Cryptocurrencies are a new form of money. The companies behind cryptocurrencies are not just creating a new form of money, but also new software platforms.
Do The Trade!
Some of the most popular software platforms used today include Windows, Fedwire and Dropbox. To utilize these platforms, a type of currency is used. You pay your local fiat currency or US dollars to purchase a license for Windows, so you can use it on your computer.
Cryptocurrencies replace the local fiat currency or US dollars used to buy these software services. This form of money uses blockchain technology as its database. Cryptocurrencies such as Bitcoin make financial transactions more accessible and open to everyone.
Cryptocurrencies are traded on the exchanges. These are websites where you can sell, exchange and purchase cryptocurrencies using fiat. There are various factors to measure the quality and reliability of an exchange like trading volume, spread, security, insurance, withdrawal and purchase limits, user-friendliness, liquidity and fees. If you want to trade professionally and access sophisticated trading tools, you need to use an exchange that requires you to confirm your ID and create an account. There are also platforms that don’t require you to open account. These platforms are ideal for those who only want to trade occasionally.
Types of Exchanges.
- Brokers– Brokers are websites where you can purchase cryptocurrencies at a price determined by the broker.
- Direct Trading– Direct trading platforms provide direct person to person trading, allowing people from different countries to exchange currency with ease. These exchanges don’t have a set market price. Every seller instead sets their own exchange rates.
- Trading Platforms – Buyers and sellers can trade on these websites and pay a fee for every transaction.
Always remember that not all exchanges are the same. Here are some of the most popular exchanges today.
Kraken was established in 2011 and it’s the largest Bitcoin exchange in terms of liquidity and euro volume. It allows you to sell and purchase bitcoins as well as trade between euros, Canadian Dollars, Japanese Yen, US Dollars and British Pound.
Coinbase is among the most popular trading platforms and brokers in the world. Users can buy Litecoin, Bitcoins and Ether via a digital wallet available on iPhone and Android or through trading with other Coinbase users on the Global Digital Asset Exchange subsidiary of the company.
Another popular trading platform is Cex.io. It allows you to trade cryptocurrencies for fiat money or trade fiat money with cryptocurrencies. Cex.io offers margin trading and user-friendly and personalized trading dashboards to those who want to trade bitcoins professionally.
Bitstamp provides advanced security features like fully insured cold storage, 2-step authentication and multi-signature technology for the wallet it uses.
Exchanges have built-in online wallets that store the cryptocurrencies you bought. If you don’t want to keep your cryptocurrencies on the exchange, you can either spend $99 on a hardware wallet such as KeepKey or use a paper wallet service.
Should You Invest?
How to earn cryptocurrency has a large income potential, but it is also very volatile. As such, you should only invest money that you are willing to lose.
If you are a beginner, it is important that you keep these things in mind to avoid losing a large amount of capital and to maximize your gains. Make sure that you are 100% sure before you take the risk.