You probably already know what cryptocurrencies are unless you've been living under a rock for the past decade. However, you might not have bought, traded, or interacted with the digital assets for lack of interest or knowledge in the industry, which is fine.
But trading and investing in crypto can help you earn supplementary income and give you something productive to do with your extra time.
But you might be interested and don't know where to start with crypto trading or what platform you should use. This piece will look at how to start trading on eToro, one of the best cryptocurrency apps in the UK, and everything you need to know about the crypto industry. So keep reading to learn more.
What are Cryptocurrencies?
Cryptocurrencies are decentralised blockchain networks that use distributed ledgers to record and keep track of transactions. Furthermore, they are a kind of digital asset that acts as a virtual currency and exists away from traditional financial systems. They enable secure peer-to-peer online transactions without intermediaries or third parties, which makes them convenient and inexpensive.
Cryptocurrencies also provide an alternate way to transact anonymously without needing a bank account or the rigorous checks of having one. Instead, you only need an internet connection and a simple device such as your mobile phone to complete a transaction.
In addition, the blockchain technology crypto is based on creates new transactional nodes and crypto in a process known as mining.
Types of Crypto
Like fiat money, fiat-crypto works under the same principles. They in and of themselves don't hold any intrinsic value but are publicly agreed-upon as means of trade. Some of the best fiat-crypto examples are the early iterations of cryptocurrencies such as Bitcoin, Litecoin, and Ethereum.
However, they do not aim to create anything radical from the convention but a more convenient and decentralised mode of payment.
As you can already tell, fiat cryptocurrencies don't have anything backing their value; as such, they can be highly volatile and very risky to invest in. However, some cryptocurrencies, such as stablecoins, have tried to solve this by pegging their value on some form of asset.
For instance, Tether has its value tied to the UD dollar, which offers you the benefits of cryptocurrencies without the volatility that comes with them.
Utility tokens are not necessarily currencies but tokens with a predetermined use and demand that makes them valuable to you. For instance, to pay for the computational power Ethereriums runs on, it uses Ether, a utility token on the platform.
What is eToro?
If you're just getting into crypto trading or have experience, you need a trading platform that allows you to access the crypto markets and supports your activities.
eToro is one of the best multi-asset brokerage platforms that facilitate manual and social investing for options such as stocks, currencies, and crypto. It has a cash account and debit card that makes deposits and withdrawals convenient, as well as provides other features that make trading on the platform more accessible.
One of the more notable features is the copy trade which lets you copy other investors' strategies and implement them on your own trades. If you're new to crypto trading or have limited experience, this feature will allow you to study some of the more successful traders on the platform, helping you get up to speed.
And even though eToro has a limited number of cryptocurrencies compared to other platforms, it has an excellent user interface that's easy to learn and get used to. Furthermore, it has a demo account you can use to make mock trades and familiarise yourself with trading. This feature helps you get comfortable with the app before risking any of your hard-earned cash.
To Sum it All Up
The trading industry can be challenging when you're just learning your way around and even more so when it's the highly volatile cryptocurrency market. However, it's not impossible to get into and even make a profit when times are as hard as they are now.
Furthermore, the platform you pick to conduct your trading will significantly influence your success and experience in the industry. And we are glad to let you know that when it comes to crypto trading, eToro is one of the best.