With its promising profit, bitcoin is gradually attracting a lot of people to own and even joined the trading industry.
Well, hearing from some of the world’s wealthiest person talking about how they earn and gain profit from it, is of no surprise that a lot will also try to imitate what they do. While that is most likely to happen, it would still be better if you have gained enough knowledge of how things work in this 21st century trading cryptocurrency.
Cryptocurrency trading explained
Cryptocurrency trading is the process of purchasing and selling cryptocurrencies. It is a 24-hour market that is incredibly volatile – this means that every trading move that you come with a lot of trading risks. Even if you will be trading for the most popular cryptocurrency such as Bitcoin, there is always a high chance that you will suffer from considerable volatility. However, there is always a great thing on its other side.
One of the amazing things about crypto trading is that it simplifies the process of involving yourself in the cryptocurrency world without even bothering yourself to mine. Why bother yourself in mining for cryptocurrencies when you can get one through trading?
Other types of cryptocurrencies
While bitcoin is the one that encourages you to enter into trading, it is just one of the many digital currencies that you can trade inside cryptocurrency trading. There are alternative coins or “altcoins” that also share the same market with bitcoin. These are:
- Litecoin – this type of cryptocurrency was created in 2011. If bitcoin will have a twin, there is no doubt that this type will pass as its twin. Although they may be nearly identical, Litecoin is faster than bitcoin when it comes to processing speed. Its adaptation of Lighting Network and Segregated Witness as well as other improvements, it had boosted the speed of this cryptocurrency.
- Ethereum – after several years, this type was born, known, and since then used in the trading industry. Although it may be younger compared to Bitcoin and Litecoin, who would have thought that it would become popular and is now the widely used cryptocurrency. Thanks to its smart contracts and digital agreements, this had fueled up, giving a much faster processing speed compared to others.
- Ripple – launched in 2012, this type isn’t just a cryptocurrency – it is also a digital payment network. It is also a global settlement network where it is designed to make a fast, low-cost, and secure way of transferring money. One thing that makes Ripple different from other cryptocurrencies is its transaction. Unlike others, it isn’t just focused on a person-to-person type of transaction; it focuses on transferring sums of money on a far larger scale.
How can you trade cryptocurrencies?
If you are entering the trading industry through any cryptocurrency trading platforms that you prefer, there might be a bit different, but actually, the process is just the same. The exchange of bitcoins to altcoins usually happens on a cryptocurrency exchange site.
Whether you choose to trade through the help of the website’s trading algorithm or do it your way, its outcome will depend on which option you choose. With a lot of formulas being advised online, it just expected that it is a bit confusing, especially for the new traders. But when in doubt, there is nothing wrong with going back to the basics.
If you were thinking of trading bitcoins, always remember the buy-low+sell-high formula. This basic formula applies to cryptocurrencies’ pattern of the price that changes between particular price points. Or if you feel that trading “manually” is a bit exhausting, you are still welcome to find other bitcoin pro.