More Brokerages are Opening Doors to Crypto Trading
You have probably heard of digital money or cryptocurrency. There was a time that it was a concept that hardly anyone pays attention to. But now, it’s a totally different story. It is making headlines and has become all the rage now. Bitcoin and cryptocurrencies have slowly taken the online trading world by storm.
The Rise of Crypto Brokers
Today, Bitcoin is now accepted as a form of payment by merchants all over the world, particularly online sellers, while altcoins like Ethereum, Ripple, and Cardano are also making waves. It is expected to compete with the financial instruments in the online trading world, which several online brokerages are tapping into. Platforms such as eToro crypto trading services who have been pioneers of the industry have added these digital coins to their asset selections, with most brokers expected to follow suit.
Are Crypto’s a Thread to Monetary Systems?
It has slowly gained popularity among traders and has managed to create a ruckus that many governments have taken a look at the threat it poses to their stable monetary systems. The attention it gained has brought financial experts back to their drawing boards to see if it can be used for financial investments. Bur, first, a word of caution: crypto does not have legal tender in any country.
A legal tender acts as a medium of payment that can settle financial obligations. The most accepted forms that we know are the currency notes and coins that we use for our everyday transactions. However, Bitcoins have become the new digital currency that’s being accepted in a number of businesses.
What is Bitcoin?
The use of Bitcoins was a response to the world’s financial crisis. It is fully autonomic electronic money that does not use traditional banking methods. The method by which it can be transferred is through peer-to-peer transmission, from one party to another via an open-source cryptographic protocol. There is no central authority that regulates it, unlike the currencies that we have grown accustomed to.
Developed by Satoshi Nakamoto, Bitcoins (with the symbol BTC) are divided into 8 decimal places, comprised of 100 million smaller units called Satoshis.
How Does it Work?
Acting as electronic money, Bitcoins are downloaded through an open database, with an assigned bitcoin address acting as a virtual bank account.
Bitcoins are exchanged over secured servers, called the Bitcoin miners, which communicate over an online system. Bitcoins are generated on a permanent schedule, with each trade recorded and archived using a peer-to-peer file-sharing network globally.
There are numerous databases keeping track of each transaction to check the authenticity of each Bitcoin used and to prevent attempts to use Bitcoins more than once. To ensure online security, it is protected by a private key encryption system.
Trading Crypto with Online Brokerages
The number of brokers taking an interest in Bitcoin and other cryptocurrencies is constantly on the rise. Even though it is an experimental digital currency, it is an attractive investment opportunity to diversify your trades.
It can now be traded over a number of exchanges, making it an ideal currency to use for various transactions, as traders do not have to deal with high transaction fees or bank charges, as well as fluctuating exchange rates.
The Government’s Role in Crypto Trading
As the use of crypto coins is enjoying growth seen in exponential proportions, there is no doubt that governments will step in to stifle the boom. However, since these digital assets are already an accepted currency online and slowing its progress would signal a loss of revenue for the governments who can potentially mandate tax dues for transactions using the digital currency.
As of now, regulators are more focused on firms that operate outside commonly accepted domains. Nevertheless, it will be any time now that regulatory bodies may exert their authority over these financial institutions. Will this be good for the crypto industry? Only the future can tell.
