Many people are not aware of the importance of cryptocurrency and the impact it has on the world. Cryptocurrency can be likened to a digital form of cash — its utility is that it can be used in the form of electronic money. You can use it to buy a new bag you have been eyeing or to pay friends for your share of the bar tab.
The best part of cryptocurrency is that it is digital and can be sent anywhere in the world in a matter of seconds. It’s also much easier and costs less than PayPal or bank transfers. Because no physical institution controls or regulates cryptocurrency, it can be used globally to send currency without borders or banks getting in the way.
As a beginner, you need adequate information on cryptocurrency in order to invest wisely and avoid getting scammed. Here’s what you need to know.
Why is it Called Cryptocurrency?
The word cryptocurrency is a combination of two words currency and cryptography. It uses advanced technology and servers to secure your funds so nobody else can get access to them
Let’s have a look at some reasons why cryptocurrency is a more secure and better system than traditional cash.
- You don’t need permission to use your cryptocurrency. While centralized payment services can freeze accounts or prevent transactions.
- The system design of cryptocurrency makes it impossible for hackers to shut it down.
- It offers a fast and cheap payment method that can be done within seconds.
Different Coins and Tokens
Before investing your money, you need to know the basics of coins and tokens since they are not the same thing! Not all cryptocurrencies are the same. Some common ones that we often hear or read about include the king of cryptocurrencies, Bitcoin, Ethereum, and the original exchange coin, BNB.
You can find out more about popular coins and crypto exchanges by reading articles and blogs online like one by CryptoVantage.
What is Blockchain Technology?
This is the technology that the vast majority of digital currencies are based on. In other terms, blockchain is a database that you could create in a spreadsheet with minimal effort.
Even though you can make some changes, a blockchain is immutable. It means that if you change a block, it changes the fingerprint.
The fingerprint is included in the next block so that block is changed too. So even a short change becomes quite evident. It makes the technology safe since you can’t change the blocks without everyone noticing.
What Should You Know Before Trading?
When we look at the term trading, it implies the process of generating profit. You may have seen traders get in and out of positions all the time, but what you likely don’t know is how they know when to enter and pull out.
One of the best ways to make sense of the cryptocurrency market is through an approach called technical analysis. The job of technical analysts is to look at the charts, price history, and other types of market data. They use this information to find the best deal that can help them earn major profits.
You can work with a professional to help you decide when to make investments and which cryptocurrencies can be profitable for you in the long run.
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