CFD Cryptocurrencies

Whether you are already an active participant in online trading or have absolutely nothing to do with it, you must have heard various information about cryptocurrencies and their impact on the global market. Simply put, with their skyrocketing growth, there is almost no corner of everyday life that crypto-currencies haven't touched. Although the beginnings of cryptocurrencies go back almost 10 years, they have only experienced their real boom in the last few years. And what kind! In addition to being recognized by all active traders and brokers, cryptocurrencies have also become an everyday source of income for ordinary people. Read below why this is so.

Idea

The first attempt to create a cryptocurrency took place back in 1998, when the so-called "B-money" system was described. It was supposed to be a type of electronic money that would be exchanged between anonymous participants. Despite the promising idea, the project did not take off. However, that same year, American computer scientist and cryptographer Nick Szabo created Bit Gold, which would later prove to be a threat to BitCoin. Although the product itself was never fully adopted, its parts and key elements are an essential part of today's BitCoin; such as the "Proof of Work" concept, which determined the computer power needed to solve complex cryptographic puzzles. A network participant who would manage to solve a cryptographic problem would create a so-called "Blockchain" and thus earn his place in the formation of various amounts of cryptocurrencies.

This same method is the key operating principle of the BitCoin network, designed in 2008 as a response to the global crisis. One man or a group of them hidden under the name of Satoshi Nakamoto wanted to create a truly independent and decentralized peer-to-peer electronic money. Due to the general trust in government institutions and currency stability, BitCoin saw the light of day as an independent in the next few years.

Market entry

Now that you are familiar with the huge potential that cryptocurrencies undoubtedly have, you want to become a part of this growing trend, surely you are wondering how to trade cryptocurrencies!? Namely, there are various ways - you can dig them so-called mining, speculating on their price or simply buying them, either for day trading or long-term investment. Buying cryptocurrencies is currently the most popular, which is definitely supported by their enormous growth, which almost guarantees pure profit overnight.

Choosing a Broker

The first step in trading cryptocurrencies would be to choose a broker, i.e. an intermediary who would introduce you to the cryptocurrency market. Although at first it seems like an easy job, it is very easy to get lost and make a mistake. Namely, in the sea of options and opportunities that modern times and the Internet bring with them, the Internet is full not only of unsuitable brokers for your needs, but also of scams. Lucky for you, with our expert selection, you can't go wrong.

BASICS OF CRYPTOCURRENCY

Humans have been trading physical goods since the beginning of time. These currencies today are mostly printed bills or coins managed by a centralized government and monitored by financial institutions. However, in 2009, the founder of Bitcoin, Satoshi Nakamoto, launched an idea that would change the way people think about money. What if currency was governed by mathematics, not governments?

Cryptocurrencies are a digital form of money that runs on an entirely new monetary system, not regulated by any centralized body or monitored by a formal institution. There are many types of cryptocurrencies with different functions. Independent of each function, each digital currency is supported by a decentralized peer-to-peer network called blockchain.

BLOCKCHAIN

Blockchain technology ensures the tracking of all cryptocurrencies, regardless of whether they are held in a digital wallet or used in commerce. The efficiency of running such a system, however, requires an infrastructure that ensures that cheating and gaming the system is not possible. Bitcoin was the first to market, establishing a system where two people – the sender and receiver of the coins – must sign off to create a digital signature. Each person has a public and private encryption key. Every transaction is checked for accuracy, and the system is anonymous and completely transparent. At the center of this infrastructure is a book. So let's dive into how it works.

HOW CRYPTOCURRENCIES WORK

It is a cryptocurrency ledger where all transactions are published to ensure complete transparency. Keeping a ledger forces everyone to "play fair" and removes the risk of double spending. A ledger is a list of database entries that no one can change without meeting certain conditions. No one owns the ledger or blockchain of cryptocurrencies; instead, it is a decentralized meaning of self-government and self-government without the interference of outside parties.

MINING

Let's say you want to invest in a cryptocurrency, such as Bitcoin, through a major cryptocurrency exchange. After purchase, decide to spend it. What will happen now? The transaction is initially unconfirmed, which means that the transaction is not yet official, and does not become "set in stone" until it passes the verification process. Once confirmed, the transaction becomes part of the record of historical transactions placed in the blockchain.

Cryptocurrency handlers verify transactions and then add them to the public ledger. They use powerful computers to solve complex mathematical problems that are crucial to the verification process. Cryptocurrency mining is open, so anyone can confirm a transaction, and the first miner to solve the problem can add a block to their transaction ledger. This process is called the "proof of work system".

After a block is added to the ledger, the miner is awarded a reward for their efforts, which varies by cryptocurrency. For example, Bitcoin originally awarded 50 BTC, but that reward has halved to 12.5 BTC today.

THE FUTURE IS HERE

Leading cryptocurrencies will play an important role in the future, and usage has been steadily increasing over the past few years. Bitcoin is currently used in 96 countries and growing, with 12,000 transactions taking place every hour. Understanding more about cryptocurrencies is the first step, the second is to try.

Choose your favorite from our list of top brokers and trade cryptocurrencies today!