If you are a budding entrepreneur who wants to deal with cryptocurrency, then the knowledge of Bitcoin is a must for you. It is because Bitcoin is the first digital currency that created a wave in the new financial world. The elimination of middleman and other central authorities like bank and government is one of the primary reasons that made it much popular among the people all over the world. Now they can transfer money to their loved one, who is living in any part of the world through digitally. All it needs is an internet connection and an appropriate device. The wave of Bitcoin has also struck many traders who do business with buying and selling Bitcoin. Now the question is how is buying and selling of Bitcoin is done. Well, this process is called the Bitcoin exchange, which we are going to discuss today in this blog.
Knowing The Concept Of Bitcoin Exchange
By simply understanding, Bitcoin exchange is a medium or an online platform that enables traders in buying and selling of cryptocurrency. In other words, Bitcoin exchange can also be understood as a digital marketplace, where more than one altcoins or fiat currencies can be used for buying and selling of Bitcoins. BTC or XBT is either ticker, which is used for Bitcoin. If the user wants to deposit money by using any form of deposit or even bank transfer, then Bitcoin functions as brokerage. However, for this service, a user is supposed to pay the price for it. A currency conversion fee is needed to be paid by the trader for making trade between cryptocurrencies. It is somewhat the same as institutional banking, where trading of money is done from more than one country.
Sellers are matched with buyers in Bitcoin exchange platforms. Having an online platform like Bitcoin exchange, buying and selling of Bitcoin by putting a limit order or market order by traders, similar to the traditional stock exchange. By selecting a market order, the trader is permitted for the exchange of coin trading in the online marketplace at the possible best price. If you are not abreast of the latest news on Bitcoin, then let us upgrade you with Bitcoin’s current market price, which is $8,656 from the previous price, which was $8,547. Registration with the exchange is necessary to make the transaction in Bitcoin on an exchange. The user has to go through verification processes for identity verification.
After successful verification, the account gets opened. The funds are supposed to be transferred into the account by the user before buying and selling coins. Note that payment methods can vary differently in different exchanges, which can be referred for fund depositing in bank drafts, bank transfers, gift cards or by money orders. To withdraw money from the bank, the person can choose options provided by exchanges including PayPal transfer, bank wire, mailing or can transfer to the credit card.
Understanding Decentralized Bitcoin Exchanges
As the name ‘ Decentralized’ suggests, it indicates the functioning of decentralized Bitcoin exchanges without any role of central authority. The digital currencies peer-to-peer trading is allowed by these exchanges. A transaction can be done easily without the exchange authority need. There are three benefits of decentralized exchanges, which are as follows:
1. Those who deal in cryptocurrencies are of the view that there is a better matching of digital currencies decentralized structures with decentralized exchanges. In contrary to other exchanges, minimum personal information of the user is required.
2. By transferring assets to other fellow users, it removes the requirements of asset transfer to the exchange, keeping the hacking, thefts and frauds at bay.
3. There are fewer chances of fraudulent trading activities and price manipulation in decentralized exchanges.
Considering Valid Points
Price plays a vital role in withdrawal and making deposits. It all depends on the chosen method of payment for transferring funds. If the risk involved in chargeback from the medium of payment is higher, then the fee also becomes high.
If you have been following live crypto news, then you must be knowing the difference between the Bitcoin wallet and Bitcoin exchange. In the former case, Coins are securely stored by the Bitcoin holders in the Bitcoin wallet, a kind of digital storage service. Whereas in Bitcoin exchange, there is a transaction activity that takes place between the Bitcoin buyers and sellers.
So this was all about the Bitcoin exchange. Hope you find it interesting to gain much knowledge about the subject. It is essential to know about the Bitcoin exchange, especially for those who are new to the cryptocurrency world. Besides knowing about the most popular and worthy digital currency like Bitcoin, you must also be knowing the medium of its purchase. Bitcoin has been a much popular cryptocurrency ever since it made its debut on 3rd January 2009, founded by Satoshi Nakamoto. Since then, it has become much preferred digital currency among people across the globe. The main advantage which it gives to its users is ownership which is free from any interference by banks or government.
Hi, I am Sujit. I am a passionate blogger and crypto admirer. I work for Cryptoknowmics which is known for the best Top cryptocurrency events listing and latest airdrops. I like to find and share new information across the web. You can follow me on Twitter and Linkedin too.