A Basic Explanation of Crypto Trading

Created by Ryan D, Modified on Tue, 30 Jan 2024 at 05:07 PM by Ryan D

Cryptocurrency and crypto trading are still somewhat of a mystery to the vast majority of people. While younger millennials and Generation Z members better understand cryptocurrency and how to make money from these digital stores of value, the average layman is understandably confounded by blockchain talk. Let’s break down the basics of crypto and crypto trading in terms everyone can understand.

Crypto has Legitimate Value

Cryptocurrency such as Bitcoin can be used without tangible currency or a credit card. If you have a smartphone, you can spend and receive Bitcoin. This means you can buy products and services from businesses that accept Bitcoin without a traditional tangible wallet, purse, money clip, etc. Crypto also has inherent value as it is decentralized from the federal government and federal reserve, meaning it cannot be controlled or manipulated by a small cabal of power brokers.

Crypto Requires a Digital Wallet

If you want to use cryptocurrency to buy products and services or hold it as an investment, you will need a digital wallet. A digital wallet sets the stage for you to send and receive cryptocurrency. Zelcore’s decentralized, non-custodial wallet allows you to trade and hold over 300 cryptocurrencies securely. 

Using an Exchange to Buy and Sell Crypto

Crypto purchased on an exchange is an acquisition of actual digital coins. Simply create your exchange account, cover the crypto asset’s cost to establish the initial position and you will be empowered to safely hold the crypto tokens until the time comes to sell. Though crypto trading exchanges have an initial learning curve, you will master it after a couple of days of use.

Crypto trading markets have an inherent appeal to some investors as they are decentralized. Such decentralization indicates the markets are not backed by the federal government. The lack of centralization is viewed by some as a benefit yet it has also caused more traditional investors to question whether crypto is a secure value store. Instead of being dependent on a centralized authority, crypto markets operate on a digital network, called blockchain (more on that later).

The primary difference between conventional currencies and cryptocurrencies is the crypto variety is owned in digital form. Instead of putting crypto in a tangible wallet similar to dollar bills, it is placed in a digital wallet. A crypto transaction is finalized at the point of verification, at which point it's added to the blockchain.

Crypto Trading is Completely Secure

Crypto is created through blockchain technology. Blockchain is the manner in which transactions are recorded in “block” form and subsequently labeled with the date and time on a digital ledger. This is an inherently complicated process that generates a crypto transaction log that is unalterable and proves comparably safe, even when subjected to the wrath of the world’s best hackers. Crypto trading also mandates the use of multiple passwords through the two-factor authentication process for even more security. 

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