Cryptocurrency exchange, digital currency exchange (DCE) or Crypto exchange is a corporation which enables online traders to trade cryptocurrencies in South Africa and around the world. With this type of online trading, you can trade currencies such as Bitcoin, Ethereum and Litecoin. Bitcoin is one of the most popular forms of cryptocurrencies at the moment around the world.
Trading Cryptocurrencies is not different from trading forex. Cryptocurrency exchange covers a whole lot of other currencies including Litecoin and Ethereum just to mention a few. In this piece, we will use Bitcoin as an example so that you will understand it better.
For example, you can start Bitcoin trading with an online trader that allows BTC with a different currency. Once you have done your research, you can then open an account with a Forex broker.
Learning Bitcoin trading is easy especially if you have a basic understanding about forex trading and other currencies. To learn Bitcoin trading, you must be able to interpret the charts and analyse global trends. Without an understanding of this, you won’t go anywhere. If you want to opt for a mentor, you can get a mentor who will help you get your head around Bitcoin trading. The main tool used for this type of Cryptocurrency is “Technical Analysis”. This will help you know when to enter or leave your trade.
Cryptocurrencies and other currencies around the globe are government fiat currencies. Since we are using Bitcoin as our example, both Bitcoin and some currencies are not that different. Bitcoin and gold are the same because there is a finite supply which is different from fiat currencies. We often hear about Bitcoin mining, but do you know what it means? Creating new Bitcoins by using special software is called “Bitcoin mining”.
To date, we have about 46 active Cryptocurrencies and growing. Below are types of Cryptocurrencies that we have identified:
This passage teaches you about Cryptocurrency basics. It is important for forex trading beginners to understand and know what cryptocurrencies entail and how it works.
Cryptocurrency refers to all the encrypted decentralized digital currencies like Litecoin, Bitcoin, Ethereum’s Ether and many more. As like any other online transactions, cryptocurrencies use cryptography to create coins and secure transactions.
Cryptocurrencies are available online to the general public but they are secured. If you want to trade these coins, you must have an online trading account with a forex trading broker. Normally, online traders use forex trading apps provided by forex brokers to exchange cryptocurrencies.
There are so many cryptocurrencies traded on cryptocurrency exchanges every day. This means that their market is fast growing despite their market caps and volatile price movements.
In the United States, cryptocurrency is legal and taxable, however, you are not taxed in Bitcoin. You return tax when you invest in property. If you are new to cryptocurrency, don’t be shy to ask if you don’t understand. There are lots of online guides to cryptocurrency for beginners.
As explained above, cryptocurrencies such as Litecoin and Bitcoin are digital currencies that use cryptography as a way to help ensure the security and data encryption. People can trade cryptocurrencies for different reasons. Some forex traders want to run businesses online while others want to buy goods.
Unlike other forms of online tradings that are issued by a central bank, cryptocurrencies are not backed by them. However, this might change because the regulators and governments are busy finding new rules which will monitor the use and sale of cryptocurrencies around the world.
Cryptocurrencies work the same way as sending and receiving emails. In order for you to start your cryptocurrency, you need an email address and a password that you keep it to yourself only. This is similar to cryptocurrencies, you need an email address called a “public key”. But this address you are assigned with, you share it with other people online.
After you got the address, you will get a private password called “private key” but you don’t share with other people. You will use it to send other forex traders cryptocurrencies from your address. However, bear in mind that unlike emails, this doesn’t really work the same way as emails.
Cryptocurrencies are bought online through trading platforms called cryptocurrency exchanges. These cryptocurrency trading platforms allow online traders to buy and sell currencies online. It’s important for beginners and advanced currency traders to be cautious of online scams and cyberattacks which may hack your trading platform.
Since these platforms are subject to being hacked, it’s always important for one to keep their private keys secured and not share with anyone.
Due to technical problems with some apps, you may experience placing orders or buying currencies. However, some companies now sell cryptocurrencies at ATMs which allow traders to deposit the money to buy a cryptocurrency. Before you buy any currency at a physical kiosk, make sure that you understand terms and conditions that come with it. Remember, all transactions are subject to being charged.
Before you get started trading cryptocurrencies, you need to understand that it comes with risks and its risks include:
We hope you have learnt something from our cryptocurrency basics guide. Remember to be careful when you trade anything online.