Most All You Need to Know About Trading CryptoCurrencies
Bitcoin, NFTs, Ethereum, Altcoins, Dogecoin etc
All About Cryptocurrencies
Cryptocurrencies can be thought of as digital assets based on a Marketplace trading network and distributed across a large number of computers. This in turn makes it a structure which is beneficial in that it allows cryptocurrencies to exist without control of central authorities, like government and banks as is the case for most FIAT currencies.
Crypto has now passed $2 trillion for the first time, it is valid to say Cryptocurrencies are here to stay. In fact, there are now more than 9,000 crypto-currencies.
The main reason why people like cryptocurrencies is due to the fact they can allow for secure payments online, thru tokens. These are represented by the ledger which is internal within the system itself.
The Global Cryptocurrency Chart is based on Total Market Capitalization
There are thousands of alternative cryptocurrencies out there known as altcoins. Altcoins are essentially all other cryptocurrencies in addition to Bitcoin. They all have certain functions and specializations, but most of all, each and every one of them tries to improve certain functionalities of Bitcoin, or even solve some other issues out there. The ones that are similar to Bitcoin are known as forks, and others are completely new kinds of cryptocurrencies that are built from the ground up to work, some based on Ethereum, some on their own native block-chains.
The Bitcoin Story
It all began in 2008, where the domain name bitcoin.com was registered. Later on, a paper was released by an individual or group of people that went by the name Satoshi Nakamoto. This paper was named “Bitcoin: A Peer-to-Peer Electronic Cash System”, and it ended up detailing the methods through which Bitcoin works, including a peer-to-peer network, and its implementation of generating a system for electronic transactions that do not rely on a third party.
By January 2003, the Bitcoin network went online. This was done by Satoshi Nakamoto who generated the genesis block. The genesis block is essentially block number 0, the first one to ever exist.
When it comes to Bitcoin itself, the currency’s name is BTC, and this currency has no physical Bitcoins, but instead uses balances that are kept on a public ledger which anyone can view. This public ledger is known as the blockchain.
Now, in order for this blockchain to work efficiently, all of the transactions need to be verified, and this is one through the usage of computing power, or in other words, organizations or people who fill the role of miners. Bitcoins are not issued by a bank, or by a government, but instead, it is generated by this system, of a collection of computers all of which run bitcoin code and store the blockchain.
Miners solve complex cryptographic puzzles in order to verify the transaction, and for this, they are rewarded with BTC.
Bitcoin’s 2014 to 2021 value chart by CoinMarketCap
The mining process is required due to the fact that it allows Bitcoins to be released into circulation. If they want to mine, a user has to use computing power in order to solve complex cryptographic puzzles and discover a new block. Mining adds and verifies the transaction records of the entire network, and for adding a new block, a miner is rewarded with BTC. This has a twist, however, as the reward is split in half every 210.00 blocks, which means that if in 2009 a miner was rewarded 50 BTC, it halved throughout every 210.000 blocks, and as of 2020, the third halving occurred, so now it’s at 6.25 BTC per block.
The #1 cryptocurrency in terms of popularity in value
Has high-returns potential
High level of security
Limited real-world use
Has a high level of volatility
Cannot be restored if private key ends up lost
The Back-story of Ethereum
Ethereum is this decentralized, open-source, and community-driven blockchain that is known for its smart-contracts functionality as well as its popularity. It even powers thousands of decentralized applications, and its main, native cryptocurrency is known as ETH.
Again, to truly understand it, we’ll need to look back at its history. It was proposed all the way back in 2013 by Vitalik Buterin, and the development process began its crowd-funding process in 2014.
The network went live on the 30th of July, 2015, and had 72 million coins (ETH) which were premined.
Ethereum is this open-source, distributed blockchain network that has the main goal of providing smart contract scripting functionality to the blockchain. As such, it has allowed developers to streamline, as well as build decentralized applications which function on the blockchain itself. To do this, it has nodes that store as well as maintain its blockchain.
GAS is the internal pricing fee mechanism that enables Ethereum to secure the quality of the network, and this works in the way through which every transaction that occurs in the Ethereum network is measured through its Gas usage.
