Cryptocurrency Trading

Cryptocurrency Trading

Cryptocurrency CFD Trading Sites
Online BrokerMinimum DepositBitcoinEthereumLitecoinRippleDashNEOMoneroIOTABroker vs Broker
Z.com Trade$50XXXX
AAAFx$300XXXX
City IndexNoneXXXX
ETX Capital$100XXXX
FOREX.com$50XXXX
FXOpen$300
ITRADER$250XXX
IronFX$100XXXX
Pepperstone$200XXXX
Plus500$100XX
ThinkMarkets$250XXX
Trade360$250
UFX$100

Cryptocurrency CFD Trading

These companies provide trading in Cryptocurrency CFDs (thus the trader does not own the cryptocurrency). Cryptocurrencies are subject to highly volatile price movement.

Cryptocurrency CFDs

These brokers provide trading in cryptocurrencies CFDs. This is different from owning the actual cryptocurrency (a type of digital currency using cryptography), as the trader is buying or selling contracts based on the movement of the price of the underlying cryptocurrency, and does not own the cryptocurrency itself, thus no 'Wallet' is needed. The underlying cryptocurrency can change in price, therefore allowing it to be traded.

What is a cryptocurrency ?

It is a digital currency, transactions in which are processed on the blockchain. The blockchain is an electronic ledger, containing a record of all transactions in that cryptocurrency. Some blockchains may have other uses beyond payment processing, thus more generally the blockchain can be described as a database.

How is it possible for these digital cryptocurrencies to exist ?

They exist because protocols were developed which have been written as computer program which operate on the Internet. What is the Internet ? In essence it is a distributed network of computing devices. These programs operate on this distributed network of devices. The core protocol in common with most cryptocurrencies, is called the blockchain. This, as has been noted is an electronic ledger - a record of all transactions in the cryptocurrency, consisting of blocks of processed data, connected (or 'chained') together.

The blockchain allows two things: it allows transactions to be processed in a distributed manner and it allows for the record of transactions to be what is called immutable, using cryptography. Literally, cryptography secures the ledger, by attaching each block together in a way such that it is very unlikely that this record could be altered or replaced by another block. The contents of the block consists of verified data, typically transaction details, but can also include data such as programs, for some blockchains.

The process of securing the blockchain, as new data is processed is called consensus. The most distributed way to achieve this consensus is arguably for incentivised miners to process transactions (or more generally data) and secure the ledger. But other ways have been developed, which in effect create layers above the distributed network to process data.

What all this means is that it is possible to have a secure immutable ledger of transactions for a digital currency, which is processed and built in a distributed way, on the Internet. Not every cryptocurrency uses a blockchain protocol, other protocols are being developed, but the common feature of these ledgers is that they are distributed, there is no central ledger which is written upon.

Why are there different cryptocurrencies ?

There is a growing number of cryptocurrencies, but only a small number are available on major CFD trading platforms, so far. The reason there are many cryptocurrencies, is at least partly related to the fact that algorithms can be changed to try and solve perceived problems with other blockchain implementations or to change how the blockchain is used (this is a relatively new technology). These 'forks' can create new networks and new cryptocurrencies. The cryptocurrencies available as CFDs tend to be the bigger networks.

Bitcoin trading

All of these brokers provide Bitcoin CFDs.

Ethereum trading

All of these brokers offer Ethereum (ETH) CFDs.

Ethereum Classic CFD

Some brokers also provide Ethereum Classic (ETC) CFDs.

Litecoin and Ripple CFDs

Most of the brokers also offer Litecoin (LTC) and some provide Ripple (XRP) and Dash (DASH). Other cryptocurrencies may be available as well.

IOTA trading

IOTA is an example of a cryptocurrency which does not use the blockchain. It uses a distributed electronic ledger called the Tangle, which aims to be a more optimised way of dealing with connected devices, in the Internet of Things.

Cryprocurrency trading platform

The Cryptocurrency CFDs can typically be traded on the web platform and mobile apps provided by the broker, where other CFDs are traded.

Cryptocurrency chart

As CFDs on the platform, the chart of cryptocurrencies can be examined using charting tools available, for example chart price types (e.g. candlestick and area charts) and technical indicators (e.g. MACD, RSI and so on).