Digital Currency - Beginners Guide for Bitcoin Investors and Traders

Good Day Readers! Here I would like to share an overview of Cryptocurrency concepts which are inevitable definitions for having discussion about Bitcoin, Blockchain and Digital Asset Trading/Investing. Before reading about Trading or Investing Strategy, every Investor must understand the nature of Cryptocurrency and what are the functions available in your Exchange.

Beginners (Investor or Trader)

Cryptocurrency is a digital asset or virtual currency that uses cryptography algorithms for enabling security and artificially complicated to make difficult to counterfeit. Cryptocurrency is waving in decentralized systems based on Blockchain Technology, a distributed ledger enforced by a disparate network of computers. It does not have either any central authority to issue or regulatory authority to control.

If you would like to invest or trade in Cryptocurrency, you must know the followings to start with.

• You must have a wallet
• You should be registered and subscribed in Cryptocurrency Exchange

Cryptocurrency wallet is a digital space where your coins are stored with encrypted passwords. It is similar to your Bank Account where you safely have your Money with digital security enabled. A Cryptocurrency Exchange is a Digital Market Place where Buy/Sell happens on Cryptocurrency like Bitcoin where Cryptocurrency Trade happens for other Cryptocurrency or Fiat Currency. Coinbase Pro and Binance are couple of top service providers of Cryptocurrency Trading. You can gain knowledge on Cryptocurrency Trading by reading their Product Description and Service Details.

What A  beginner should know before starting the trades in Cryptocurrency? Because of your curiosity, you will start loosing your money in Cryptocurrency Trading of its high volatility in nature. You must start with an exchange and wallet provider with good reputation. Coinbase looks decent and it allows to trade or invest most of the popular digital coins like Bitcoin (BTC) and Ethereum (ETH). It is also not advised in margin trading until realizing the risk associated with it. I will come to Margin Trade later.

Understanding Wallet

Generally Wallets are Web based or Mobile based application which allows clients to invest in Cryptocurrency and Digital Assets. Wallets must have the following properties to provide better service.

User Experience: Clients can view their Cryptocurrency Investments, Performance Reports, Buy/Sell Suggestions, Risk Managements and Watch List.

Secured Wallets: The coins can be stored in secured e-wallets that are built on the blockchain to enable safe and secure storage of Cryptocurrency.

Multi-signature Wallets: Multi-signature wallet addresses require another user or users sign a transaction from the wallet which enables additional security.

Two Factor Authentication: 2FA is a method of confirming a user's identity by utilizing two different factors, Private Keys and QR Scanner.

Cryptocurrency Exchange Features

Binance or Coinbase Cryptocurrency Exchange has the following features which are considered as minimum vital features to serve Cryptocurrency Investors.

• Leverage Trading
• Margin Trading
• Order Sharing
• Matching Engine
• Multi-currency Wallet
• Payment Gateway Integration
• API Integration
• Admin Backend Panel

Also clients are allowed to trade by placing Buy/Sell Orders in the following Order Types.

Market Order: A Market Order will allow the user to trade Coins at the current price. The user can set a market buy or market sell in order to protect themselves from slippage in a volatile market.

Limit Order: A Limit Order will allow users to trade Coins by placing an order on the hopes that it will be fulfilled by someone else’s market order. The orders are not limited to slippage due to volatility in the market. The user can set a Limit Buy or Limit Sell.

Stop Order: Stop Order is a conditional market order where the user sells the order after reaching a specified price. A user can set a Stop Buy or Stop Sell/Loss thereby taking precautionary actions.

Copy Order: Copy Order is an order where a user receives updates on the top crypto-traders and copy their trades. This will help beginners to the crypto-trading. The top order would receive a commission based on the earnings of the copy trader.

P2P Trading: Peer to Peer Trading is unique and allows buyers and sellers to negotiate a price before a coin is transferred. The Cryptocurrency is stored on escrow, thereby ensuring safety of the coin. Only when the buyer and seller agree is when the transaction is completed.

We should also know about what are security features are available in Cryptocurrency Exchanges. The list is below

• HTTP Authentication
• Jail Login
• Encrypted Data
• Cross-Site Request Forgery(CSRF) Protection
• Escrow System

Conclusion

Intention of this article is to provide an overview of fundamentals for Trading and Investing in Cryptocurrency Beginners. You must also read and understand various technical and fundamental analysis techniques before putting your money into your Wallet. I plan to provide few successful trading and investment strategies for Cryptocurrency in my next article. In between, if you are curious on trading Cryptocurrency, please refer some successful technical and fundamental analysis techniques of Equity Trading. It will help you to understand my next article better. Now I would like to end this article and special thanks to you for reading and following.

Share: