What is crypto trading? The practice involves exchanging one cryptocurrency for another and exchanging fiat money like USD and GBP into crypto coins or tokens. It’s a bit similar to forex, where fiat currencies from across the globe are traded 24 hours a day, all year round.
How many cryptocurrencies are there?
The number of cryptocurrencies has taken off recently. There are currently around 1,500 in circulation. Since all ICOs involve a token in some form or another, the number of cryptocurrencies is only set to increase. The most popular of the tokens will eventually make their way onto the cryptocurrency exchanges. Here, they’ll be traded alongside the likes of Bitcoin and Ethereum. of these coins can be bought in exchange for the most popular cryptocurrencies like Bitcoin or Ethereum.
Advantages of crypto trading
One of the major benefits that comes with crypto trading is that you can get coins without having to mine them yourself. That saves you the long and expensive process, which also requires technical know-how.
How to buy cryptocurrency
You’ll typically go through one of the many cryptocurrency exchanges. These exchanges usually fall into two categories: centralized and decentralized.
In addition to buying crypto with your fiat currency, a centralized exchange also enables you to store your money and stay up to date on the market fluctuations. There is also less of a risk that your money will disappear if you forget your private key since it can be recovered.
However, it’s essential to go with respectable exchanges who have adequate security standards. That’s because there have been cases where huge amounts of money have been stolen from these exchanges by hackers.
Decentralized exchanges (DEX)
These cryptocurrency exchanges remove the intermediary. That means all trading is automated and conducted between peers on the platform. Decentralized exchanges include the likes of IDEX, Waves, Bitshares, and OasisDEX. Unlike centralized exchanges, there is more of a focus on privacy here. That is particularly beneficial if you want to keep your private data safe. DEX operates in something called a trustless environment. That is facilitated by the use of smart contracts. You retain full control of your fiat and cryptocurrency with your wallet. However, losing your private keys might make your funds irretrievable since there is no middleman
How to store cryptocurrency
How to store cryptocurrency depends on what your concerns are. Hot wallets make accessing your money a simple task. They’ll enable you to move funds around and perform exchanges quickly and easily. However, these conveniences come at the cost of lower security. Another thing to think of is what you want to store in your wallet. Crypto trading often involves multiple cryptocurrencies. That means you’ll have to check if your wallet can handle storing the coins and tokens you want to trade.
What to look for when trading
There are, as mentioned, over a thousand cryptocurrencies for you to choose from. Each one has a different value and utility attached to it. It’s therefore prudent to do your research before investing any money in crypto trading. It’s not easy to predict which ones will rise or fall in value. The cryptocurrency market is very similar to the stock market in that respect. And just like with the stock market, you can hit the jackpot one day — and lose it the next. Stay up to date with news on CoinRevolution to learn more about the market and how you can get involved.