When discussing the state of the financial world and the economy many people have started to lose faith in the usual ways people have used in the past to trade and make money, buy products online, pay for video games like LoL, and many others. Well, it doesn’t mean that the stock market itself has become toxic to individual traders it is true that as become much more difficult for people to enter it if they have little capital to invest. This is why many people have started to look into the different avenues available to them. One such avenue of course is the world of cryptocurrency. If you’ve been paying attention to the cryptocurrency culture, you might have noticed that it has become easier and easier to get into it. So, let’s take a deeper look at how you can get into cryptocurrency and crypto trading by learning your ABCs of tech investment.
Cryptocurrency, what is it?
You might have heard the word many times in the past few years without completely understanding what it means. Essentially cryptocurrencies are a decentralized virtual currency that is named after the security processes that exist to keep it secure. Therefore, cryptocurrency is a currency protected by cryptography. Another important thing to know about cryptocurrency is that it exists on something called the blockchain which is in the simplest terms possible an ever-evolving database composed of many blocks of information. So, when we talk about the blockchain it is essentially a chain of blocks that is composed of transactional data including the cryptographic security pass called a hash. This is essentially what cryptocurrency is in the most technical terms.
Crypto coins
While most of the talk about cryptocurrency revolves around the popularity of Bitcoin it’s important to understand that a lot of people trade in different coins. This is why for example things like Ethereum exist and I’ve become very profitable and popular over the past decade or so. Although many coins are worth investing in it is important to investigate the background of rising coins and smaller coin communities because there is such a thing as scam coins that simply exist to fool people into investing in what we call a rug pull. This is why in many cases people prefer to work with firms or with trusted agents to prevent potential currency loss in scams or downturns in the value of certain coins.
Firms and prop trading
Many people for example, do prop trading with Funding Frontier or other similar firms because these firms don’t trade with the funds of clients. Essentially what happens with these firms is that by not using the funds of clients and using their funds they can avoid certain regulations as they are liable for their risks. You will see that proprietary trading firms exist both for stocks as well as cryptocurrencies. This is why you might want to look into these types of firms to see if their services can benefit you and the way you want to interact with the financial world whether it is cryptocurrency or stocks and bonds.
Laws and regulation
While a lot of the cryptocurrencies are decentralized it is important to realize that it doesn’t mean that they are not subject to local laws. While it seemed that way for a while the reality is that more and more countries or doing their due diligence and looking at the cryptocurrency world and regulating it. This is why in many countries not reporting your gains to cryptocurrency is a crime and considered fraud. While cryptocurrencies are pretty hard to trace currently there is also a very real issue with the fact that people use cryptocurrency as a money laundering technique which means that there are a lot more eyes on these cryptocurrency trading hubs than there used to be. So, it is very important to be careful when doing business with unknown quantities.
