How do Cryptocurrencies really work?

These days the use of strong cryptography techniques to secure financial transactions or the transfer of assets through a centralised banking system is commonly known as Crypto currency. This currency trading requires investors that use leverage for profit from both prices and exchange rates. In simple language, leverage is a loan given to an investor by some broker or some investor’s trading account. This system makes it easier to conduct transactions through the use of public and private keys for security which companies like Prime XBT initiate.

Crypto currencies are a decentralised system that works upon block chain technology. It does not need a third-party involvement for the fund transfer between two parties. When the leverage is in 50:1 ratio, then it means that the trader will get at least 1/50 of the trade value in cash to the trading account. But when a person does trade with 100x leverage, then the trader will receive at least 1/100 that amounts to a total of 1% of the total value in cash. The fund transfer using the crypto currency is done with a minimal-fees required for processing.

Well one the main curiosities about crypto currency is in making a deposit $100 and trade $10000. First of all, it is not some kind of technique or strategy, and it is a trading system called Compounding. Compounding is related to finance and so is cryptography.

It is the amount of profit received over a period of time without any withdrawal of money. If you deposit $100 for an entire one-year period without any withdrawal, it is very sure that over this one year period you must have made quite a lot of profit, though it will not be $10000 in a year.

1-100x250-Kopie

The laws of compounding are:

  • Do not withdraw your profit till you reach the target period.
  • Use a reasonable lot size
  • Money management is very important and should be implemented at all costs with effective measures.
  • And definitely hard work.

If you talk about a 10% monthly profit the following table below would summarise it-

Balance Profits
$100 $10
$110 $11
$121 $12.1
$133.1 $13.31
$146.4 $14.64
$161 $16.1
$177.1 $17.71

Well, to be honest, there isn’t any need to be afraid of leverage or trade using the crypto currencies if you know how to manage it properly. As recommended by professionals at Prime XBT, one should always remember that the leverage is totally flexible and can be customised according to the trader’s need and requirements.

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