Cryptocurrency is the biggest wealth creation way for any person. This is the way to make lot’s of money and enjoy their life. But for beginners, they don’t know what is Crypto trading or Crypto currency & how it works actually. So, in this article we provide you best way to understand what is Crypto trading is actually and how it works.
What is Crypto currency ?
Basically Cryptocurrency is not any physical currency or paper money, this is totally virtual currency. Crypto currencies are digital token/currency where people invest or trade their real money to purchase crypto currency. It means that people engage in cryptocurrency trading by exchanging real money. Cryptocurrencies enable individuals to transact with each other directly, without the involvement of intermediaries, making transactions more secure.
A few years ago, people were skeptical about cryptocurrencies like Bitcoin, which is now one of the most popular cryptocurrencies globally, with its price currently hovering around 32 lakh. Particularly focusing on Bitcoin, this digital coin has a finite supply, and it remains beyond the control of governments or any central authority. Cryptocurrencies are not issued by any central government. They facilitate direct payments between individuals through online systems, as they exist solely in digital form, without any physical currency or coins. Therefore, when you make a payment using cryptocurrency, neither the government nor any bank can control your transaction, ensuring that it remains immune to third-party interference. Crypto currency is the easiest way of payment or transactions without any issue you can pay through Crypto wallet. You can do international transaction very easily.
The value of cryptocurrencies can fluctuate over time, similar to how the price of the Dollar can rise or fall. Cryptocurrencies do not possess a fixed value like traditional currencies, money, or assets. Instead, their value is determined by the level of trust people have in them and their market availability for transactions.
Read this – How to start Forex trading as a beginner – 2024
Is Crypto currency controlled by Government ?
If you have this question, let me clarify it for you.
Cryptocurrency is not controlled by any government. All cryptocurrencies often operate with decentralized control, meaning they are not controlled by a government like traditional accounts. This is in stark contrast to a central bank digital currency (CBDC). Cryptocurrency is not controlled by any central government. Trading in cryptocurrency is done entirely at the investor’s risk.
The crypto market is substantial, but not many large investors are involved yet, unlike the stock market and the Forex market, where ordinary people typically trade.
In the stock market and Forex market, operators can’t control the entire market; they can’t manipulate the whole market. However, in the crypto market, operators can influence the entire market. But who are these operators? They are individuals with significant investments. They can increase the price by 10 to 50 in just a minute, or decrease it from 50 to 10 in just a second. They control the market. However, the market continues to grow because of belief. People believe in cryptocurrencies and invest their money in this market.
Crypto Currency legal in these countries:
- United state
- United Kingdom
- The European Union
- Canada
- South Korea
In these country Crypto currencies are legal to use, their government allow people to use Bitcoin and other crypto currencies. Even many big companies are also use Bitcoin or Crypto payment. People from these country invest more money in Crypto currency.
Crypto Currency illegal in these countries:
- China
- Bangladesh
- Egypt
- Morocco
- Nepal
- Iraq
- Tunisia
In these country government completely banned on Crypto currencies. They don’t allow people to invest in Crypto currency and they don’t use Crypto currency payment.
Is Crypto Currency legal in India:
SO according to the report, before 2020 Crypto was not allowed in India but after March 2020 government allow people to use Crypto currency in India. Indian people can trade in Cryptocurrency they can invest in Crypto currency and people can make payment using Crypto wallet.
According to the report if you trade in Bitcoin in India then government take 30% GST (plus surcharge & cess).
For example: If you trade in Crypto (Bitcoin) in India with 1 Lakh in the First month of the year and you sold it in 2 Lakh with 1 lakh profit at the end of the year then flat 30% (plus surcharge & cess) crypto tax is applicable in income gain of 1 lakh rupees. It means as an investor you will be liable to pay 30k (plus surcharge & cess).
Note: this is just for that financial year.
Let me clear you one thing more, this is applied when you sell your Crypto currency. But if you hold your investment then there is no any charge or tax for that by government.
(Read this – Crypto currency is legal in India but with 30% tax.)
Centralized & Decentralized:
Let me explain you why we’re discussing the concepts of centralized and decentralized systems.
Centralized: In terms of currency, a centralized system refers to money controlled by the government. Within this framework, the government possesses the authority to increase the money supply, discontinue paper currency, or even block individual accounts as deemed necessary. Essentially, decision-making power lies with the central government. However, when we consider cryptocurrencies, the story shifts. Unlike traditional centralized currencies, cryptocurrencies operate independently of any central authority. They are not subject to governmental control or manipulation. Instead, they function on decentralized networks, with transactions verified and recorded through blockchain technology. Consequently, the governance of cryptocurrencies does not reside within a central entity, but rather among the collective body of investors and users who participate in the network.
Decentralized: As previously mentioned, if a currency is controlled by the central government, it’s considered centralized. Conversely, if it operates beyond governmental control, it’s termed decentralized. In the case of cryptocurrencies, they fall into the latter category. Cryptocurrencies are not under the control of any central government; rather, they are managed by the investors themselves. Therefore, cryptocurrencies are decentralized, with their governance vested in the hands of those who invest and participate in the network.
Why people trade on Crypto Currency:
People trade cryptocurrencies to generate wealth. They either invest in cryptocurrency through brokers or trade cryptocurrencies using the same broker. There are numerous brokers available for cryptocurrency trading, and people also use it for online payments.
Investing or trading in cryptocurrency aims to generate profit. When we invest in cryptocurrency, our investment value increases along with the cryptocurrency price, resulting in profit.
Cryptocurrency isn’t solely used for exchanging money; it’s also utilized for exchanging goods and services.
(Conclusion- If you want to trade on Crypto currency then learn it first and then invest or trade on Crypto currency.)