What is cryptocurrency? How to trade?

Common cryptocurrencies include: 1. Bitcoin (BTC), generated through mining, with a total volume of 21 million; 2. Ethereum (ETH), providing a smart contract platform; 3. Litecoin (LTC), fast transaction confirmation speed and high total volume.

Common cryptocurrencies

• Bitcoin (Bitcoin, BTC) : It is the earliest cryptocurrency that appeared. It was proposed by Satoshi Nakamoto in 2008 and was officially born in 2009. It is generated through "mining", with a total amount of 21 million.
• Ethereum (ETH) : Not only is it a digital currency, it also provides a decentralized smart contract platform, allowing developers to build and deploy various decentralized applications (DApps) on it.
• Litecoin (LTC) : Technically similar to Bitcoin, but with faster transaction confirmation speeds and higher total currency volume.

Transaction method

• Spot trading : It is the most common trading method. Users directly buy and sell cryptocurrencies and make transactions at the current market price. For example, a user buys 1 bitcoin at a certain moment at a price of $50,000 and sells it when the price rises to $60,000, thereby earning the difference.
• Futures trading : It is a standardized contract transaction. Both parties to the transaction agree to buy and sell a certain amount of cryptocurrency at an agreed price at a certain time in the future. Futures trading has a leverage effect, which can amplify returns or losses. For example, if a user buys a Bitcoin futures contract with 10 times leverage, when the price of Bitcoin rises by 10%, the user's income will be 100% (not considering factors such as handling fees), but if the price falls by 10%, the user will also lose 100%.
• Contract trading : Similar to futures trading, but with a wider variety of contract types, including perpetual contracts, delivery contracts, etc. The perpetual contract has no expiration date, and the user can hold it for a long time; the delivery contract has a fixed expiration date, and it needs to be settled or delivered as agreed upon when it expires.
• OTC trading : OTC trading refers to transactions conducted in places outside the exchange. Users can directly conduct transactions with other users or merchants through the OTC platform, and the two parties to the transaction can negotiate transaction details such as price and quantity. This trading method is usually suitable for large-scale transactions, and the trading process is relatively flexible.

Trading platform

• Centralized trading platforms : such as Binance , OKX , Huobi, etc. These platforms have the advantages of friendly trading interface, good trading depth and strong liquidity, and are suitable for most ordinary investors. But they also have certain risks, such as the platform may be hacked and regulatory risks.
• Decentralized trading platforms : such as Uniswap, PancakeSwap, etc. The decentralized trading platform is based on smart contracts, and users can directly trade on the blockchain without the need to go through centralized intermediaries, which has higher security and privacy. However, the transaction experience of such platforms may not be as friendly as that of centralized platforms, and the transaction speed is relatively slow.

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