Cryptocurrency Made Simple
A Little History – And A Look To The Future.
Bitcoin – the first cryptocurrency – was invented in late 2008 by Satoshi Nakamoto as “An electronic peer-to-peer cash system”. Bitcoin became the first successful digital cash system, which was designed to be traded on a peer-to-peer based online network. It does not use a server or any central authority. The lack of a central authority means that there has to be a consensus about the balances of every transaction, so every peer needs to keep a list of transaction to approve the validity of each transaction.
This is achieved by the mere definition of any currency – verified entries of transactions in a database which can be executed or changed only when specific conditions are met. Money and
cryptocurrency are both defined by verified entries in a database of users’ accounts, their balances, and the transactions they make.
So, in short – Cryptocurrency consists of a decentralized network of peers who each keeps acomplete record of all the transactions and of the balance of every account.
Each cryptocurrency transaction is basically a file which states that Peer A gives a certain amount of chosen cryptocurrency (such as Bitcoin) to Peer B.
The spending of the cryptocurrency will be approved by the sender, using his private key – which corresponds to his public key that everyone on the network knows. The signed transaction will be broadcasted in the network to all peers, keeping their transactions record up to date. The transaction is validated without knowing the private key, after the program checks all Peer A’s past transactions to confirm that he hasn’t yet spent the cryptocurrency that he wants to send. Every validated transaction gets included into what’s called a “block”.
A “block” contains other transactions and a “hash function” of the previous block. (The “hash” is a conversion of data to a math equation consisting of a 64-character string). So each block is a part of a chain, linked using cryptography Accordingly, a blockchain is that list of linked blocks (cryptocurrency transactions records) and it is being utilized by most cryptocurrencies for that purpose. So now that you understand the basics, let’s review the two main cryptocurrency trading
methods – online brokers and trading robots.
Scroll Down to better understand your options in cryptocurrency trading – the risks, the opportunities, and how to make the right choices for you.
What is Cryptocurrency?
A digital currency which exists only online
Global and can be traded and sent across the globe
Distributed across computers networks without a central server
Dealt online directly between users without third parties
Encrypted with cryptography (special codes) to hide users’ information
Allowing pseudonymity so users do not have to provide personal information
Cryptocurrency Calculator
How To Start?
Choosing the best broker or trading robot to meet your needs and goals can make all the difference to a successful outcome of your cryptocurrency tradings.
It seems easy enough to just sign up and start trading, but your success may actually come down to choosing the best cryptocurrency broker.
As the cryptocurrency market becomes more popular, quickly growing and expanding, brokers make cryptocurrency trading accessible and easy, with simple, user friendly software and apps. But the wide range of brokers also makes the decision of whom to trust harder than ever.
To help you keep up and sort through the options on the market, we gathered all the necessary information to assist you in making a knowledgeable decision.
Check out our extensive reviews of brokers and trading platforms, which include: Background, currencies, services, software, cost and fees, success rate, tools, leverage, benefits, pros and cons – Of the top leading crypto brokers. We checked all those different variables to help you compare and choose what’s best for you.
Go ahead, dive in, and learn all you need to know in order to make the right decision and maximize your chances to succeed.
Online Brokers VS Trading Robots
Online trading starts with a choice between using an online broker or a trading robot – both have their advantages and disadvantages. But the che choice is much more than just deciding between a human broker to an automated software. Therefore, we have prepared for you a comprehensive website with explanations on both options – full reviews, pros and cons, lists of leading brokers and best crypto trading robots – Let’s start!
What is an online broker?
Usually when people refer to brokers, they have in mind an image of a person on the other side of a phone line, who will advise and execute their trading orders. Nowadays, communication and execution are much easier and faster. You can open your online account, deposit money and place trading orders through your online broker (who would do that using his online platform). The basics stay the same, it is just your communication that is now done online over the internet instead of face-to-face.
There are advantages to using an online broker, with the first being your savings on fees. Since operating costs are much lower for online firms, their fees are usually lower as well.
Also, many online brokers will provide resources such as the use of online trading software, as an added bonus. This will allow you to execute some of the trades without having the broker as a middleman.
And , of course, online trading is usually faster. Online brokers have their specialties, so the choice of an online broker should be made once
you know what you are wishing to trade.
Trading Robots
Trading robots are automated systems, or, simply put – trading software. They are also used for online trading, but eliminate the need for the middleman – the broker. The online trading robots allow you to set specific rules by which they will automatically enter or
exit trades online. They have many advantages, such as accuracy, speed, high success rate, and being able to basically work for you 24/7. You can also set them for specific time frames, or choose between fully automated mode to executing trades manually.
With that said, there are also disadvantages, as with any other online tool. It is important to understand that not all the robots are the same, and the choice of the right one for you should be a mix of determining your level of understanding, experience and skills, with the type of product and extent you wish to trade.
Forex.com is currently one of the larger online brokers that is cornering the U.S online retail trading scene.
