In simple terms, cryptocurrency is a type of digital or virtual money.
Cryptocurrency is formed from two words – “crypto” (data encryption) and “currency” (medium of exchange). Cryptocurrency is a medium of exchange (like ordinary money) that exists in the digital world and uses encryption that ensures the security of transactions.
A cryptocurrency is an alternative form of payment in cash and credit cards.
Cryptocurrencies are systems that allow for the secure payments online which are denominated in terms of virtual “tokens,” which are represented by ledger entries internal to the system. “Crypto” refers to the various encryption algorithms and cryptographic techniques that safeguard these entries, such as elliptical curve encryption, public-private key pairs, and hashing functions.
A cryptocurrency (or cryptocurrency) is a digital asset designed to work as a medium of exchange wherein individual coin ownership records are stored in a ledger existing in a form of a computerized database using strong cryptography to secure transaction records, to control the creation of additional coins, and to verify the transfer of coin ownership. It typically does not exist in physical form (like paper money) and is typically not issued by a central authority.
Cryptocurrencies typically use decentralized control as opposed to centralized digital currency and central banking systems. When a cryptocurrency is minted or created prior to issuance or issued by a single issuer, it is generally considered centralized. When implemented with decentralized control, each cryptocurrency works through distributed ledger technology, typically a blockchain, that serves as a public financial transaction database.
In simple terms, cryptocurrency is a type of digital or virtual money. It serves as ordinary money, such as dollars, pounds, euros, yen, etc. But it has no physical counterparts — banknotes or coins that can be carried around, that is, the cryptocurrency exists only in electronic form. Learn more at Wikipedia.
Is Cryptocurrency different from the digital currency?
Unlike fiat currency (legal means of payment, which includes most paper money), the digital currency does not have physical equivalence stored in the form of cash or gold. It consists of arbitrary numbers stored in a user account.
Like regular cash, digital currencies are accepted as a means of payment and can be used to purchase goods and services. They can be transferred between accounts, and they can also be exchanged for cash.
Cryptocurrencies are a type of digital currency. They have arisen to address the problems of centralization, confidentiality, and security problems associated with conventional digital currencies.
The principle of decentralization is used in cryptocurrencies. This means that transactions made by cryptocurrency owners are not controlled and not regulated by financial authorities. Because cryptocurrencies use cryptography, they offer a robust security system that is hard to crack.
Below is a list of the main distinguishing features of cryptocurrencies from digital currencies and fiat money:
- Decentralization. As in the traditional banking system, most digital currencies are regulated by regulatory agencies, such as the Central Bank and other government agencies. This means that all currency exchange transactions are controlled, and their exchange rate is determined by these regulatory bodies.
On the other hand, cryptocurrencies are completely decentralized. This means that no state can control them. The rules are established by the cryptocurrency community.
- Anonymity. With digital currencies, it’s almost impossible to hide account holder information. To use electronic wallets like PayPal, you need to provide personal information such as your name and address.
On the other hand, you do not have to disclose any personal information when you open a wallet for trading cryptocurrency. Coins such as Dash are used to ensure complete anonymity.
- Transparency. The digital currency structure allows only government organizations to access information about transactions.
On the other hand, cryptocurrency transactions are publicly available. You cannot find out who is behind a specific account, but you can track transactions and monitor the amount of money in the system.
- Transactions. Because transactions are monitored by central authorities when using digital currency, they can easily mark transactions as suspicious, or even block an account.
On the other hand, once the cryptocurrency transaction is completed, it is automatically added to the blockchain and becomes irreversible forever. No one can block your wallet and transfer your funds to another account. Since the exchange of cryptocurrencies is carried out without intermediaries, the transactions have high speed and low commissions.
- Security. When you open the cryptograph, you get a private key, which is impossible to crack if you keep it in a safe place. But do not lose it, because without it you will not be able to enter your wallet, and you will not be able to restore it.
A cryptocurrency is a digital asset designed to work as a medium of exchange wherein individual coin ownership records are stored in a digital ledger or computerized database using strong cryptography to secure transaction record entries, to control the creation of additional digital coin records, and to verify the transfer of coin ownership. It typically does not exist in physical form (like paper money) and is typically not issued by a central authority. Some cryptocurrencies use decentralized control as opposed to centralized digital currency and central banking systems.
Cryptocurrencies face criticism for a number of reasons, including their use for illegal activities, exchange rate volatility, and vulnerabilities of the infrastructure underlying them. However, they also have been praised for their portability, divisibility, inflation resistance, and transparency.
Learn To Trade Our Strategy
Our Strategy focuses on supply and demand, market sentiment, momentum and Order Traps (Stop Hunts and Fakeouts)
Supply And Demand Trading
As supply and demand traders, we do not need to pay attention to the news, fundamentals or any earnings reports. Why is it that you see positive News and then the underlying market drops like a rock, or a negative news announcement and the market rallies? You are probably missing the fact that there big institutions are trying to make money!
Unless you are doing very short term trading and scalping, you should not worry about fundamentals or earnings announcements.
You can use these imbalances to plan your trades in lower timeframes. Trading is just waiting for the right trigger points and scenarios to present themselves. We need to patiently wait for the correct scenarios and setups to happen and wait for the price to react from our levels and we can take advantage from these moves!
If you want to learn how to trade using our trading strategy, join our Price Action Trading Course.
What are Fakeouts (Order Traps, Stop Hunts)?
First things first, before you can learn our strategy you have to understand how to use order traps to your advantage, you have to know what they are and how to identify them.
Order Trap ( Stop Hunts, Fakeouts ) are terms used in technical analysis to refer to a situation in which a trader enters into a position in anticipation of a future transaction signal or price movement, but the signal or movement never develops and the asset moves in the opposite direction.
Order Traps are when a trader puts on a position expecting it to move in a direction and it fails to do so.
Stop Hunts happen when many traders plan their exit by offsetting orders to make sure their potential losses are limited
Stop Hunts can cause considerable losses for a technical analyst. These traders will typically rely on well-tested patterns, multiple affirmations of an indicator, and specific allowances to protect from significant losses. Sometimes the setup can look perfect, but outside factors can cause a signal to not develop as planned.
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