What is cryptocurrency trading?
Cryptocurrency trading is the act of speculating on cryptocurrency price movements via a CFD trading account, or buying and selling the underlying coins via an exchange.
CFD trading on cryptocurrencies
CFDs trading are derivatives, which enable you to speculate on cryptocurrency price movements without taking ownership of the underlying coins. You can go long (‘buy’) if you think a cryptocurrency will rise in value, or short (‘sell’) if you think it will fall.
Both are leveraged products, meaning you only need to put up a small deposit – known as margin – to gain full exposure to the underlying market. Your profit or loss are still calculated according to the full size of your position, so leverage will magnify both profits and losses.
Buying and selling cryptocurrencies via an exchange
When you buy cryptocurrencies via an exchange, you purchase the coins themselves. You’ll need to create an exchange account, put up the full value of the asset to open a position, and store the cryptocurrency tokens in your own wallet until you’re ready to sell.
Exchanges bring their own steep learning curve as you’ll need to get to grips with the technology involved and learn how to make sense of the data. Many exchanges also ha
ve limits on how much you can deposit, while accounts can be very expensive to maintain.
How do cryptocurrency markets work?
Cryptocurrency markets are decentralised, which means they are not issued or backed by a central authority such as a government. Instead, they run across a network of computers. However, cryptocurrencies can be bought and sold via exchanges and stored in ‘wallets’ .
Unlike traditional currencies, cryptocurrencies exist only as a shared digital record of ownership, stored on a blockchain. When a user wants to send cryptocurrency units to another user, they send it to that user’s digital wallet. The transaction isn’t considered final until it has been verified and added to the blockchain through a process called mining. This is also how new cryptocurrency tokens are usually created.
What is blockchain?
A blockchain is a shared digital register of recorded data. For cryptocurrencies, this is the transaction history for every unit of the cryptocurrency, which shows how ownership has changed over time. Blockchain works by recording transactions in ‘blocks’, with new blocks added at the front of the chain.
Nice and simple explanation of trading, exchanges and blockchain.
I am not a trader but holding my all digital assets.
Thanks for sharing.
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Great to see you already kick started with an interesting finance post. Quite an explanatory post on trading, finance and cryptocurrency.
You might want to work on you tags. Steemgeks are for science and medical post and sportstalk obviously for sports. Do well to remove to avoid getting flagged.
I believe you will learn a whole lot as time goes on here. Looking forward to reading more finance and crypto post from you. Would love some videos too
Thanks for educating him about the use of # tag. I think he is a newbies with few post. @timmzey i think it is advisable to check similar post on what you want to talk about before posting next time in other to avoid being flag for the abuse of #tag
Yeah I noticed that. Reason I had to give him heads up. Hope he does the needful so an angry whale does give that bad treatment we all don't like
thank you i will take note henceforth
Fantastic write up. You really keep it simple.
There are lot of benefit that i think crypto can help to solve and some of them include exchange rate problem.
Thanks for sharing
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