Beginner’s guide to crypto trading: what are cryptocurrencies?

Surely you have already heard stories of people who have become millionaires thanks to cryptocurrencies. There are many examples on the web. But do you know exactly what cryptocurrencies are?

Cryptocurrencies are a sort of monetary system. They have no value for the material with which they are made, such as gold, silver or diamonds. They are also not controlled by a government or a country, nor by a company. Their value is determined by supply and demand, we as investors define it. The more buyers there are, the more their value will increase.

How to buy cryptocurrencies?

If you are interested in the idea of ​​getting into cryptocurrency trading, there are multiple options on the internet and many trading platforms and applications that you could use in order to connect with a certified broker. But first, the best thing to do would be to research the cryptocurrency market and find out the current trends. You can do it on a platform likeEclac and adapt your crypto strategies based on expert analysis.

How do cryptocurrencies work?

The first cryptocurrency to be created was bitcoin, but today there are thousands of other cryptocurrencies called the alt-corners. The name cryptocurrency comes from the fact that they are encrypted currencies, that is to say that they are protected by a series of security keys. This is what makes them successful and makes them attractive, it is very difficult to steal or hack them.

Doing transactions with made currencies can have a high cost due to the presence of many intermediaries. With encrypted currencies the cost is much lower and transactions are much faster or even immediate. Moreover, they are anonymous.

The economic crisis of 2008 favored the development of crypto-currencies. A person who acts under the pseudonym of Satoshi Sakamoto had the idea to develop these crypto currencies based on the blockchain. These are currencies that are not part of the traditional financial system, that is to say banks and governments mainly. The blockchain system allows transactions to be carried out between two people without going through one of these intermediaries.

Cryptocurrencies, a revolution comparable to the industrial revolution?

The fact of eliminating the intermediaries thanks to the internet and the blockchain is a revolution. Some observers consider it to be a revolution of the same magnitude as a revolution like the Industrial Revolution. Digital money, that is to say dematerialized money, already existed but to carry out transactions it was always necessary to use banks and pay them a commission.

The blockchain is a decentralized system that allows transactions to be carried out in blocks. These blocks have a unique code that cannot be repeated. Each transaction block remains engraved on the blockchain forever, with all the information related to it. The network that is linked to the blockchain records the transaction and validates it. Everyone can participate. All these blocks of transactions connect with each other to form a chain, the blockchain.

It is therefore the community that replaces the central intermediaries. That’s tens of thousands of connected computers around the world. Cryptography is based on mathematics and is very reliable. A single person could validate a transaction and make a mistake, but in the case of the blockchain it is impossible because thousands of users validate it. This is also what makes the blockchain extremely resistant to hacker attacks on the internet.

The blockchain validation system is called ‘mining’ and the people who run it are called ‘miners’. Anyone can become a minor if they wish. Just install the necessary hardware at home and get started. You too can become a minor! If you want to know more, we recommend this article from Cryptoast which explains how to get started in cryptocurrency mining. Miners therefore help to give power to normal people, because everyone can participate. Be careful, however, because some countries have decided to ban the mining of cryptocurrencies, this is for example the case of China.

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Bitcoin, an interesting investment?

One of the major problems with buying bitcoin is its high volatility. Unlike the stablecoin, the value of bitcoin goes through ups and downs and even regularly experiences changes in value with double-digit percentages. However, when it was created, bitcoin had a value of $0.01. The few people who invested from the start have for some become millionaires (if they haven’t sold too soon).

In 2011, the value of bitcoin reached $35 to drop back down between $2 and $15 in 2012. Crypto-currencies then experienced strong growth, particularly with a strong popularity that developed in the countries of South Asia. -East. In 2013, bitcoin reached a value of $202 and then $1203. Its value among brokers is around $45,000 as of April 5, 2022 but has already reached a value above $67,000 in 2021.

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Beginner’s guide to crypto trading: what are cryptocurrencies?

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