What are cryptocurrencies?
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Cryptocurrency, or as some call it “digital currencies,” is one of the latest inventions in the world of money. It is a digital currency designed as a financial exchange medium that is managed via a computer network.
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Decentralization is considered one of the most important features of cryptocurrency, which means that its transactions do not require mediation and are not managed by central authorities such as banks and other financial institutions.
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Blockchain technology is used by these currencies as a database for storing public financial transactions. Bitcoin is considered the first decentralized cryptocurrency, but there are now many other types.
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In the same way as stocks and other financial instruments, cryptocurrencies rely on the principle of supply and demand, which means that their prices diverge and fluctuate according to the number of people wishing to trade a specific cryptocurrency at a given time.
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Hence, these currencies are used by investors to create investment opportunities by following the market movements and making predictions regarding the appropriate time to trade a particular currency in the form of CFDs before the price rises or falls.