Everything has a gas price associated with its execution. The gas limit is the amount of computational power the Ethereum network can use, and the longer the smart contract is, the higher the total gas limit becomes.
High Level of Security
The Non-Fungible Token Story (NFTs)
If you’ve seen the news, you’ve noticed that Beeple sold an NFT for $69 million.
That’s an insane amount, and as such, it has raised these tokens to the front light. However, what exactly are these tokens, and how do they work?
Non-Fungible tokens are essentially crypto assets that are indivisible, and completely unique. They launched on the Ethereum blockchain as an ERC-721 token standard but became available on other block-chains as well. Each token contains information that is recorded in the smart contracts, and this piece of information is the unique aspect of each token, as they cannot be replicated.
They can represent anything, from music to images, and in-game items, and they have characteristics that are specific to them. They are essentially non-inter operable, indivisible, indestructible, and fully verifiable. This is due to the fact that all of the NFT data is stored on the blockchain through smart contracts, and none of the tokens can be destroyed, replicated, or removed.
Notable NFT projects include CryptoKitties, Decentraland, and CryptoPunks.
According to Statistic, the market capitalization of global transactions involving a non-fungible token (NFT) is nearly $400,000,000 USD.
Digital and Regular Trading Platforms
When discussing trading platforms, they are essential pieces of software that are used for trading.
This includes the process of opening, closing, and generally managing the market positions throughout a financial intermediary, which typically includes an online broker. These platforms cover a wide range of users, from the most basic to understand screens to get someone started, to complex and sophisticated user interfaces alongside toolkits that offer live streaming quotes alongside charts for some of the most well-acquainted users.
Every trader out there typically takes multiple considerations before deciding on which trading platform to trade on, and this is based on a mix of features, but most importantly, the fees they have. A platform can be either dedicated to trading in stocks, forex, and futures markets, or to crypto markets.
Stock Trading Platforms
A trading platform enables investors as well as traders to place trades alongside monitoring all accounts through financial intermediaries. These trading platforms differentiate themselves by offering different features that are specific to them, such as charting tools, news feeds, real-time quotes as well as search filters. Others can even be tailored towards a specific market.
The main thing you need to know about here is the fact that they are available in two types, prop platforms as well as commercial platforms.
Commercial platforms are available for day traders as well as retail investors, and these are their target audience. The main point of attraction they have is the fact that they are extremely accessible through their easy-to-understand UI/UX design, and they feature a lot of helpful tools, including news feeds and charts that allow investors to make an educated decision based on actual research before making an investment or trading decision.
Prop platforms however are these customized platforms that are specifically developed by large brokerages in order to suit their specific requirements as well as trading style. Traders use a variety of different trading platforms which is highly dependent on the style of trading they implement, as well as the volume at which they trade.
Stock trading is essentially the process of buying as well as selling stocks frequently in the attempt to time the market itself. A stock is this form of currency that is able to indicate that the holder has proportionate ownership in a corporation. The corporations will typically issue or sell stock in order to raise funds so they can operate their businesses, and there are two types of stock you will most commonly find. These are both common and preferred stock.
Stocks are purchased and sold on webtrading platforms and stock exchanges and private sales in some cases. The goal of a stock market trader is to capitalize on short-term market events to sell stocks for a profit and then buy stocks at a low point. Some traders are known as day-traders, and this means they buy and sell multiple times thruout the day, while other traders are less active traders who only place a few trades a month on average.
Keep in mind that the investors that trade their stocks to research and results from specific analytics will tend to devote hours throughout the day in order to fully follow the market. As such, they tend to rely on technical stock analysis, and tools that are used to chart a stock’s movement with the attempt to figure out specific trading opportunities and analyze certain trends. There are brokers that offer stock trading information as well, such as analytics reports, stock research and even charting tools.
You can essentially place bets on the currencies throughout the entire globe through forex, or in other words, a foreign exchange. These are brokerage accounts that allow you to buy or sell currency pairs that react to the developments across the entire world, and the forex maker operates constantly, or in other words, it opens on Sunday afternoon U.S. time and closes on Friday Afternoon. The volume of transactions ranges in the $4 trillion a day range, which is larger than the world’s stock or even bond markets.
