With bitcoins and other kinds of cryptocurrencies making such a big splash in 2017, people all over the world are now trying to get their hands on bitcoins to be able to make a worthy investment. But because of how new the concept is to most people, there are a lot of things that people don’t know about cryptocurrencies and the trading platforms used to carry out these transactions. Here are some of the top ten questions that people often ask when it comes to cryptocurrency exchange and all its intricacies.
- What are cryptocurrencies and where do they come from?
Cryptocurrencies are a form of online currency that is usually got from the process of ‘mining.’ Cryptocurrencies aren’t something that you can hold or withdraw in a physical form but work by giving the user a string of code that translates to a currency.
- Who are cryptocurrencies regulated by?
One of the main reasons why cryptocurrencies are so unique is because they aren’t regulated by any governmental body. They are created and controlled by a set algorithm which allows the creation and use of this currency.
- How is the value of a cryptocurrency determined?
The drop and inflation of bitcoins mainly depend on the market and its capitalization. It works like a standard economy, increasing when it is in higher demand, and decreasing when there is no one to buy it.
- How does a trading platform for cryptocurrency exchange work?
Through a trading platform, users can put in real money and exchange it for bitcoins. It works similar to a currency exchange, and give you your monetary amount depending on the co-relating value of it at the given time.
- Do you need a trading platform to buy cryptocurrencies?
You don’t always need a trading platform to be able to carry out cryptocurrency exchanges, but it sure does make the process of owning bitcoins a lot easier. The only other option to get bitcoins is to mine it, which may not be ideal for someone who isn’t familiar with coding concepts.
- How do you find a good trading platform for cryptocurrency trading?
The best way to determine if a trading platform is good or not is to check the reviews of people who have used the platform. In addition, different platforms have competitive exchange rates, so be sure to look carefully at all your options before you narrow down on one.
- Why should you invest in cryptocurrencies?
As evidenced by the increase in the rate of cryptocurrencies in 2017, the profits that one can make on this are only going to increase. If you are looking to make a good investment that has a higher chance of yielding profits shortly, then you should invest in it.
- What would be the best time to sell your cryptocurrency?
Buying cryptocurrency brings out both sides of an investment – feeling elated and hostile at the same time. It can be dicey to make a graceful exit, as there are no fixed patterns to follow when it comes to cryptocurrency. One should exit if they feel their money is tied up and could have been put some place else – basically follow your instinct.
- What are the drawbacks of this kind of investment?
If you slip on a transaction or lose your password, you can never again access your bitcoins because of the nature of it. You can’t ask for a new password as you would if you lost your ATM pin, which is why one must be extremely careful when conducting these transactions.
- Are the rates cryptocurrencies going to increase in the future?
With the rate of inflation that the cryptocurrencies on the market are currently seeing, there is a high amount of certainty that they will increase even more in the future. The best time to buy bitcoins is now if you want to have a better financial future.