Cryptocurrencies have risen in recent years as one of the aspects of quick and profitable investment in the digital trading market. We have come to a time where we can only be under the virtual world’s influence and artificial intelligence in various aspects of our lives. This article will discuss cryptocurrencies and what are their types? How are cryptocurrencies can be bought and traded in the digital currency market? Stay tuned to get answers to your questions on this topic.

What are Cryptocurrencies?

It is a type of digital asset that began to appear in 2009. It can be defined as an electronically recorded financial balance. It is a digitally available currency that does not have any physical presence, such as banknotes or coins. Still, it has the characteristics of physical currencies and allows immediate transactions in specific areas. It can be used in the buying and selling process for particular services and goods and in certain societies that would enable trading in them. Unlike traditional currency, virtual assets are not managed by banks or financial authorities but are subject to regulation or self-management by groups via the Internet.

What is the difference between cryptocurrencies and electronic currencies?

Cryptocurrencies

As we mentioned earlier, virtual currencies or digital assets do not have a physical presence, such as Bitcoin, characterized by being exchangeable and convertible into regular cash currencies, such as converting bitcoin into Dollars or Euros.

Electronic currencies

They are the currencies and funds in paper and physically on the ground, such as Dollars. Still, they are stored in electronic form, called electronic currency, held on electronic accounts such as money in bank accounts and electronic banks. An example of electronic currency When you transfer your money from a PayPal account to a MasterCard account, it is transmitted. The account balances changed electronically without the need to move them manually.

What are the types of cryptocurrencies?

The first launch of digital assets was in 2009. There are many types of cryptocurrencies, but we will mention the six most prominent types, the most widely used and common:

  1. Bitcoin
  2. Ethereum
  3. Ripple (XRP)
  4. Litecoin
  5. NEO
  6. IOTA

Bitcoin and Ripple are the most popular and widely traded cryptocurrencies. Bitcoin was the first digital currency introduced to the world, so many people want to start investing in Bitcoin because it is one of the most vital digital assets. Smartly investing in Bitcoin has achieved a lot of profits for many investors, and it is still one of the strongest cryptocurrencies. It has a strong influence on the rest of the cryptocurrency prices.

How to trade Cryptocurrencies?

Before making the purchase and entering the digital market, you must be aware that digital currency trading takes place through electronic platforms, which are divided into two parts, as follows:

Central platforms

Cryptocurrencies can be bought using the physical fiat currency, and this trading is central because your money is stored in central banks.

Decentralized platforms

Trading between cryptocurrencies, such as trading between Bitcoin and the Ripple, is done through decentralized electronic platforms. This type of trading carries a high level of risk and piracy or your money’s disappearance if you do not deal with safe, reputable platforms with high security and privacy level.

How are cryptocurrency prices monitored?

The prices’ monitoring is done through the cryptocurrency index platform, defined as a website or electronic platform. Like other investments, the index and the price of cryptocurrencies change according to external variables and the movement of buying and selling.

At the end of this article, you must be careful before trading in cryptocurrencies, and you must choose reliable platforms to avoid scams and fraud.

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