welcome back to our blog. Today, we’ll look a little bit more into cryptocurrency trivia. As you all know, there are many cryptocurrencies on the market nowadays. Crypto world now counts hundreds of different blockchains.
New tokens are developed almost daily and it is already years past the time that there was just Bitcoin. You can now buy and trade many different coins with various specifics. Today, we prepared this short text for those of you who wonder what are these differences and how to get advantage of them.
Bitcoin is still the largest one, oldest, most advanced to say, with the largest customer and developer base. No wonder, when you take in consideration, that it is a decade old blockchain now. These properties render Bitcoin to be one of the best for general investment and trading. As all the other large infrastructures like Ethereum for example, Bitcoin do not tend to change significantly.
There is very low probability that these currencies will be influenced by their development since a consensus of many people is necessary to implement even a very little changes in their programming structure. Also, with market cap so high, it is very difficult to influence its value by few large orders. Even though Bitcoin is still volatile, grown and fell significantly over the years, it is much less prone to fast changes than all the other smaller altcoins. Rendering it very well suitable for larger scale trading and for storing funds.
On the contrary, smaller and newer blockchains are much wilder. As opposed to Bitcoin, they are often much faster and cheaper in terms of confirmation speed and fee costs. Often in development, their environment can swiftly change due to new features implemented, so the price can also shift significantly.
But, setting like that is also prone to bugs and bad development decisions, therefore the price shift does not have to be a favorable one. Their markets have smaller liquidity, rendering them much more volatile in case of heavy trading. With trading volumes that won’t change Bitcoin exchange rate a bit, small liquidity markets can shift significantly.
There are many different coins and every one is technically different, suitable for different use. If you are starting with your trading, please take those two paragraphs above into consideration. It is always good to choose if you want to trade on a wilder market, or on more stable one. Each one of those has their risks and benefits and with a good trading strategy, both can be utilized for profitable trading.
So, good luck with your trades!
Your Coinmate.io team
Follow us on: