Börse Express – Trading cryptocurrency: These are the benefits!

Cryptocurrency: the future of money?

Cryptocurrency is decentralized, meaning it is not controlled by governments or banks. Therefore, cryptocurrency is more stable than conventional currencies and can counteract inflationary trends. Also, cryptocurrency offers more anonymity and privacy than traditional money. Anyone who has had experience with the Dutch crypto exchange Bitvavo knows how easy it is to buy and sell cryptocurrency. Bitvavo is the first Dutch exchange to allow the purchase of cryptocurrencies with iDEAL (the Dutch online bank transfer service). Thanks to such simplicity, the number of people investing in cryptocurrency is sure to increase in the coming years.

Bitcoin, Ethereum & Co. – The most famous cryptocurrencies

Bitcoin, Ethereum and Co. is on everyone’s lips – hardly a day goes by without some headline about digital currencies.Bitcoin, the first and best-known cryptocurrency, was developed in 2009 by Satoshi Nakamoto. There are now countless different cryptocurrencies on the market – the most well-known representatives are Bitcoin, Ethereum, Litecoin, Ripple and Bitcoin Cash.

Cryptocurrencies are based on the so-called blockchain principle. Blockchain is a digital database that records all transactions. Since the blockchain is decentralized, it cannot be tampered with – a major advantage compared to traditional currency systems.

The cryptocurrency Bitcoin is by far the best-known representative of its kind. It is considered the gold of the digital world and has experienced enormous growth in value since its introduction in 2009. Bitcoins can easily be bought online – for example via crypto exchanges such as Bitvavo, Coinbase or Kraken. More and more online retailers are also accepting bitcoins as a means of payment – ​​including big names like Microsoft, Expedia and Overstock.com.

Ethereum is another well-known cryptocurrency. Ethereum is based on blockchain technology and allows users to enter into so-called smart contracts. Smart contracts are legally binding contracts whose execution is fully automatic – without the involvement of a third party. Ethereum is therefore ideal for trading in digital goods – for example, for buying or selling music or works of art.

Litecoin is also built on blockchain technology and is similar to Bitcoin in many ways. However, Litecoin has some important advantages: the transaction speed is significantly higher, and the cost per transaction is lower with Litecoin than with Bitcoin. Litecoin is also often referred to as the silver of the digital world – an analogy to Bitcoin’s gold status.

Ripple is an open source protocol for global financial transactions and is also based on blockchain technology. However, unlike other cryptocurrencies, Ripple is not a currency in the true sense, but rather a payment network for banks and financial institutions.

Risks of Trading Cryptocurrencies

Cryptocurrencies are a highly speculative financial instrument and trading them involves a high degree of risk. Especially if you haven’t informed yourself well enough or are inexperienced. Here are some risks that can arise from trading cryptocurrencies:

  • Cryptocurrencies are very volatile. Rates can fluctuate wildly within a very short period of time and traders can suffer huge losses as a result.
  • Cryptocurrencies are not regulated and there is no protection against manipulation or fraud.
  • The infrastructure for trading cryptocurrencies is still very immature and technical problems can occur.
  • Most cryptocurrencies have a very small market capitalization and are therefore highly susceptible to manipulation.

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