How to start trading Cryptocurrencies?
We have come to an era where we rely on technology. Social media are a must and everything that we need can be found on the Internet. Virtual currencies or Cryptocurrencies have been with us for a long time, but in the beginning, they were not popular and not many people knew about them. In 2018 they become a big deal and everyone was buying cryptocurrencies, everyone wanted to be an investor and become rich.
For the people that don`t know what Cryptocurrencies are
Cryptocurrencies are digital assets to work as a medium of exchange that uses strong cryptography to secure financial transactions. In other words, limited entities in a database no one can change without fulfilling specific conditions. Money in your bank account is the same thing, everything is stored in a database somewhere on a server or cloud.
Making your first transaction
First of all, you need to invest time to find information about Cryptocurrencies and how it all works, it`s not that complicated but also is not that simple.
Blockchain should be your first big step. The blockchain is a mechanism and network that lives in a state of consensus. Each group of transactions is referred to as a “block” and is stored in the blockchain. The blockchain is made out of nodes. Node is a computer connected to the blockchain network using a client that performs the task of validating and relaying transactions. Every node is an “administrator” of the blockchain. It can be very confusing, but you do not need to know everything about Blockchain to make a transaction.
How do we get Cryptocurrencies on the market?
We need miners. Only they can confirm transactions. For example, Bitcoins can only be created if miners solve a cryptographic puzzle. Since the difficulty of this puzzle increases the amount of computer power the whole miner’s invest, there is only a specific amount of cryptocurrency token that can be created in a given amount of time. This is part of the consensus no peer in the network can break. Everybody can be a miner, but if you want to be a miner you need to invest some work in your computer, in fact, you have to find a hash, a product of a cryptographic function that connects the new block with its predecessor. That prevents one ruling party from abusing the network.
When you make a transaction (buy a cryptocurrency), you can not reverse the transaction. When you send the money, nobody can get it back, they are stored in the blockchain. This is very serious and a security problem, because, a hacker can steal your money from your computer you can not get it back, there is no safety net.
Neither transactions nor accounts are connected to real-world identities. That means, when you buy for example Bitcoin, you get a so-called address and with that address, no one can connect it to your real-world identity.
The transaction is propagated nearly instantly in the network and is confirmed in a couple of minutes. The transactions happen in a global network.
Cryptocurrency funds are locked in a public key cryptography system, only the owner of a public key can send cryptocurrency.
To buy a cryptocurrency, you do not need permission it`s a software that anybody can download for free.
Most cryptocurrencies limit the supply of the tokens. All cryptocurrencies control the supply of the token by a schedule written in the code. Cryptocurrencies don‘t represent debts. They just represent themselves. They are money as hard as coins of gold. Example: Bitcoin as a permissionless, irreversible and pseudonymous means of payment is an attack on the control of banks and governments over the monetary transactions of their citizens. As money with a limited, controlled supply that is not changeable by a government, a bank or any other central institution, cryptocurrencies attack the scope of the monetary policy.
Cryptocurrencies are digital gold. Sound money that is secure from political influence.
