All about cryptocurrency investing
From the original Bitcoin to newer cryptocurrencies like Lucky Block, it may seem like you hear about a new type of crypto in the media every day. To help you dip your toes into the crypto waters, we’ve outlined some popular cryptocurrencies that you should know below cryptoloko.
How exactly are crypto assets different from traditional assets? The difference may not seem obvious at first glance. In an age of online banking and cashless payments, it may seem like our money is already digital. So what exactly is the difference between sending an electronic funds transfer (EFT) versus a crypto transaction? What’s the difference between owning crypto in a personal wallet versus having cash sitting in a bank account that’s accessible through an app on your smartphone? Those things may seem very similar to each other at first glance but are very different from a fundamental perspective.
After you purchase cryptocurrency, it’s necessary to store it securely so you can prevent theft or other potential risks for loss of funds. You can store your digital assets in a crypto wallet or through wallet services offered by an exchange or crypto trading platform. Not every exchange or crypto trading platform provides wallet storage though, so make sure to look into this before you buy the cryptocurrency.
All about cryptocurrency trading
A centralized exchange will typically hold the private keys to users’ crypto wallets. When you sign up to trade on a CEX, you’ll be required to go through a “Know Your Customer” (KYC) protocol, which confirms your identity and is meant to prevent the use of the exchange for crimes such as money laundering.
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Unlike traditional currencies, cryptocurrencies exist only as a shared digital record of ownership, stored on a blockchain. When a user wants to send cryptocurrency units to another user, they send it to that user’s digital wallet. The transaction isn’t considered final until it has been verified and added to the blockchain through a process called mining. This is also how new cryptocurrency tokens are usually created.
If you believe a cryptocurrency’s value will increase, you can go long (buy). Conversely, you can go short (sell) if you believe the coin’s value will drop. That means you could make money if the price goes in either direction, as long as your prediction is accurate.
Cryptocurrencies are more popular than ever, and adding some crypto holdings to your portfolio can be a good way to diversify and protect yourself. Most experts recommend keeping your crypto holdings to 10% or less of your total portfolio to minimize risks associated with volatility.
Futures accounts are not protected by the Securities Investor Protection Corporation (SIPC). All customer futures accounts’ positions and cash balances are segregated by Apex Clearing Corporation. Futures and futures options trading is speculative and is not suitable for all investors. Please read the Futures & Exchange-Traded Options Risk Disclosure Statement prior to trading futures products.
All about cryptocurrency
Many long-standing institutions have begun to offer consumers the option of buying crypto. These platforms also allow users to purchase other financial products, such as stocks and bonds. Traditional brokers tend to offer low trading costs but fewer crypto-specific options than cryptocurrency exchanges.
Cryptocurrency networks display a lack of regulation that has been criticized as enabling criminals who seek to evade taxes and launder money. Money laundering issues are also present in regular bank transfers, however with bank-to-bank wire transfers for instance, the account holder must at least provide a proven identity.
The first cryptocurrency introduced was Bitcoin, the most commonly traded one. Ethereum is the second most valuable cryptocurrency and can be used for complex transactions. Other more common cryptocurrencies, called altcoins, include Cardano, Solana, Dogecoin, and XRP.
However, it’s important to note that to some, cryptocurrencies aren’t investments at all. Bitcoin enthusiasts, for example, hail it as a much-improved monetary system over our current one and would prefer we spend and accept it as everyday payment. One common refrain — “one Bitcoin is one Bitcoin” — underscores the view that Bitcoin shouldn’t be measured in USD, but rather by the value it brings as a new monetary system.
The network assigns a math problem to your computer (node) if you are selected. After validation is done, your work is broadcasted to the entire network. If the network comes to a consensus, this block is added to the blockchain and you are rewarded in fees. Ethereum does not currently have a block reward; it is therefore a deflationary digital asset in 2023.
