complex structures and you need to understand it before you get your hands dirty as It might involve significant risk on our capital and just going hit and trial with crypto trading can have a significant toll on your Seed capital.
Cryptocurrencies are based on Blockchain Technology, It is a distributed ledger enforced by a huge network of Devices. The Main Feature of crypto that attracts a huge chunk of the crypto market is that It’s decentralized i.e they are not issued by any central body/authority which makes them potentially safe from any kind of Government Interference and Manipulations.
But less Government Intervention also means they can be used for illegal activities and this is a cause of great concern and the main reason why, crypto faces a lot of criticism. Experts believe that Crypto is the digital future of currency and can disrupt potentially every industry out there including Finance and Law.
The First crypto based on blockchain was Bitcoin, which still is the most famous and valuable crypto. You might be living on Mars if you’re a crypto enthusiast and not familiar with Bitcoin. It’s recent rise and Tesla’s investments have caused it’s value to skyrocket in the recent Months.
Following Bitcoin Success, a lot of other cryptos spawned famously known as Altcoins. Some of the successfull altcoins include Peercoin, Dogecoin, Namecoin, Ethereum, Litecoin, Cardano etc.
Total estimated worth of crypto market has risen to 1.8 trillion dollars – More than 60% of it is due to bitcoin. With this much of market cap, and high future potential you might be at position of disadvantage if you don’t catch the train fast.
What is Crypto trading
If you’re familiar with any kind of trading be it stock market, commodity market or a basic knowledge of finance. you won’t need a lot of time understanding crypto trading as it works similar to available forms of trading. However the underlying technologies of crypto trading are a bit complex.
Basically Crypto trading is an act of speculating on cypto price movements via a CFD trading account, or buying and selling the underlying coins via an Exchange. So you need to get yourself registered on a crypto exchange to start trading cypto. There are lot of exchange, you can get yourself registered on to start trading cryptos.
My reccomendation would be to go with Binance as they are by far the best trading platform in terms of stability and security in crypto trading.
Crypto Derivatives trading
CFDs trading are derivative which helps you to speculate on crypto price movements without having the ownership of underlying coins. You can buy if your speculation makes you think that price is going to rise and vice versa.
Either you are buying or selling CFDs, Both are leveraged i.e you need to pay only a small amount known as Margin to have the full exposure of the Market.
Each Exchange bring on their own steep learning curve to understand the underlying technologies and work with UI functionalities. Binance and other Exchanges offers you a quick overview as soon as you login to their platforms.
Crypto Markets are decentralized, similar to the cryptos itself i.e it means that they are not issued or backed by any Central body and No government is not involved and they run across a network of Computers.
What is Network Consensus
A ledger or blockchain file is kept on multiple devices across a network, being decentralized It needs to be there on multiple locations rather than a single location. It is readable by everyone in the network.
It makes the transactions transparent and difficult to alter, with no one vulnerable and weak points with a potential to be exploited by human, software or any automated scripts.
Each ledger or block are linked together by Cryptography – Series of complex Algorithms, Computer science and Mathematics. Any attempt to alter data is identified by computers in the network and these computers in the network are there to verify transactions and people who do it are called miners and the Process is called Mining.
Mining computers Compile Valid transactions into new block and generates cyptorgraphic link between previous block, it is done by solving complex algorithm and when a miner succeeds in doing so, He gets rewarded for the same.
As any Market, Crypto Markets are also driven by demand and supply. However as they are decentralized they remain free from many of the economic and political concerns that affect traditional currencies.