What You Need to Know About Cryptocurrencies – Introduction
In 2008, the world went through the biggest financial disasters of our time. It all started in the United States and then spread around the world. At the time, President Bush had started a deregulation program that made banks take risky decisions. Key among them was in the housing sector. Banks offered subprime mortgages to people. As the house prices went up, people continued to borrow money to invest in the real estate industry. Banks on the other hand created new products known as mortgage backed securities that they sold to investors. Like all bubbles, they burst. This happened in 2008 and with it, went billions of dollars. It also led to the erosion of trust by people on public institutions.
After the crisis, a person known as Satoshi Nakamoto came up with a plan. This plan was to create a digital alternative to the dollar. This new currency would not have a central government agency regulating it. He came up with a white paper about the project. At the same time, a young man known as Ross Ulbright was developing a new e-commerce website similar to Amazon. His new project would allow people to buy and sell products like drugs and guns. The biggest problem at the time was on how to make funds transfer.
Bitcoin helped Ross because its transactions were anonymous. This is contrary to the fiat currencies. This means that a transfer would not be tracked by the government. At its peak, his company – which was known as Silk Road – was transacting orders worth millions of dollars every day.
The innovation by Satoshi led to the creation of a new industry known as Blockchain. Today, this is an industry worth billions of dollars. At its peak, the cryptocurrencies were worth almost a trillion dollars. Today, companies like IBM have invested a lot in the industry. Millions of people from around the world have also made a fortune in the industry.
As an individual, you too can make money in the blockchain industry by trading the cryptocurrencies. In this, you can do three things. First, if you believe that the price of cryptocurrencies will move up, you can buy them. If you believe that the price will move down, you can place a sell trade on them. This is known as shorting. Third, you can do this for the short term. For example, people who bought cryptocurrencies in 2017 saw their returns gain by more than 1000%. Those people who placed short trades on them this year have seen returns of more than 1000%.
There are more than 2000 cryptocurrencies today. This means that most of them are outight frauds. This is because of the easeness of starting a cryptocurrency. All you need to do is modify an existing code, come up with a white paper, and then find an exchange to list you. Therefore, most currencies are not intended to succeed.
A good way is to focus on the big currencies and then short the rest. The biggest of these currencies are Bitcoin, Ethereum, Ripple, and Litecoin.
At Day Trade The World (DTTW), our platform enables you to find opportunities in the cryptocurrencies industry. You can buy those you believe will move up and short those you believe will move down.