What is a Cryptocurrency?
Before diving head first into trading cryptocurrency, it is important to have an understanding of what you are trading, the risks involved and importantly, when to get out.
So what is a cryptocurrency anyway? Unlike traditional currencies, a cryptocurrency is a digital currency which is generated, regulated and verified independently from a central bank. What this means is that no country or institution owns or controls cryptocurrencies completely. These cryptos mostly run on a blockchain which is a distributed ledger or computing network where each participant or node holds a copy of the blockchain to verify transactions rather than a single, centralised institution.
Why do we trade cryptocurrencies?
Being a relatively new asset class, with little to no regulation, cryptocurrencies provide a highly volatile trading environment. With this volatility comes great profit potential which is why everyday people are trying to get their piece of the pie!
Are cryptocurrencies a risky investment?
In short YES! Due to blockchain technology being in its infancy, very few listed crypto coins actually have underlying products or services which are working. If you look at the market capitalization of some of these coins, you would see that they range from millions to billions with nothing to show but an idea on paper and a few hundred lines of code!
So why are they worth so much? Because people fear they are going to miss out on the next big thing and invest into coins which could become a revolutionary product or service.
With opportunity comes risk and it is not uncommon to hear stories of people’s crypto portfolio multiplying overnight but then vanishing a week later. The cryptocurrency market really is the Wild West and it is important to stay vigilant.
This website is made to help beginners understand the cryptocurrency market, to help them reduce the risks, build trading strategies and importantly, make profits! Knowledge of the market is key to becoming profitable, so take your time to understand the cryptocurrency by reading some of the articles on this website. Hopefully it will provide you with some valuable knowledge!