Regarding forex traders, they will typically take long and even short sale positions on currency pairs, and these calculate the exchange rate between two forms of legal tender. The most common ones are U.S. Dollar (USD) and Euro (EUR). The long position opens a trade that makes money when the exchange rate simply goes higher while short sale profits when it gets lower. A trader doesn’t specifically borrow money or securities from a broker when opening up a short sale position, but they could potentially have to pay a rollover fee.
In order words, brokers hold your money in this account that changes value on a nightly basis as it reacts to the daily profits as well as losses, and the brokers handle any fees that could incur, which can include commissions. Keep in mind that you will also have brokers that hide their free schedules with legal jargon which could lead to potential clients having to do a lot of research before they decide to open an account.
When picking a forex broker, you’ll need to first figure out what kind of investors you’re planning on becoming as well as what your goals are in investing.
What you need to know is that each broker that features forex investments has its own set of advantages, however, as with anything, you’ll also have a set of disadvantages. Some of the most important things that every trader needs to consider are the level of security, transaction fees, and regulations. More specifically, security features can vary from broker to broker. You should ideally find one which at least provides you with two-step authentication so you can keep your account as safe as possible.
Keep in mind that most forex brokers are also regulated, and specifically in the U.S., they are regulated by the National Futures Association (NFA) and Commodity Futures Trading Commission (CFTC). This does not mean that every single broker out there is regulated, be extremely cautious.
They also differ in their platforms and have different account minimums as well as transaction fees. Create a budget for yourself, decide on how much you’d like to invest, and how much you’d like to pay in fees.
Futures Market Trading
When we discuss the futures trading market, it is essentially this auction market where the participants can buy as well as sell commodities as well as futures contracts for delivery on a specific future date. The futures, in this case, are exchange-traded derivatives contracts that lock in the future delivery of a commodity or even security at a price set throughout the day.
The contracts are traded by the participants that are interested in buying or selling the derivatives, and in the case of U.S. futures markets, they are regulated by the commodities futures clearing commission or (CFTC) with futures contracts that are standardized by the exchanges themselves. These contracts are typically made by producers as well as suppliers of commodities as a way of avoiding market volatility, as they negotiate contracts with an investor that agrees to take on the risk as well as the reward of a volatile market.
Cryptocurrency Market Trading
In the cryptocurrency markets, however, these are specified in the way through which the market moves according to supply and demand. Supply is the indicator of the total amount of coins including the rate as they get released, end up getting destroyed, or potentially get lost. Market capitalization is the value of all of the coins in existence, and the press is the way the cryptocurrency is portrayed in the media as well as how much coverage it is getting. Then you have integration, which refers to the extent to which the cryptocurrency integrates into the existing infrastructure of eCommerce payment systems for example, and the last thing that plays a major role are key events, such as regulatory updates, security breaches, and potential setbacks.
Cryptocurrency trading also has spread, which is essentially the difference between buy and sell prices that are quoted for a cryptocurrency. It also has lots, which are batches of cryptocurrency tokens that are used to standardize the size of trades. Since cryptocurrencies are volatile, the lots will typically be small, and most will just end up being a single unit of the cryptocurrency in question.
You also have leverage, which is a means of gaining exposure to a larger amount of cryptocurrency without needing to pay the full value of the trade upfront. You basically put down a smaller deposit, which is known as a margin, and when you close a leveraged position, your profit or loss is based on the full size of the trade itself. This type of trading also has specific cryptocurrency exchanges.
Picking the Perfect Platform
When traders pick a trading platform, their main priority and eye will mainly be at the fees involved with most of the transactions alongside the specific features that are tied to that platform. Day traders as well as other short-term traders will typically need level 2 quotes alongside a market maker depth chart in order to assist with their decision-making process, and options traders could require tools that are specifically designed to visualize specific strategies that are implemented throughout each trade.
Traders will typically employ a lot of strategies when it comes to investing, and as such, those who implement the scalping method will typically target platforms that have the lowest fees.
