August 29, 2017

Cryptocurrencies are the next big thing

Binary options are always looking for the next big thing to trade and cryptocurrencies are flavour of the month at present. All currencies will be looked after and their interest guarded by a central bank but with no central bank to control the rates offered on cryptocurrencies they can be traded without interference.

Back in the nineties there were attempts to create digital currencies which all failed, just look at Digicash! That was until Bitcoin came along which almost worked by accident. Bitcoin emerged out of an attempt to create a digital cash entity without any central point of control and it was created to have a peer to peer network.

The main problem with a currency is that you have a payment network with balances, spending, accounts etc. and you have to avoid double spending. So if I spend the balance in my account there has to be a central system that stops me spending it again. The thing with a cryptocurrency is there is not central organisation looking after the system to avoid double spending. So for it to work the whole network needs to be connected so any transaction is known about by every other bit of the network.

So a system was set up whereby when a transaction was completed it was left pending until the network was advised and then when the whole network knew about it it was confirmed. Then there was no going back and that transaction was confirmed forever.

From the original Bitcoin we now have a wide range of cryptocurrencies; Bitcoin is still the most widely known but we now have others such as Ethereum, Litecoin, Monero, Ripple, Dash and Augur.

So why trade Cryptocurrencies?

There are a few advantages to trading cryptocurrencies:

  • They can be traded 24/7, this free market never sleeps.
  • They operate in a free market, so there is little or no regulation. This also means that there is no circuit breaker to bail you out if things go downhill fast and there maybe unscrupulous sharks in the water however this does mean that the profit possibilities are greater as well.
  • They do not suffer from government interference unlike other currencies. They are affected by global economic news and not as much by localised factors or government interference.
  • In the cryptocurrency field there are many less huge investors and corporate investors due to the lack of regulation. Large investors need to show that they are investing in areas where there is regulation and they are protected to some degree. As they don’t have that protection with cryptocurrencies they don’t enter the market leaving smaller investors with more opportunities.
  • Pay out times can be a lot quicker using block chain technology and the lack of regulation means no delayed settlement.

To trade in cryptocurrencies there are several companies you could use like IQoption, Option888 or ZoomTrader for a larger list of providers please see our home page here.

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