The Rise of Cryptocurrency: A Beginners Guide to Trading
2021 is the year of cryptocurrencies. Whether you are a seasoned trader or if you have just started your trading journey, it is practically impossible to be online nowadays and not come across the terms “cryptocurrency” or “bitcoin”.
But what are cryptocurrencies? Is Bitcoin really the future of finance? The digital gold that will change the world as we know it? Or is it simply a trend that at some point will fade away? In this guide, we will take you through everything you need to know. Read on for all things crypto and learn to build your crypto empire with Hive.
What is Cryptocurrency?
The idea of having some kind of digital currency is not new. As soon as the internet established itself as the ubiquitous technology we know today, researchers and analysts point down how important this interconnected aspect of the online age would be for finances.
As the internet became more sophisticated, online transactions became easier and part of our online routine. However, this solution requires a central entity – said banks or providers – to validate every single transaction, for a fee.
Yes, physical exchanges, assures that funds are changing hands from one entity to another. Moreover, you make the same transaction online a middleman will get a cut of their operational fee at both ends of the transaction. As online transactions became more noticeable, that in turn increases the power of those centralized entities. Thus, if they control the system, they have all the power.
For years, many engineers, researchers, and developers tried to develop their own solutions to the “middleman” problem. Nonetheless, it was only in 2009 that Satoshi Nakamoto came up with the best solution known to this day: the Blockchain.
Blockchain, Bitcoin and the Benefits of Crypto
Instead of validating transactions through a centralized entity, the blockchain operates by making every member of the network a potential validator. A transaction must be validated on the Blockchain before it is allowed to be fully carried out.
The secret to this powerful tool is giving anonymity to people while keeping all transactions open. You can actually check every single transaction made using bitcoin, while not knowing the involved parties.
This system allowed Bitcoin to kickoff the cryptocurrency era. Soon after, other systems pivoted into similar solutions. By developing this new technology, Satoshi Nakamoto created an entirely new market, that is constantly growing.
By developing more and more nodes it is constantly evolving the technology required. While the original player Bitcoin has a higher carbon footprint than many countries, nowadays cryptocurrencies can be as efficient and as green as their developers desire.
The benefits of the blockchain and cryptocurrencies go well beyond finances. Features of the Blockchain and crypto can often be overlooked:
- The possibility of developing smart contracts.
- To automate financial processes.
- Messages attached to any Blockchain transaction cannot be erased, so they can even be used as a tool to fight oppression worldwide.
Types of Crypto
Nowadays, cryptocurrency evolved to a point where there are over 2,000 different projects, with unique features and applicability. The main distinctions lie between Cryptocurrencies and Crypto tokens.
The division deals with the capabilities of its own blockchains. Cryptocurrencies are assets native to a specific blockchain. For instance, you can only buy and sell Bitcoin and Dogecoin on their respective blockchains as they are the proprietary asset for that network. For years the US Dollar has been seen as the tentative planetary currency worldwide. Similarly, to carry out online transactions, digital currency serves as proof of value between parties.
On the other hand, crypto tokens are “smarter” ways of dealing with a blockchain transaction. In theory, as they are not attached to a specific network, it is possible to trade a token in a third-party blockchain. Despite ETH been created by the same team behind the Ethereum network, it is an asset that can be ported to other places for different applications.
Trading Crypto at Hive Markets
Master the cryptocurrency trade at Hive markets. We are available for deposits and withdrawals 7 days a week, with a straightforward and direct process that speeds up your trading strategy. We are continuously adding payment methods to enhance our trader’s experience.
Our platform provides deep liquidity sourced from some of the best banks around the world. This way we set the bar as high as possible and give our traders the service we know they deserve. With our ultra-low Spreads compromise, we assure our customers have top-notch industry-leading pricing to help you maximize your profit without sacrificing on service. Trade global markets with spreads as low as 0.1 pips.
With Hive Markets, we ensure 100% fund security. Not only that, but traders and Affiliates within our community have instant access to the best products and offerings in the market. Our trading tools can help you make every decision count.
Our team is here to support you at any time, anywhere. Trade cryptocurrencies with confidence and benefit from 24/7 customer support. Our team of specialists is on hand to help every step of the way. Join Hive Markets today!