As we continue to move forward in the digital age, cryptocurrencies are becoming a popular way of moving money around the world cheaply and efficiently. As such, it is becoming an increasingly traded asset-class.
Cryptocurrency is a technological intersection with finance. “Crypto” currencies make use of various methods of cryptography in order to secure transactions on a public ledger, called a blockchain. Unlike their centralized counterparts of the financial system, cryptos are decentralized, thus distributing control across their entire user-base. It is because of these characteristics that cryptocurrency can be sent from one party to another without the need of a trusted third party, such as a bank. This innate efficiency therefore allows all users to send and receive funds with minimal transaction fees while still keeping their funds secure.
Bitcoin, released in 2009, is generally considered the first decentralized cryptocurrency. Since then, over 6,000 altcoins (alternative variants of bitcoin) have been created, including Litecoin, Etherium, Ripple and others.
We offer all traders a range of cryptocurrencies for trading, all in the same account as Forex, Metals and Energies. Because of our maximum leverage of 1:20 for crypto trading, you can begin trading with only $10 and with a minimum lot size of 0.01 for all. See our cryptocurrency instruments available for trading.
A blockchain is a public, digital register of the transaction history for every unit of cryptocurrency, which shows how ownership has changed and when coins were transmitted. Transactions are recorded in “blocks”, which are added to the block-chain at the time they are created. Because the blockchain is stored in many locations across the network, and not in one central location, any attempt at malicious or accidental alteration of any part of the blockchain will not have an impact, due to the self-correcting nature of many inter-connected nodes that serve the chain.
The cryptocurrency markets, like other free market systems, move according to supply and demand. Their decentralization however shields them from many of the economic and political matters that normally affect traditional or “fiat” currencies. Events such as security breaches at major exchanges, news of pending regulation of cryptocurrency by governments, and major adoption of cryptos by banking systems and companies are all contributing factors to the market price of cryptocurrencies.
Much like Forex, cryptocurrencies are traded as contracts for difference, or CFDs, and do not result in the delivery of cryptocurrency to the trader like when purchased on an exchange. Like Forex, Cryptocurrency trading is a recession-proof market place. Part of long term growth and planning is diversification from different types of market risks. Trading Cryptos is a great way to spread your risk across an entirely different investment vehicle that does not correlate with the markets of your home country.
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