Crypto Currencies

Crypto currencies are an exchange medium used as an alternative to currencies issued by governments. They use encryption to secure transactions within their system and to create new units, and will usually operate without a central bank or government in an independent decentralized system.

The rise of crypto currencies in recent years is partially due to the higher volume of Internet trade and the need for a more universal medium of exchange, and also by the sense of security provided by their highly developed systems.

Within the cryptocurrency network, multiple users will apply a pre-defined time-stamping scheme to confirm transactions and add them to a common ledger, and get rewarded for their cumulative effort with the distribution of new units. The most famous crypto currency is the Bitcoin, but many others exist on the market, creating an interesting landscape for traders to navigate.

In the investing world, crypto currencies can be approached in two ways. Traders can either buy units and trade them depending on the way their prices change, or invest in CFDs, thus gaining exposure to a larger trading volume at a fraction of the price. The latter option has certain advantages, including faster processing and that there is no need to create a specific wallet for crypto currency. It should be kept in mind, however, that CFDs also involve a higher risk of losses in the event of unfavourable market conditions.

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