Cryptocurrency Trading and Investment

Hello!

Let's talk about cryptocurrency and blockchain technology. We understand that it can be challenging for beginners, so we've created this guide to gradually introduce you to the key concepts needed for a successful start in the world of blockchain.

So, what is cryptocurrency?

Essentially, it's a digital form of cash. With it, you can pay for dinner with friends, buy that pair of socks you've been eyeing for a while, or book flights and hotels for a vacation. And unlike traditional currency, cryptocurrency can be sent to your friends and family anywhere in the world, just like PayPal or a bank transfer, but much more exciting!

What's the catch?

Traditional online payment services belong to certain organizations and operate through intermediaries. But with cryptocurrency, you can send funds directly to other users using free software. You become your own bank, without intermediaries and without extra hassle!

And to start using cryptocurrency, you don't even need to register on a website with an email address and password. Just download an app to your smartphone, and you'll be able to send and receive funds in minutes.

But where does the name "cryptocurrency" come from?

This phrase consists of two parts: cryptography and currency. Cryptography ensures the security of our funds through encryption, but don't worry, all the complexities are handled by the applications you use. You don't need to delve into the details of how it works behind the scenes.

So, this amazing virtual currency belongs to no one and is protected by encryption. But why do you need it if you already have apps for quick payments?

Cryptocurrency offers you:

Freedom from limitations: You can use cryptocurrency without hindrance. Unlike centralized payment services, which can freeze accounts or impede transactions.

Resistance to hacking: thanks to the network structure, cryptocurrency remains resilient to hacker attacks and other malicious activities.

Cheap and fast payment method: You can send funds to someone on the other side of the world in seconds. The transaction fee is significantly lower than for international money transfers.

And what about Bitcoin, which you've probably heard about from friends or family members? It's the first and most popular cryptocurrency.

WHO CREATED BITCOIN?

Interestingly, nobody knows for sure who created Bitcoin. Only the pseudonym of the currency's creator is known - Satoshi Nakamoto. Behind this pseudonym could be a person or a group of programmers. There are even absurd theories that it's a time-traveling alien or a secret government organization.

In 2008, Satoshi published a 9-page document describing the technology of the Bitcoin system. A few months later, in 2009, the software was released.

Bitcoin served as the basis for the creation of other cryptocurrencies. Some of them were created based on the same software, while others used a different approach. But what's the difference between all cryptocurrencies?

It would take a week to list all existing cryptocurrencies. They differ in speed, confidentiality, and programming.

In the world of cryptocurrencies, it's often said: "Do Your Own Research" (DYOR). This is said with the best intentions. You should not rely on information found in just one source. Be cautious when investing in any project. All cryptocurrencies are different.

We have prepared a list of articles dedicated to various coins and tokens to help those who are eager to learn more:

What is Bitcoin? ("the king of cryptocurrencies") - In this article, we will explore the key aspects of Bitcoin, its history, and its significance in the world of cryptocurrencies.

What is Ethereum? (distributed network) - We will delve into the important aspects of Ethereum, its functionality, and its role in the development of blockchain technology.

Beginner's Guide to Blockchain Technology 1/3 - In the next article, we will discuss blockchain technology, its fundamental principles, and its applications in various fields.

WHAT IS BLOCKCHAIN?

Don't worry about the abundance of technical terms used to describe "blockchain." Blockchain is a kind of database, which, technically speaking, is simply a set of cells in a spreadsheet. However, this database has several features.

Firstly, the data in the blockchain cannot be altered. You can only add new information - it's impossible to simply delete or change data in a cell.

Secondly, each record (block) in the blockchain is cryptographically linked to the previous record, creating a chain of blocks. Thanks to this link, any changes to one block become apparent, as the hash of the previous block changes, and the next block contains this hash.

Blockchain cannot be altered without changing all subsequent blocks, making it resistant to manipulation and data tampering.

Furthermore, blockchain is open to everyone, and anyone can download and run a full copy on their computer, making it decentralized and transparent.

In the upcoming articles, we will take a closer look at consensus algorithms in blockchain, proof of work (PoW), the issue of double spending, game theory and cryptocurrencies, as well as explain the Byzantine Generals' Problem.

If anyone can create a block, what prevents them from cheating? The idea of creating a block with the command "Dmitry pays me a million coins" seems extremely tempting. Just like buying a Lamborghini and a fur coat from Ekaterina, using funds you don't actually own. But such a scenario is impossible.

Thanks to cryptography, game theory, and the consensus algorithm, the system does not allow spending funds you don't actually have.

Would you like to delve deeper into the topic of blockchain? We have several useful articles for you:

Consensus Algorithm in Blockchain:

-Proof of Work (PoW):

-Double Spending:

-Game Theory and Cryptocurrencies:

-Explaining the Byzantine Generals' Problem:

If you're already familiar with these topics and are interested in trading or investing, we're ready to assist you.

TRADING

You're probably aware that blockchain and cryptocurrencies are already being used in various fields, and one of the most common uses is speculation. Trading often involves making profits in the short term. Traders constantly open and close positions. But how do they determine when to enter and exit trades?

One of the most common methods of cryptocurrency market analysis is technical analysis (TA). Technical analysts study price history, charts, and other market data to identify trades with good profit potential.

Ready to start learning? We have several articles for you:

What is Technical Analysis?

Guide to Candlestick Charts

Once you've mastered this material, you can move on to the following topics:

-Beginner's Guide to Blockchain Technology 2/3

-Risk Management Guide

-Cryptocurrency Trading Strategies

-5 Key Indicators Used in Technical Analysis

-12 Popular Candlestick Patterns Used in Technical Analysis

-7 Common Mistakes in Technical Analysis

INVESTING

Investors focus on long-term investments, guided by fundamental investment principles. For example, they analyze the profitability of companies. Although cryptocurrencies are a new and unique type of asset, similar principles can be applied to them.

Many Bitcoin investors adhere to the philosophy of "HODL" (Hold On for Dear Life). They are so confident in Bitcoin's success that they plan to hold it for a long time.

Want to learn more about investing in cryptocurrencies? We have several articles for you:

-Crypto Investing for Beginners

-What is Fundamental Analysis?

-What is Asset Allocation and Diversification?

-What is Dollar-Cost Averaging?

Don't just take our word for it; study our articles and draw your own conclusions.

PASSIVE INCOME

We've already covered trading and investing, but these methods typically require significant time, which not everyone has. For those who are busy but strive to increase their capital, there are other options. As the great investor Warren Buffett noted, "If you don't find a way to make money while you sleep, you will work until you die."

And the good news is that the world of cryptocurrency offers many opportunities for passive income. You can even earn by simply holding cryptocurrency! Why doesn't everyone do this? Perhaps they are simply unaware of such methods. But you are now informed!

One way to earn passive income is by lending. Other people will pay you interest for the opportunity to use your funds.

Additionally, there is mining. Typically, this involves receiving Bitcoin rewards for using powerful and expensive equipment.

However, there are other ways to support the operation of the cryptocurrency network, such as staking.

What is staking? It is the process of locking cryptocurrency to earn rewards. By investing in a coin that supports staking, you can increase your savings over time.

You can learn more about staking in the following articles:

-What is Staking?

-Proof of Stake (PoS)

Thus, we have discussed the main ways to earn passive income in the world of cryptocurrency. We hope this guide has helped you better understand the principles of cryptocurrencies and their potential for your financial growth. We also have plenty of other articles - from beginner's guides to more in-depth reviews of complex topics!