Bitcoin was the first Cryptocurrency to emerge as a digital asset. The technology was designed to facilitate electronic transactions without relying on trust or central authority and uses Blockchain technology to function.
Appealing to many, there is no central oversight from any authorities or government body when it comes to decentralized digital assets. Everything within the network is managed by peer to peer users: nodes or miners. There are lots of nodes around the globe constantly working on verifying and maintaining the ledger – keeping a record of transaction history without the need of any single body or organization being in charge of it. The network and ledger are decentralized by design.
The nodes/miners spend lots of time, effort and not to mention money on computer equipment and high energy bills which come with powering high tech machines around the clock. Miners are in a race to solve a complex mathematical puzzle and solving the puzzle is proof of work. The race stems from a miners desire to gain the reward of solving a puzzle and creating a new ledger.
An algorithm known as a cryptographic hash system governs the security of the system and security comes from the difficulty of solving the puzzle.
Much like mining in a diamond or gold sense, miners on the Blockchain are rewarded for their efforts in the shape of exchange tokens or Bitcoin for each block mined.
When Bitcoin was first introduced back in 2009, the reward for mining a block successfully was 50BTC. A staggering amount at today’s exchange rate which works out as $414,269.50.
Each time 210,000 new blocks are added to the Blockchain, the reward for mining is halved. This is referred to as ‘the halvening’.
The next halvening is fast approaching!
Historically the ‘halvening’ has occurred twice to date. Once, in November 2012, where the reward halved from 50BTC per block down to 25BTC, and secondly, in July 2016 where it was reduced from 25BTC per block to 12.5BTC. At the time of writing, miners are paid 12.5BTC per block, which equates to $103,567.38.
Occurring every 210,000 blocks (roughly every 4 years), the Halvening is crucial to create predictable scarcity in the market, meaning Bitcoin (and all other Cryptocurrencies) will likely shoot up in value. The next Halvening occurrence is predicted to hit at the end of May 2020, meaning that successful miners will only be rewarded with 6.25BTC, drastically reducing the reward earned for each block.
Today’s estimated cost of mining a block successfully is an average of $2,500 per Bitcoin with costs building up to form the electricity required to run specially built supercomputers.
Trading Crypto Currencies
To get involved in Crypto and to send and receive digital assets, consumers must first have a digital wallet. There are hundreds of wallet providers out there so it is important to research and find a wallet best suited to your wants and needs.
As the popularity of digital assets continues to grow so does the number of alternative cryptocurrencies and crypto providers available.
The choice available to consumers online is enormous. There are thousands of token exchanges, wallet providers, trading platforms, educational materials, whale alerts and so much more.
When consumers think about how to gain money from Cryptocurrencies, people are often stuck in one thought process of profitability in that we:
- Purchase some Crypto,
- Hold or HODL (Hold On For Dear Life)
- Wait for the value to increase naturally and then
- Sell when in a target profit range
There is an ever-increasing demand now to speculate on the price of Crypto and trade the currencies opposed to just holding.
Much like Forex trading, there are now many online broker platforms that offer its users to trade a range of assets such as Forex, stocks, indices and a range of Cryptocurrencies.
New on the market is a trading platform specializing in offering its users a range of digital currencies to trade on the award-winning MT4 platform.
CryptoRocket (https://www.cryptorocket.com/) offers its users over 200 tradable assets including more than 30 Cryptocurrency pairs. Traders can enjoy maximum leverage of 1:100 on digital assets as well as a maximum of 1:500 on over 55 fiat currency pairs.
The Cryptocurrencies available at this fresh and exciting new broker range from the commonly known, big names of the cryptosphere such as Bitcoin and Ripple to lesser-known coins such as Zcash.
Points to consider when trading digital assets
Different factors affect the movement of the price of crypto whether moving up or down. These can include massive volumes of digital assets being moved around the market or from wallet to wallet. As a trader, you can access Bitcoin Whale Alerts and see for yourself when large volumes are moved. These are often in the tens and even hundreds of millions of dollars worth which can in turn drastically affect the price of an asset.
Just like Forex, the higher the demand for Crypto, the higher the price will be. Often government instability heavily affects the supply and demand of digital currency. Also, the purchase of the coin by traders purchasing on speculation can affect the demand and therefore the price.
There is a string of benefits attached to trading Cryptocurrencies which has started to attract a younger target market with more and more millennials getting involved in trading their favored digital assets.
There is money to be made on the fact that Crypto markets are considered to be volatile. When we think about liquidity in the market, this gives better pricing, faster transaction speeds and increased accuracy for technical analysis.
Generally, the cryptocurrency market is considered to be illiquid because the transactions are dispersed across multiple exchanges, which means that relatively small trades can have a significant impact on market prices, opening the door for big gains if on the right side of a trend.
Other benefits include brokers which allow anonymous trading allowing traders to rest easy that they will not have any personal information passed on to third parties.
Another great benefit is the speed and ease of access to trading from brokers which offer Crypto as their primary payment solutions. Using Bitcoin as an account funding method is a super-fast way to get involved in the trading market as deposits can land within minutes. This deposit method obliterates outdated methods such as Bank wire where traders would often have to wait up to 7 business days until the funds could be reflected within a trading account. Not to mention the high cost of sending wire transfers compared with other payment solutions.
The delays caused by older, more traditional deposit methods can cause delays in access to trading which can in turn negatively impact a traders’ profitability. Traders who are interested in trading Crypto can benefit from a range of online forums and enjoy being part of a rapidly growing Crypto community.
We can see the sheer growth of digital assets in recent years and it appears that interest in trading cryptocurrencies as well as Forex has spiked especially amongst young people.
There can not be too much education when it comes to this modern-day currency so users should educate themselves, learn about the possible impacts of leverage in trading. High leveraged trading is of particular significance considering the volatility of the Crypto market.
The more we learn now, the better standing we should have in the future. This is uber important Crypto is here and looks like it is here to stay!
Start trading digital assets today at CryptoRocket (https://www.cryptorocket.com/) who pride themselves on rapid access to trading markets. Enjoy lightning-fast execution speeds, in an environment which facilitates Bitcoin as its primary deposit and withdrawal methods. Traders can rest assured that any withdrawals will be processed and delivered to your Crypto wallet on the same day of submission.
Join the Crypto revolution today!