How To Make Money Trading Cryptocurrency
If you have extra money lying around, you’d be surprised what you can do with it. With just a few dollars worth of Bitcoin you can start trading cryptocurrencies right now. There are no middlemen to deal with, nor really any barriers to entry or red tape. All you need is some percentage of a single Bitcoin. There is no reason not to try it out. If you can accept risking a few dollars, it’s a good way to get into cryptocurrency.
But What Is Cryptocurrency?
Cryptocurrency is a digital form of currency that is being used increasingly all over the world. If compared with the current traditional fiat currencies system a cryptocurrency is far more efficient in terms of usage and transaction costs. The first cryptocurrency to begin trading was Bitcoin back in 2009. Sinces then we have seen numerous cryptocurrencies being created with new algorithms with longer or shorter block times and overall behavior changes to better suit a future economy. People often think of cryptocurrency only as virtual money or a transaction system. But if you look closer you’ll see that the monetary aspect is just the tip of the iceberg. That’s because cryptocurrencies and the blockchain is a groundbreaking internet technology for which money is merely one of the possible applications.
If you're not fimiliar with cryptocurrencies, check out this video:
So Let’s Get Started
First buy some Bitcoins. There are some exchanges that will let you purchase specific cryptocurrencies for USD, but it’s a better idea to buy Bitcoin first. With some Bitcoin, you can trade into and out of every other cryptocurrency on the market, on every crypto exchange. Remember: you don’t have to buy a whole Bitcoin, you can purchase Bitcoin in fractions known as Satoshis; for example, 500k Satoshis equals 0.005 Bitcoin. The safest, most popular place to purchase Bitcoin is coinbase.com, however there are many other websites where you can purchase Bitcoins, search and compare for the best rates.
Find An Exchange
Because Bitcoin is traded on a market where people are both looking to purchase or sell the currency, it’s important to take into account the amount of liquidity that an exchange has. The process of buying and selling Bitcoins costs money, that’s the incentive for exchanges to be run as businesses. Unlike buying a stock or bond, Bitcoin exchanges are in the practice of charging a percentage. Because of the percentage model, buying and selling Bitcoins over time can get very expensive. Ask yourself the following questions:
What country is the exchange located in? knowing your country and where the exchange is based out of is important, as laws and regulations can vary country to country.
How can bitcoins be purchased? Can you pay with wire transfer, cash, credit cards, PayPal, and so on. Use what works best for you at your convenience.
Fees? You will want to make sure that the exchange fees are within reason and aren’t exorbitant compared to the rest of the market.
Is the exchange reputable? If you want to make sure the exchange is on the up and up, check an Exchange Ranking List to see if they fall into the top rated bitcoin exchanges or not.
Knowledge about the coin you want to trade is very important! The most basic but important thing to remember: Buy low, Sell high. Research the coin you want to invest in and start working on your trading skills.
Any questions? Feel free to respond!