Scalping is a trading strategy where traders profit off of small price changes for a stock, and scalping relies on technical analysis, including candlestick charts as well as MACD for execution.
These small profits earned could potentially multiply to an exponential amount, but this is the case if the trader uses an exit strategy to mitigate losses and reap all of the benefits. As such, lower feels will typically always be preferable, but there could be potential trade-offs to make up for them. Low fees could not be advantageous to traders if the platform lacks features as well as information research as a result of having those low fees.
There are trading platforms out there that can be agnostic to an intermediary or broker, and other platforms are only available when you are working with a specific intermediary or broker.
Financial intermediaries serve as these middlemen for financial transactions, and this is the case for banks or funds, where they can help create efficient markets as well as lower the cost of doing business. They also provide leasing or factoring services; however, they do not accept deposits from the public.
Some of the best financial intermediaries out there will tend to offer pooling risk, reduction of costs, and economies of scale. As a result of this, investors will generally consider the reputation of the intermediary or broker as well, before committing to a specific platform to execute trades as well as manage their accounts.
Keep in mind that there are also platforms that have their own set of requirements to use them. Day trading platforms could potentially require that you as a trader have a certain amount of USD as equity in your account as well as be approved for margin trading, while options platforms could require approval to trade various types of options before you are actually able to use the platform at all. To give you a bit of context, equity represents this value which would be returned to shareholders if all of the assets were liquidated and all of the debts were paid off.
Features You Need to Look Out For
One of the most basic functions a trading platform needs to have is order placement, or in other words, it needs to allow you as a user to place new orders, and these do include market orders. You also need to have access to limit orders, and order types. You can look up real-time prices as a result of this, track trading statistics for a specific day, and analyze the win-rate for a specific currency throughout that day, while also getting an overview of the profit or loss on closed trades.
In advanced trading platforms, you’ll also find tools including interactive charting, chart patterns, as well as technical indicators that will allow you to analyze stocks as well as check any trends security movements. You will also be able to customize certain chart-specific attributes, such as indicators, sector comparisons, and resistance lines.
In regard to profitable investing, you need to use a brokerage service that will align with your specific goals, as well as needs in learning and the style you would potentially trade in. If you are a new investor, getting access to the best online stock broker options that fit your specific needs will be the difference between creating a new income stream or wasting a lot of time.
However, what you need to know is that many of these online platforms will typically have fees associated with them, and this is due to the fact that they give you access to the financial markets, and are optimized for a different type of client. You have platforms that offer long-term buy-and-hold options, as well as active day-trader options. These platforms typically get a commission on the other side of the transaction, and they can use the money you put into your account to gain more liquidity for other positions that they would take, and this allows them to generate profit, reduce their own cost, or the cost of other transactions, and even have more stability by being simply bigger on the entirety of the market.
Discussing day-trading software, it typically also needs to have tools and order entry platforms that will allow you as a trade to carry out your work in an efficient way, and you would also be paying for this with the fees. The platforms will also include automated trading which is often based on the parameters which are set by you as a trader, and this allows for orders to be sent to the market a lot more quickly than a person would.
Digital trading platforms will often have benefits associated with them, such as having lower fees, more control as well as flexibility, the ability to avoid brokerage bias, as well as access to a wide assortment of online tools, as well as the option to monitor your investments in real-time.
One of the best aspects of this, and the main benefits traders as well as firms get, is the fact that they can use a single web-based trading platform, that doesn’t really need desktop PC or laptop-grade hardware to run. Some of the most advanced platforms out there allow users to trade on their phones, tablets, and other mobile devices directly from the web-based platform, without the need for a separate download.
However, you should be cautious as you can invest too much, too quickly if you are not cautious, and you also cannot really develop a personal relationship with the broker. They depend on an online connection, and you might encounter bugs or even errors due to the way the specific software in question is built.
Digital applications that have links in the healthcare process play a key role in how we manage our health and future medication. Platforms are used for making appointments at the doctor or getting medication delivered to our doorstep. Many of these platforms also facilitate online consultations and negate the need for a physical visit altogether. This is just one example of what you could potentially invest in or one of the profits you gain as the technology evolves.
