The introduction of financial services brought banking products targeting every audience. These products aimed at achieving maximum market share. Customer feedbacks play a pivotal role to customize products. Customer reviews pave a road for the banks to identify the types of customers and introduce products accordingly.
Starting with the physical form of currency, banks moved to plastic money. It led to introduce credit and debit cards, simplifying the trouble of carrying cash. These facilities offer rewards for the cardholders, encouraging them to spend more. With ticking times, bitcoin transformed the picture of financial services. This article will introduce the types of cryptocurrency and its trading.
Cryptocurrency
The concept of cryptocurrency began with bitcoin. It was introduced in 2009 to usher in a new era of blockchain technology. This evidence marks the commencement of the blockchain era. The transactions with cryptocurrency trades cannot be redone and erased.
Now, let’s know about four cryptocurrency types:
As of December 2021, the cryptocurrency market was over $2.2 trillion. In 2011, the cryptocurrency market was only $11 million. This rise from 2011 to 2021, cryptocurrency is divided into four categories according to their utilities:
Currency
The first currency of bitcoin was for this utility. Its sole aim was to make cross-border payments cheaper and faster. With ticking times, bitcoin has earned value. In 2009, its value was roughly around $1. The advantage of Cryptos is its free usage on public decentralized blockchain networks.
Asset
Stablecoins are categorized in this category, as the value of cryptocurrency is derived externally. For example, USDT derives its value from the US dollar. Assets can be exchanged with cryptocurrencies or fiat currency during exiting.
Object
A misconception of investors thinking that it is the future of cryptocurrency. These cryptocurrencies are aimed at a purpose to give the world a solution through various projects. Siacoin (SIA) in this context, solved the issue of cloud storage.
Meme or joke coin
These cryptocurrencies were created strictly for fun, but they are valued in billions now. A perfect example can be Dogelon Mars (ELON) was created as a joke. It aims to initiate InterPlanetary Money transactions whenever viable. However, there is a risk of speculation as its value can fall quickly.
Trading
The essence of cryptocurrency trading is speculating the value of currencies and exchanging them through specified channels.
The trading of the coins on CFD is based on derivates. It takes place purely on speculation. However, the decision rests on the trader to buy or sell them. Trades are done with a small deposit. In exchange, there are specified channels with account creation. The account is a wallet to keep the currency ready to sell at the right moment. Exchanges are a learning experience as it helps to get the grip of the technology and interpret data.
In a magnified view, CFDs assist in speculation with the rise and fall of cryptocurrencies. These prices are quoted in US dollars with no ownership of cryptocurrency itself. CFDs are leveraged products and they help to speculate losses and profits. The preferred trade of cryptocurrency is through lots represented by tokens. Cryptocurrencies are volatile and hence lots are preferred to be small.
The final word
Being clear with the types and trading of cryptocurrencies, they can be viewed as the future of banking. However, with the associated risks, there may not be the required number of enthusiasts to invest in it. Speaking of this, it is advisable to invest after examining the pros and cons of this trade.
