What is cryptocurrency
Cryptocurrency exists as a form of currency only in the digital form. Most individuals have heard of cryptocurrency, although most people tend to mistake cryptocurrency with bitcoin. Bitcoin was the first stable crypto, but other stronger crypto like Ethereum are all used in online digital transactions.
The difference between cryptocurrency and stocks
Online trading with cryptocurrency is similar to traditional investments in that traders can invest and get benefits or store for future value; the difference with traditional investments is also significant. In stocks, the investors or traders buy a share of an organization, giving the investor or trader an opportunity or access to things like voting to decide the direction of an organization. If the organizations go bankrupt, the traders are entitled to things like compensation after the creditors are paid from the liquidated assets of the organization. On the other hand, buying cryptocurrency does not guarantee the ownership of anything except the asset the trader or an investor has bought. Crypto differs from stocks because it is more of exchanging one form of cryptocurrency with another. A reduction of the value of a cryptocurrency does not guarantee a trader or investor anything in return. Other differences between stocks and crypto include;
Trading hours- Stock trading happens in specific hours, referred to as the stock exchange hours from Monday to Friday, while the volatile nature of cryptocurrency trades cannot allow the markets to close; therefore, trading happens throughout the day on all days of the week.
Regulation- Regulation is another critical consideration when it comes to cryptocurrency because, as opposed to stocks, Cryptocurrencies are unregulated. After all, the exchanges happen on peer-to-peer networks. Financial structures regulate stocks because they are financial products and matter to the public. The lack of centralization of crypto denies those not in the network any opportunity to understand the inner dynamics of the crypto or the developers working on the cryptocurrency.
Volatility- Volatility is also a shared factor between stocks and cryptocurrency because both activities involve a certain degree of risk. Stocks are linked to the organizations within which the stocks are owned, and the volatility in the prices depends on the performance in terms of the rise and falling of the organization. Cryptocurrencies, on the other hand, include more speculation because there isn’t an actual price of the cryptocurrencies yet. The latter makes cryptocurrencies more volatile and can be affected by speculation from a single individual over social media.
The explanation for the many cryptocurrencies
Cryptocurrencies are a rapidly evolving industry with more than 19,000 cryptocurrencies or projects. One of the primary reasons there are many cryptocurrencies is the rapid growth of technology and the lack of barriers to entry. There are also different uses of cryptocurrencies, with the leading use being as currencies while others exist as building blocks to infrastructures. Examples include Ethereum and Solana, which are used for building infrastructures. At the same time, developers work on creating other cryptocurrencies on top of these platforms, with the currency for Ethereum being Ether which opens up opportunities and possibilities even for other cryptocurrencies.
How to buy crypto
There are many reasons a trader or investor wishes to buy crypto. One of the reasons is a storage of value, although the high volatility makes it riskier. There are different ways through which traders can access crypto. One of the ways is to work with crypto brokers like WeBull and Robinhood, who offer their services at a commission. Another way to use trading platforms like the Crypto Boom is to access the different aspects of the crypto, including performing exchanges, owning futures, and leveraging.
Importance of cryptocurrency
There are many theories about cryptocurrencies, but digital currency opens room for financial freedom and introduces new, faster ways of conducting trading, which could change the face of investing and trading. The creation of blockchain creates a new era of utility cryptocurrencies that exist to fix the issues with traditional currencies.
