Swapping your Cryptocurrency

By now you must have already noticed that with the growth of cryptocurrency acceptance, new variants continue to emerge. People are becoming more intelligent and so is the growth of cryptocurrencies. Bitcoin, Ethereum, dogecoin and other existing altcoins are not just strange words on the streets today.

As much as people may not know just so much about them, they at least know that people make fortunes from them. Maybe for a conservative, crypto is another fraud created to swindle unsuspecting investors. Whichever the case, there is something that many people know about cryptocurencies generally.

One may be easily forgiven for thinking that cryptocurencies in all their forms and kinds are one and the same thing. The truth of the matter is that the various cryptos are unique which is why someone may easily choose to invest in one and not the other.

What makes a crypto different from the other?

Sorry, cryptocurrency is not bitcoin but bitcoin is a cryptoccurency. Confused? No. While the name cryptocurrency includes all of the various crypto offerings in the market today, each coin is different from other in terms of value, network, blockchain and the entire validation process.

To be more specific, the network that supports a particular cryptoccurency is very important in influencing its uniqueness. Each crypto distinguishes itself from the other because of the network and block it runs on.

To jog your understanding just a little bit, let’s take a reflection journey on how a crypto currency is brought to life. Knowing how cryptos are created from scratch will give a clearer idea about why for example bitcoin is different from Ethereum.

In cryptocurrency mining, a series of computers (technically called nodes) are used by highly intelligent and dedicated  individuals or groups of individuals to solve complex math. Solving the math results in a validation of a transaction in which the miner is awarded coins.

Each cryptocurrency runs on its own unique network which is built by  cryptographic algorithm. To learn extra information about the complexities involved in birthing a cryptocurrency, see here. Because of this difference in network, a crypto will stand out from the other.

Know what makes bitcoin more valued than Ethereum?

Something which may easily get anyone thinking hard is why one crypto coin is more valuable than the other. More specifically, someone starting on crypto investment will cursily wish to know why fo example bitcoin is more valuable than Ethereum. Such questions are not stupid at all. it’s an innocent and genuine one which tells that someone is really not only chasing the returns but also ready to learn the bits and chips of the entire trade.

in ordinary life, questions such as why is US dollar more valuable than lets say a Danish Kronner arise, right? Now that crypto is not regulated by any government or bank, we can’t say that its value is dependent on performance of any economy.

A crypto currency let’s say Bitcoin is more valuable than Ethereum because of its community acceptance. The more a crypto has been accepted for use either as an investment or completing transactions, the higher its value.

Just like normal paper and metal money, the value of crypto currency is influenced by the interplay of its supply and demand. So, when a bitcoin is very much on demand because it has been widely  recognised as a means of transaction compared to the rest, its value keeps rising.

This analogy on how a cryptocurrency gain value above the rest point to something important. It is safe to argue that the more any of them available in the market today build a reputation and overcome skepticism, the higher market share it gets and so is value.

One crypto is more valuable, why?

Today, bitcoin accounts for more than 41.2479% of the crypt currency market which tells about its popularity. It is also the oldest crypto so far and basks in the glory of being multipurpose. Some cryptocurrencies Ethereum are designed for specific purposes which is to create smart contracts. Bitcoin and Litecoin more general  which is why people keep them for trading, investing, purchasing and many more.

There is always a reason to change one cryptocurrency for the other. I bet you will in the course of your investment consider owning a bitcoin there, Ethereum there or dogecoin, whichever. Lets say you don’t want to pump in any new fiat currency into the crypto world again. All that is available for you to use in crypto investing is the existing currency.

So many things will make an investor want to swap a currency. To mention a few, a plan to enter into an investment where one currency promises better returns than the other or simply need to diversify your crypto investments.

Remember at all times, the business in crypto trading is working around risks while reaping on volatility. When one currency is more positively volatile than the other meaning you can rake in more returns per trade, you simply do a swap.

When do you need to swap your cryptocurrency investment?

Maybe up to now we are talking all this stuff about crypto exchange as if were all nerds already. Sorry , my bad. There are certain terms which will always keep your brain spinning when you deeply get into crypto world. One of them is “crypto swapping.”

Crypto swapping is just a clever way to mean the exchange of one cryptocurrency you hold at the moment for another one of equivalent value. Like we already explained before, the cryptocurrencies have different values so don’t be on the neck of a crypto exchange when you get 13,46 Ethereum for just one bitcoin.

Swapping crypto to make more profits

We already made a point and agreed that nobody joins crypto for the fun of it. It is an investment on the run and the more one can reap at any second, the better. An investor will always expose their holdings to trade. There are times when one currency experiences a boom which means a single unit will earn you more in return. It is at such times of high demand that profits flow.

A smart investor like you; yes you because you are reading this, only need to time when such trends are happening. If you are fast enough to notice a rise in the price of one currency than the one you have, swiftly swap and earn a sizeable margin. Sometimes the boom happens in a few minutes or hours.

Swapping to diversify crypto portfolio

As many people have sweet testimonies about how their investments in crypto have yielded them great fortunes, a sizeable number too are gnashing their teeth and regretting having put all their eggs in one basket. It is never an intelligent business decision to overconfidently store your assets in one crypt currency. The risks facing a single coin is higher than when they are distributed.

The concept of risk spreading is alive in cryptocracy just as in any other investment. You may lose all your crypto to fraud or its value just depreciates so much that it makes no returns as expected. Either way, you shall be on the losing end. To reduce such stupid losses (for the lack of a better word), you need to look outwards and spare some coins in a different network.

Gaining passive income by swapping cryptocurrency

Who does not want to get something by doing nothing? No me and obviously not you. I would go for this option where all I need to do is swap my currency and it gains value just ike that. Although the mention of it may be deceiving to make someone place chunk of crypto holdings to it, it may not be as sweet as that.

Today, there are up to three ways through which people make money from swapping crypto currency without doing anything more. These ways include Staking, Crypto savings accounts and crypto lending and Liquidity pools and yield farming.