Cryptocurrency: How to invest in virtual currencies

crypto currency

What are the best ways to trade cryptocurrencies? This is the very first question that comes to mind when you heard or think about cryptocurrency.

Do not face the markets before you have fully assimilated all the topics. This is the necessary equipment for those who want to generate profits in the cryptocurrency market.

The online trading, be it criptovalute or not, it is always a war of information: only the right ones to be able to invest better and grow your capital. There are many Crypto Trader who wants to invest in this field.

What are cryptocurrencies?

Cryptocurrencies are a true and authentic revolution in the monetary world. States and central banks no longer print money, but complex cryptographic algorithms, which create a virtual currency with decidedly unique characteristics:

  • It is created in limited quantities: Depending on the algorithm used, we know what the amount of cryptocurrency available on the markets will be. This goes against the trend of fiat currencies, for which central banks and ordinary banks can virtually print as much wealth as they want.
  • There is no central authority: The creation of money occurs by solving very complicated cryptographic algorithms.
  • Exchanges are entered on a huge ladder, or a sort of accounting book accessible to all, in which all clients and all portfolio owners participate in the validation, providing validations and computing power.
  • They are relatively anonymous, in the sense that wallets are associated with a string that says nothing about our identity.

Bitcoin is the primary and most famous cryptocurrency

It will not be easily understood by those who do not have a powerful background in computer science and cryptocurrencies. For investors, however, there are even more interesting aspects concerning precisely this new way of understanding money.

Exchanges are very cheap: theoretically, they cost nothing, while you can pay a little something so that the ladder enters our transaction more quickly.

They are very safe: to maliciously modify the operation, you should check 50% + 1 of the connected clients, which is practically impossible.

Cryptocurrencies can be associated with other types of services, such as auto-run contracts. Cryptocurrencies potentially offer much more functionality than classic currencies.

All the best trading platforms offer these types of advantages.

Why invest in cryptocurrencies?

  • The value of cryptocurrencies is decided purely by the strength of supply and demand, without the intervention of governments or central banks.
  • Cryptocurrencies also experienced a moment of very strong expansion, which allowed those who invested in it to go and earn simply incredible amounts. Of course, past earnings are no guarantee of anything compared to the future, but such a volatile asset tempts those who want to invest as a professional trader.
  • Cryptocurrencies will also continue to be one of the best opportunities for those who invest. If we were to take into report the fact that we can also bet on their fall, that is, with the short sale of cryptocurrencies, choosing the right brokers.

The birth of cryptocurrencies: why they were created

Cryptocurrencies are a technological novelty that has quickly taken hold, after a famous paper published by one of the most interesting mysterious identities of the last few years, Satoshi Nakamoto, a creator under the pseudonym of the BitCoin system. IT and finance experts immediately or almost understood its potential, replicating the system and inventing new ones that allowed to take advantage of additional features.

For years since the release of BitCoin, for convenience, we can catalog all the hundreds of cryptocurrencies on the market, in three different generations:

First-generation cryptocurrencies:

Bitcoin is the leader of this generation, the first and, if we want, the least advanced. In this category, we find basic cryptocurrencies, generally all born as a fork of the BitCoin project. Be careful, because the fact that they are less advanced does not mean that they are less attractive to investors. To date, all or almost all the most quoted currencies belong to this generation (BitCoin and clones, Litecoin).

Second-generation cryptocurrencies:

Ethereum is the leader of this generation. This cryptocurrency generation can also implement smart contracts, i.e., automatically executed contracts and include a Turing-complete programming language, which allows much more advanced uses of the blockchain.

Third generation cryptocurrencies:

We are talking about cryptocurrencies that have increased the basic abstraction, and that allow more scalable systems. Cardano is the most popular cryptocurrency of this generation.

Conclusion: For investment, we should not be interested in whether a currency is a first, second, or third generation. However, the highest value of cryptocurrencies is all or almost the first generation.