A cryptocurrency can be simply defined as a digital currency that exists purely in the form of a code and has no physical presence whatsoever. The term “crypto” is included because it makes use of secure encryption technology for transaction verification. The backbone of cryptocurrencies is the concept of “blockchain” - a decentralized peer-to-peer public ledger system. This removes the need for third-party processors or approvers such as banks or governments.
The cryptocurrency space is fast growing with the addition of new coins and tokens each month. Bitcoin (BTC, Ethereum (ETC), Ripple Coin (XRP), and DogeCoin (DOGE) are some of the most well-known cryptocurrencies.
What is Cryptocurrency Trading?
While devoid of any physical presence, cryptocurrencies carry an inherent monetary value that has provided them legitimacy as financial assets. Like any other trading instrument, cryptocurrencies can be bought and sold for profits. This process of buying and selling cryptocurrencies with the aim to book profits is called cryptocurrency trading.
To trade cryptocurrencies, you either need either a crypto exchange (such as Binance or WazirX), or you need CFD brokerage firms such as Fxedeal. To trade with an exchange, you will have to create an exchange account with a crypto wallet to store the different coins and tokens. You can then sell when the coins when their price is more than the price at which you purchased those coins.
Alternatively, you can take the services of a CFD brokerage firm where you do not need to own the coin or token. You can simply speculate on the price changes and book profits on successful speculations.