Bitcoin is considered as one of the most profitable investments in today’s time. Started in 2010 with the core value of $0.06, in December 2017 Bitcoin was valued at nearly $20,000. This is surely an insane amount of profit that any investment can ever offer. So, it can be said that investing in Bitcoin is surely a great deal. Investing in Bitcoin is a great deal as you can even use it for your daily life transactions as well like purchasing goods and services. In order to trade or transfer Bitcoin, you will be required to join a Bitcoin exchange. Keen to know more about it? Keep reading.
What is Bitcoin Exchange?
Bitcoin exchanges are the websites where Bitcoin trading activities take place like buying, selling and exchanging. You can even exchange your physical currency with Bitcoins. In order to use an exchange the user is supposed to verify their ID and create an account. Through the account they will have access to fancy trading tools, which will allow them to trade professionally. Moreover, if the user is not an active trader and is just looking to make an occasional trade, he can use various other platforms without even creating an account.
Types of Exchanges
There are 3 types of exchanges that traders can go for. All 3 of them are mentioned below:
- Trading Platforms: These are websites full the distance between buyers and sellers for making the transaction successful and possible. In return, these websites generally charge a certain amount of fee from each transaction.
- Direct Trading: Through direct trading platforms, traders from different countries get in touch and exchange of transfer Bitcoin. In the system of direct trading, there is no fixed market price. Rather than that, sellers can set the exchange rate by themselves.
- Brokers: Anyone can visit these websites in order to buy Bitcoins. Brokers have the liberty to decide the price of the Bitcoin on their own. The working system of brokers is no different from foreign exchange.
Steps of Trading Bitcoin
There are certain steps involved in trading of Bitcoins. All of them are mentioned below:
- Get a Bitcoin Address
The first step in Bitcoin trading is obtaining a bitcoin address. To get one, a user is supposed to have a Bitcoin wallet to store the funds for future trading like sending, receiving, and exchanging Bitcoins. In technical terms, a bitcoin wallet generally houses the public and private keys, instead of storing the funds.
- Choose A Wallet
In order to store the funds and trading Bitcoins, a wallet is a must. There is a wide range of wallets that you can go for such as paper wallet, mobile wallet, desktop wallet, and cloud wallet (online wallet). These wallets store every bit of information related to a user’s Bitcoin account. Generally, wallets do not charge any fee to create and account. Moreover, a complete verification for the user is done by wallet developers for safety purposes.
Trading in Bitcoins is becoming common these days. It simply needs several necessary steps for initiating funds. Mentioned above are the basic requirements that you need for storing and transacting your Bitcoins.