Cryptocurrency Explained Cryptocurrency at CAPEX

Whether it is making major financial market news, all over social media thanks to an Elon Musk tweet, or consistently talked about around the office, it’s pretty much impossible to go a day without cryptocurrency popping up somewhere.

So what is cryptocurrency? Cryptocurrency is a digital or virtual asset that acts as a form of decentralised currency. Originally aimed as a way to make cross-border transactions that were cheaper, faster, and more secure than traditional means, cryptocurrencies have grown into a financial revolution of sorts.

Secured through advanced cryptography on a distributed network of an immensely massive number of computers, cryptocurrency is realistically impossible to hack or counterfeit and is free from government control. These networks that leverage blockchain technology provide an irrefutable ledger of every transaction and they cannot be altered or removed in any way. Most commonly, cryptocurrencies are traded by buying and selling the asset.

Cryptocurrency at CAPEX

However, at CAPEX, we offer a more diverse and advantageous way to trade cryptocurrencies, with CFDs. Trading CFDs allows traders to take speculative positions based on the cryptocurrencies value and projected value without actually owning the underlying asset. Get ready to trade with the best online broker for cryptocurrencies.

To fully understand cryptocurrency, it’ll help to understand the fundamentals of the technology that powers this popular digital asset. You don’t need to know the real technical stuff but a basic understanding is important to understanding what a particular cryptocurrency is offering.

The blockchain has many purposes and features, but the important component to understand is the ledger. The blockchain is an irrefutable ledger that records every transaction perfectly. It cannot be altered or removed. Through the blockchain, any asset of value can be tracked – this is particularly popular now in the world of non-fungible tokens and for developing security technologies.

Blockchain technology has made cryptocurrencies more than just a store of value or a tradeable currency. Cryptocurrency platforms such as Ethereum allow businesses to track shipping orders, transactions, and much more on its blockchain network.

The easiest way to visualise the blockchain is to think of the network as a long series of interconnected blocks – like a train. Data is stored within each block and there really isn’t a limit to what can be recorded.

Of course, most commonly the block contains a record of transaction information such as when and what was traded. Since the blocks are securely linked together, no one block can ever be altered in any way, shape or form.

Each block strengthens the chain and every recording cannot be reversed. Blockchain technology is essentially tamper-proof and ensures a completely trustworthy network for its members. Thankfully, you won’t need to consider all this when trading in CFDs at CAPEX.

Cryptography explained

Cryptography is nothing new really, but its implementation in blockchain technology is revolutionary. It is the technique of sending a secure message in which the sender encrypts a message using a key or algorithm and the recipient decrypts the message using another key or algorithm. This puts the crypto in cryptocurrency and without it, there would be no crypto CFDs to trade at CAPEX.

Crypto storage in action

Cryptocurrency is stored in a crypto wallet and the owner of that wallet is given a public address and private key in order to send and receive cryptocurrency on a blockchain network. Think of the public address as the location for your cryptocurrency – i.e., your wallet – but without the unique private key, the public address is inaccessible. The best way to imagine it is that the public address is a storage locker and the private key as the only working key. If a private key is lost, or stolen a crypto trader would lose access to anything stored in that wallet.

You’ve probably heard horror stories of people losing their private keys and subsequently all their assets too. If you trade crypto through  CFDs at CAPEX, that won’t be a problem, as you don’t own the underlying asset, but get all the value.

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There are several ways to trade cryptocurrencies. Originally, the only way to buy cryptocurrency was via a peer-to-peer trade of funds for bitcoin – a method you can still use today. The most common method is to buy and own cryptocurrency via an online cryptocurrency exchange. Through an online exchange, an investor can buy and sell cryptocurrencies using traditional FIAT currencies or other cryptocurrencies.

However, at CAPEX, we offer another unique way to trade cryptocurrencies such as bitcoin, Ethereum, and Litecoin, that offers the unique advantage of leverage and the ability to short an asset a trader may feel is likely to lose its value. As we briefly mentioned, we offer cryptocurrency investments in the form of CFDs or Contract for Difference. A CFD is a way to trade the value of cryptocurrencies without actually owning any. Think of it as placing a wager on whether cryptocurrencies value will go down or up.

There are plenty of reasons to trade cryptocurrencies, especially at Capex.com. Choosing to trade cryptocurrencies will depend entirely on the motivations, financial goals, and resources of each individual investor. However, we at CAPEX have selected some of the best reasons to trade cryptocurrency.

• Intrinsic value: Cryptocurrencies have plenty to offer. Not just for cheap and fast cross-border transactions, cryptocurrencies have plenty of business applications through decentralized applications (dApps). There are legitimate business benefits to using cryptocurrencies and plenty of reasons to hold and use cryptocurrencies. Check out the featured articles at CAPEX for more examples of the intrinsic value of cryptocurrencies.
• Hedge against inflation: Many cryptocurrency bears and major institutional managers argue that cryptocurrencies are an excellent hedge against inflation, much akin to that of gold in the 1970s. This is owing to its decentralized nature and because it is unable to be influenced by governments. Trading CFDs at CAPEX is a great way to achieve this.
• CFDs require no ownership: You can trade cryptocurrencies without the hassle of actually owning the asset. That means no cryptocurrency wallets to deal with, no passwords, or keys to worry about losing. At CAPEX, you can trade CFDs of multiple cryptocurrencies.
• Advancing technology: It wasn’t that long ago that nobody really understood cryptocurrencies and today crypto technology finds more ways to enhance our lives. This is definitely an asset worth investing in at CAPEX because it is a technology that moves incredibly fast.
• High liquidity: Cryptocurrency benefits from very high liquidity and with that comes market stability, accurate technical analysis and incredibly fast transaction times. A high liquidity market ensures fair prices for all traders.
• 24/7 marketplace: Unlike any other marketplace like stocks or forex, cryptocurrency can be traded 24/7. That’s right! The crypto markets never sleep. You can trade anytime you choose at CAPEX and you don’t have to wait for the opening bell each day.
• High volatility: Some might argue this is a negative but high volatility in CFD trading can provide huge potential if you can predict the trend.

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