The cryptocurrency world is growing and for those us who might not be savvy with the ins and outs of these digital coins quite yet, understanding everything else that comes with could certainly be out of reach. In this particular post, we’re taking a look at cryptocurrency exchanges, and more specifically, the difference between regular cryptocurrency exchanges, and social trade sites. Here is what we found.
What Is A Cryptocurrency Exchange?
Like with any form of stock or investment market, an exchange in cryptocurrencies is exactly that – an exchange. Investors and traders will go into these exchanges and exchange one cryptocurrency for another, or in some cases, a cryptocurrency for regular fiat currencies dependant on the site or platform that they have opted to use. These exchanges offer real-time following of the prices and trends within cryptocurrency markets, though some only offer crypto-to-crypto trading which can ultimately make the USD-Coin exchange rate difficult to understand.
These exchanges are essentially the same as any other traditional stock exchange and any socialisation regarding your trades will need to be done outside of the platform.
So What Is A Social Trading Network?
With the above in mind, a social trading network is much easier to understand. In essence, these networks operate in a similar way to a regular cryptocurrency exchange, but with the added bonus that they contain a social media element. With a news feed not too unlike that of Facebook, Twitter or LinkedIn, investors can take to their social trading platforms to discuss trades, leave feedback for their peers or follow influencer behaviour.
Copy trading is another feature with leading social trading platforms, which ultimately allows users to not only see what the industry experts and their peers are doing but also copy them.
Which Is Best?
Determining which is best ultimately comes down to personal preference, priorities and experience within the industry. Due to the decentralised nature of cryptocurrencies and the market as a whole, those looking for help in their first investment ventures could certainly benefit from social trading platforms. The opportunity to jump in and take a look at what other traders are doing and where trends are going can give any investor a whole new way of watching the market beyond the usual indicators, which is certainly something that plenty will agree is beneficial.
However, those who have plenty of experience in the industry may prefer traditional trading methods. While leading investors could offer their wisdom on these social sites, the benefit they’d gain may only stretch as far as an insight into the industry and they could prefer the uninterrupted focus on the market as a whole. While keeping up with the industry is undeniably useful, preferences are certainly all a matter of opinion.
All in all, regular and social exchanges are two equally as valuable methods of trading that can offer different benefits depending on needs and preference. Social trading networks open investors up to a whole new way of getting involved in the industry, but those used to traditional methods of trading may want to stick with what they know – what would you try?