Cryptocurrencies are an ever-evolving world, offering new and exciting opportunities for traders, investors and businesses alike. With the rise of Bitcoin in 2017 which resulted in the price bubble (which inevitably burst), more countries around the world are beginning to pay more attention to this incredibly versatile and connected technology, and how it is set to change the world. With many believing that cryptocurrencies are the future of currency, we’re taking a closer look at a much smaller time-scale future, and whether or not social trading networks are set to mould the future of cryptocurrencies.
What Is A Social Trading Network?
A social trading network is a type of exchange system, which allows traders to connect and share trade ideas as well as actually make the trades and investments that they want to all in one, integrated platform. There are a number of benefits to opting for a social trading platform, with the ability to replicate what expert traders are doing in the markets. With cryptocurrencies still being a particularly new venture for many traders on the market, it is highly likely that beginners will find this copycat feature a comfort when it comes to investing their money. Cryptocurrencies are still in their infancy, and therefore, it is important for traders to have a clear understanding of exactly how to trade, when to trade and how to make the right decision – and a social trading platform can provide all of this information in one place, while also offering a community to support any new traders where relevant.
How Do Social Trading Platforms Work?
It is widely believed that social trading platforms and networks are so easy to manage and be a part of, that a specialist knowledge of the market in which a trader is looking to partake is not necessary. However, due to the volatility of cryptocurrencies, it is always safer and better to minimise risk when trading by having a significant amount of knowledge before putting down money. However, social trading platforms work in a way to ease any pressure when it comes to making decisions, and help to create a truly interconnected atmosphere for traders to enjoy. Social trading can help to shorten the learning curve which many new traders are likely to experience, and can help traders to have a better understanding of market trends and strategies which do and do not work.
Social trading platforms offer an integrated space to trade and build up knowledge. All that is required to start trading on a social trading platform when it comes to cryptocurrency, is to have a wallet in which you can store your cryptocurrencies. Then, all you need to do is sign up and start trading! The layout of a number of social trading networks will differ depending on brand, but the main purpose of one of these platforms is that you can access a hub of knowledge and copy the trades of other crypto-enthusiasts in one place.
What Impact Are Social Trading Platforms Having On Cryptocurrencies?
Many people believe that social trading platforms could be the future of cryptocurrencies, and some even attributed a large proportion of the growth in popularity to these innovative networks. Cryptocurrencies were typically reserved for those who had an in-depth knowledge about all things technical and coding-related, and as a result, the market remained small within the first few years of Bitcoin’s inception. With the introduction of social trading platforms and the hike in price of this particular cryptocurrency, more and more people are beginning to get involved with cryptocurrencies – and social trading platforms are helping to make cryptocurrencies more universal than ever before. With the ability to access cryptocurrencies with nothing but an internet connection, no matter where you are located in the world, social trading platforms are helping to build a huge community of traders and enthusiasts from across the globe – all of whom can interact with each other in one central landscape.
Are Social Trading Networks Safer Than Traditional Exchanges?
It is difficult to determine the true safety of a social trading network when compared to an exchange, due to the fact that very few, if any, social trading networks have been hacked. We have seen a broad number of exchanges, however, suffering from malware, viruses and other hacks which has resulted in the loss of millions – with Mt. Gox being one of the most famous exchange hacks. One thing that social trading networks do offer however, is transparency, and this is even more apparent when it comes to those which utilise the technology of the blockchain which cryptocurrencies run off. Social trading platforms can show all performance stats of traders on the network, as well as their market sentiment in order to help other users understand the true credibility of both the platform and its traders. On an exchange, however, the trader is often very isolated and must rely on forums in order to interact with a broad range of other traders.
Can Social Trading Networks Be The Future Of Cryptocurrencies?
With the increased levels of safety and the ability to learn from other traders, it is highly likely that social trading networks are set to be the future of cryptocurrencies. These networks can make cryptocurrencies more universal than ever before, and with this, cryptocurrency popularity is highly likely to be driven even higher. With the vulnerability of many exchanges, cryptocurrencies could find sanctuary whilst being traded directly through social trading networks.