An Introduction To Cryptocurrency Trading: What Makes Crypto Unique?
The world of cryptocurrency has come a long way since bitcoin was first introduced in 2008.
In the time since its launch, thousands of new coins have been launched to capitalize on the momentum and promise these new digital currencies hold for the future. They come in all shapes and sizes, with different functions, and distinct architectures.
However, the one common characteristic that unifies them all is tradability. With new entrants to the space being announced daily, the excitement of trading and investing in these new cryptocurrency assets is unrivaled by traditional financial markets.
Why Invest in Cryptocurrencies?
Cryptocurrency exhibits many attributes that make them ideal for traders and investors with a keen eye for earlier adoption. We cover some of its most unique characteristics here:
1) No Centralized Authority to Print More
Cryptocurrency initially arose from the idea that centralized authorities were wrongly manipulating currencies to the detriment of users.
Take for example the US dollar. Every time the US Treasury prints more money and adds it to the financial system, it lowers the value of every other dollar in circulation and can also contribute to inflation.
Over time, this erodes the value of dollars and reduces the incentive for holding, instead motivating spending. One of the characteristics that separates cryptocurrencies is that there is no centralized authority overseeing the digital currency. Generally, only a finite amount of cryptocurrency coins or tokens are printed or “mined”. This means that over time, the underlying value cannot be reduced by printing more.
2) Decentralization Restores Power to Users
One of the reasons why cryptocurrencies have gained greater awareness is that they reduce dependency on centralized institutions.
By decentralizing authority, cryptocurrency depends more on its participants instead of established gatekeepers like government treasuries and central banks. The idea behind many of these digital currencies is to help expand the realm of financial services to underserved communities.
3) Revolutionary Technology Increases Transparency
Behind the cryptocurrency revolution is blockchain, a new architecture that is likely to be the future platform for many other technologies.
One of the chief reasons this technology is so potent is because it relies on the power of all its participants instead of a centralized system or entity. The blockchain ledger is distributed amongst thousands and even millions of nodes simultaneously. This enables every participant to see a real-time record of all transactions that occur on the system. This not only increases accountability, but also adds transparency to the system, improving trust and confidence in its operation.
Open For Business All Day Every Day
Unlike traditional financial markets which are only open for certain hours and closed on weekends, cryptocurrencies trade around the clock, 365-days a year.
This means an endless number of opportunities are available for investors desiring to participate, no matter the time of day or day of the week. With so much happening, there is always a chance to involved, irrespective of time zone of global location.
Investing Without Borders
Thanks to its functionality, cryptocurrencies and coins are not bound by geography.
Unlike stocks and bonds which can only be traded at certain venues in certain geographical locations, cryptocurrency breaks down borders and barriers. Through its novel design, cryptocurrency brings together the entire world of web-connected participants.
Cryptocurrency may have been around for nearly a decade, but only now is it really gaining the recognition it deserves. Read on to see where crypto is traded and common analysis techniques in Part 2 of An Introduction To Cryptocurrency Trading.
To gather more information about how you can participate in the cryptocurrency revolution, visit Geniuex today to learn more!