In cryptocurrency trading, each and every one of us has a different reason and way in doing so. However, there are certain things that you can follow in order to get a better chance of gaining profits out of your efforts.
For one, you should always have a clear motive for entering each and every one of your trades, and even set a profit target, and know where to cut your losses.
You also need to manage your risks and analyze the market to see which currencies are too volatile to earn you a profit.
Never buy due to the fact that the price seems low, as oftentimes if it seems too good to be true, it typically is.
Make sure to keep your emotions in check at all times, and never make impulsive decisions. Last but not least, never trade more than you are willing to lose.
Pros of trading the market:
Potential for High Returns
Protection from Rising Inflation
Growth in Acceptance and Usage of Cryptocurrencies
Cons of trading the market:
Unregulated and Unbacked
Potential Network Stall
Investing In The Future
When it comes to investing in any market, there are certain risks involved, and you really need to do a lot of research, market analysis, and what we like to call “homework” before really engaging in it. Always be cautious as to how much you want to invest, and set your budget even before making an account at a trading platform. There are a lot of trading platforms out there, from stocks, forex, futures, and even crypto, and knowing where to start could make the difference in creating a new revenue stream or just ending up disappointed.
Benefits of a Good Webtrading Platform
Thru the past few years, cryptocurrency development has sky-rocketed in terms of both innovation and interest. Many people have relied on webtrading platforms in order to invest in projects they deem worthy, or in other words, to purchase specific types of cryptocurrencies. From giants such as Bitcoin to even the newest altcoins like Dogecoin which are popping up on a steady basis, a good webtrading platform can make or break someone’s cryptocurrency trading success and experience.
What genuinely makes a webtrading platform good is a set of features that can truly make things easy and convenient even for the most inexperienced user. Many modern trading platforms implement ease of dealing features, where you can simply buy or sell crypto-currencies with little more than a click. Webtrading platforms are also fabulous in the speed of trade executions however what helps makes a good webtrading platform are fees, or in other words, lower costs vs the competition. In many of them, you as the end-user will have the ability to monitor all of your investments in real-time online.
One of the most interesting aspects of any webtrading platform is the control you have over your trades. The platform is online at all times, or in other words, you can make trades thruout the day, or at night, which lets you choose when you want to trade, and you can also make your trades thru the use of mobile devices, desktop PCs or laptops, which streams things and adds levels of accessibility to your devices.
Keep in mind that, from the very moment you end up making an account, you can initiate trading. This is possible as long as you add the required funds to your account. There are many online trading platforms that have proven the test of time and have the largest user bases. Typically, these platforms will also implement tools as well as features that will help the traders learn about more advanced tactics and methods that involve trading.
In other words, you can access training programs, receive market signals, trade in real-time, save on fees and flexibly trade just about anything thru the quick transaction on a good webtrading platform, and that is essentially what you need to look out for, even before you make the first move and set up an account on the trading platform in question.
A webtrading platform has come a long way thruout the years, and they have streamlined their user interface to a point where just about anyone can jump in and understand even the most basic ways of making trades and this knowledge is then built upon through training programs and market signals, that will ultimately define a future trader.
By reading these trade platform tips, you should now have a clearer perspective as to what you need to consider when you are out there on the hunt for a solid webtrading platform. Good trading platforms provide market signals as well as guides to help you on a path thru which you can make good crypto, currency, futures or stock market trading decisions based on analytical data rather than guessing.
SafeCoin and DogeCoin:
Market Analysis & Comparison
Dogecoin (DOGE) is the meme currency which features a Shiba Inu (dog) and was originally created as a joke or a gag on the entire cryptocurrency industry. However, over time, it gathered a lot of community attention and created its own strong fan base. DOGE is unique in the sense it uses Scrypt technology and has a block time of 1 minute with an uncapped total supply.
SafeCoin (SAFE) is a gateway to what is known as the Maidsafe network and grants any user a fair and transparent way to get involved within the SAFE network. These coins can be earned, traded, or purchased. SafeCoin differs in the fact it uses a Proof of Resource consensus algorithm. This takes the proof of work algorithm to the net level, where miners use CPUs to regulate the Maidsafe network.
