Bitcoin has been in the limelight for the last few years. Initially, it was an obscure technology proposed by an anonymous person under the pseudonym Satoshi Nakamoto. Bitcoin was the first cryptocurrency and it heralded an age of digital currency that has the potential to revolutionize the process of any digital transaction. Bitcoin is a currency designed to answer the needs of the online age we live in today.
Since its Bullrun in 2017 Bitcoin has attracted a lot of new traders in the field of crypto trading. New cryptocurrencies like Ethereum, Litecoin, Ripple, Nano have been introduced in the crypto market. Let us find out the prospects of crypto trading.
What is the process of trading?
The crypto market is ever-expanding with new cryptocurrencies being added to circulation every day. With the availability of trading platforms like Bitcoin trading has become convenient and easy.
Most of the trading platforms come with a friendly user interface that allows traders to explore the crypto market very easily. These applications come with a bunch of useful functions such as automated trading functions. This function allows users to implement trading strategies that are to be executed by the application on behalf of the trader.
The impact of Trading
A trader may have goals, the fulfilment of which may require them to be updated with live market trends. The cryptocurrency market is speculative just like the stock market, and the traders may have to make decisions according to their discretion relying on current market trends. The value of Bitcoin and other cryptocurrencies is never static. It is impossible for traders to observe the value graph throughout the day in order to find out the right spot to buy or sell.
The automatic trading command responds to this difficulty by allowing the trader to enter specific market trends and executive commands beforehand. On the fulfillment of the specified trends, the app performs the buy or sell command as mentioned. Functions such as this make trading simpler and easier.
Getting to know the Cryptocurrencies
There are numerous other currencies other than Bitcoin. All the new cryptocurrencies work on improving the foundation of existing blockchain platforms. It is observed, scalability of the Bitcoin blockchain is a major issue that can slow down transactions. New cryptocurrencies such as Ethereum or Ripple promise shorter transaction times due to high scalability.
Also, cryptos like Dogecoin have no maximum cap on circulation. This means there’s no limitation to the number of crypto tokens that can be introduced to circulation in its lifetime. This makes them highly inflationary. However, these inflationary coins also have a coin-burning function through which the miners can remove tokens from circulation. This process actively slows down the inflation of such coins so that their value is not depreciated.
Some of the Newer cryptocurrencies
Newer cryptocurrencies like NANO and IOTA use DAG, (directed acyclic graph) which uses an acyclic graph instead of blockchain to circumvent scalability issues. The acyclic graph is similar to the blockchain, but it uses vertices to store data instead of blocks. This makes scaling easier and it can be stated that cryptos like IOTA will scale better than Bitcoin when they are processing the same amount of data. It is acyclic because it is directed from vertices to other vertices without forming a closed loop. Like the blockchain, it also has to pass through a proof-of-work test in order to verify the fulfillment of the contract on which it’s working.
Automatic trading by trading bots might not be preferable to everyone. Most of the trading applications allow the user to toggle between automatic and manual modes. It is advisable for new traders that they enter the world of crypto after they have done basic research on how these currencies work. Cryptocurrencies are a natural store for value but their values are volatile. Traders must not expect guaranteed return against their investment.
There are numerous cryptocurrencies that offer various functions and come with new features. Traders must avail the trading service that can provide them with trading services suitable to their purpose.