New to Crypto? This is how you can get started TODAY!

 New to Crypto? This is how you can get started TODAY!

New to Crypto? This is how you can get started TODAY!

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Blockchain in a Nutshell

Blockchain, originally known as block chain, is an ever-increasing list of records which are known as ‘blocks’ which are linked to a ‘chain’ using cryptography. Invented by Satoshi Nakamoto (an unknown entity/group) in 2008, blockchain was intended to serve as a public transaction ledger for the popular and widely accepted Bitcoin (BTC).

Once data is recorded inside a block which has been added to the blockchain, it is extremely difficult to change it. For this reason, blockchain is used for the secure, decentralised transfer of items such as money, property, contracts, and several other components.

Cryptocurrencies and how they can be traded

Simply defined; cryptocurrencies are digital money, and they are not tied to valuable assets. There are no physical coins, bills, or notes involved. Crypto is not tied to anything of value in the real world and this makes their value fluctuate erratically.

Cryptocurrencies consist of coins and tokens, with coins being cryptocurrencies that have their own blockchain such as Bitcoin, Ethereum, Litecoin, Ripple, and several others. Tokens, however, are cryptocurrencies which have been built on other blockchains, such as decentralised applications that run on the blockchain of Ethereum.

Tokens, as opposed to coins, represent an asset or a utility for a certain project and these tokens are sold or handed out during the first public sale for a specific project, also known as the Initial Coin Offering (ICO), which mirrors an Initial Public Offering (IPO) in the stock market. The purchase/trade of cryptocurrency has become more user-friendly in recent years, with many popular and reputable financial companies and brokerage firms joining in by offering the trade/investment in many cryptocurrencies.

However, the cryptocurrency space is widely unregulated, and investors are always urged to use a reputable cryptocurrency exchange trading platforms such as Binance, Luno, Gate.io, or Huobi, or a regulated and reputable broker offering crypto as a tradable financial instrument.

Pros and Cons of investing in/trading cryptocurrencies:

PROS:

  • Cryptos are convenient as they can be bought/sold freely throughout the day
  • Fluctuating rates can become a profitable trading opportunity for many
  • Supported by mobile trading applications
  • There is widespread acceptance of cryptocurrencies
  • Traders can use auto-trading to harness the best trading opportunities while they cannot manually trade

CONS:

  • Crypto is extremely sensitive to driving factors such as news
  • Governments may get involved – especially with centralised projects
  • There is a lot of potential for scams
  • There is a substantial risk of losing invested capital as result of market volatility
  • Unregulated nature of crypto may scare many investors

Liezel Thorne

Liezel is a content writer with a passion for writing about the financial industry and corresponding markets. Her favorite topics include Forex, Stocks and Indices, Cryptocurrencies, and anything relating to trading technology – news, newest and latest tips, tricks, and trends. She has done extensive reviews on brokers, trading platforms (web, desktop, and mobile), and various other concepts involved with trading. As a student of Environmental management, she has a keen interest in geography, environmentalism as well as conservation of both fauna and flora.

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