Should you Invest in Dogecoin?
Here’s the question on everyone’s mind, is Dogecoin worth the investment at this time?
If we look at the stats, at the time of writing in May 2021 DOGE had a value of $0.28. A month ago, Dogecoin had a value of $0.21. However, Doge is a very volatile crypto which had its all-time high at $0.73 on May 8 2021. That was just hours before Elon Musk and Elon's mother were on Saturday Night Live TV (saying negative stuff about Doge).
This is a meme currency heavily influenced by social media, Elon Musk and journalism headlines, so at $0.20 it might be a solid investment, assuming you’re not a “safe” player, as it has risen to over $0.60 multiple times.
It is important to note DOGE had a $36,950,600,888 market capitalization (last time we checked), and only time will tell where it goes from here.
Should you invest in SafeCoin? So, is SafeCoin worth the investment at the current time by comparison?
Things get really interesting with SafeCoin. At the time of writing, May the 23rd of 2021, SAFE is valued at $0.17. On April the 23rd, it was valued at $0.19. However, it is one of the most volatile currencies and saw dips on a daily basis. It went up to $0.26 on May the 3rd, and dipped to $0.07 on May 11th, before getting back to $0.20 the next day.
It is essentially a wild and wide ride to estimate the value of this cryptocurrency, and while it could be a wise investment or speculative trading market at its current value or if you find it at under $0.10, then it may be. It's important to note SAFE had a market capitalization of under $5,000,000 (last time we checked) so it can go up from here.
The Bottom Line: Both Dogecoin and SafeCoin fill a different role in the cryptocurrency industry, have a different fan base, and try to bring a different solution or a funny gag to the industry. Whichever you ultimately decide to invest in, or is worth your attention, is up to how you perceive the industry and what your end-goals are in this regard.
Crypto Wallets Explained
If you’ve ever been curious about the world of cryptocurrencies, the chances are high that at some point you’ve come across the requirement of a crypto wallet. But what exactly are these wallets, and how do they work? Let’s dive in.
A cryptocurrency wallet is an application that allows you to store and retrieve your digital assets. It is your main way of interacting with a blockchain network. You have software wallets, hardware wallets, and paper wallets.
The software wallet like a web wallet, desktop wallet, or mobile wallet is offered by many cryptocurrency exchanges by default, and this is a wallet that runs on the exchange itself or can be downloaded from your computer.
The hardware wallet is a physical device, in the form of a USB thumb drive for example, that holds the data to your crypto balance without having access to an internet connection.
Last but not least, the paper wallet is just as it sounds, this printed out QR code on a wallet that you can scan at any time to access your cryptocurrency balance.
Hot wallets are wallets that are connected online in some way, while cold wallets are wallets that do not have any online connection. But this might have confused you, how can thousands if not millions of dollars be printed out on paper, or how much storage would they need for a hardware wallet? Here’s a deeper look inside of crypto-currency wallets.
What Cryptocurrency Wallets Actually Store
You see, the thing that gets a lot of people confused is the fact that your cryptocurrencies wallet does not actually store the cryptocurrencies you have. Instead, they are just a form of interaction between you and the blockchain.
They can generate all of the required information to send and receive cryptocurrency through a blockchain transaction. The main things you need to worry about though are the public and private keys.
The public key is a cryptographic code that’s used to facilitate transactions. It is used to verify the digital signature which can prove the ownership of the private key that a user holds. Think of it as your email, but for cryptocurrencies.
The private key is quite possibly the most important key that you need to keep as secure as possible. It is a sophisticated form of cryptography that allows you to access your cryptocurrency. It has a few forms, which are all depicted by a series of alphanumeric characters that make it hard for a hacker to crack. You are storing these keys on your cryptocurrency wallet, and that’s why they can fit on paper in the form of a QR code.
Crypto Wallet Summary
Cryptocurrency wallets are an integral part of any blockchain when it comes to cryptocurrency storage and trading. Hot wallets are used for quick, daily transactions and trading, while hold wallets are used to hold a lot of currencies for the long term, where you can get it out. only on a need-to basis.
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