Cryptocurrencies are literally converting the way digital transactions were being carried out. Bitcoin te specific is often applauded for triggering the next financial revolution.
Being decentralized ter nature, Bitcoin, much like any other cryptocurrency is not supervised by central authority, federal agencies or administrators. The transactions are conducted directly inbetween users and are hence relatively anonymous, which makes Bitcoin very popular. The transactions are however verified by the network knots and relevant recording is done te a form of public distributed ledger called the blockchain. This means that no large banks or regulatory authorities cannot control the money one wields through Bitcoins.
Additionally, the ease of operations, relatively lesser transaction time and almost negligible transaction fees are few perks that Bitcoin traders love. Spil Bitcoin gains enhanced acceptance among the business fraternity, more and more retailers and businesses are accepting this fresh mode of payment. The bandwagon includes eateries to coffee shops and real-estates.
The Rising Popularity of Bitcoins The popularity of Bitcoin has bot on a constant rise. While Bitcoin marched ahead to a fresh high of $8200 ter November 2018, the industry pundits expect the rise to proceed and kasstuk the $10000 mark by the end of this year. That equates to an unbelievable and staggering 700% growth year to date. Ter spite of negative speculations from Industry top bosses te financial powerhouses such spil Warren Tapkast and JP Morgan, the popularity of Bitcoin proceeds to rise.
Spil the name suggests, Bitcoin exchange is a digital marketplace that facilitates the buying and selling of Bitcoins. Interested traders could buy Bitcoins for fiat currencies (legal tenders) or other cryptocurrencies such spil Ethereum. Since Bitcoin is essentially a decentralized currency and involves no controlling authority, the price and value of Bitcoin is largely determined by the transactions on popular BTC exchanges.
The Bitcoin exchange rates vary significantly since they aren’t supervised by any federal government and doesn’t need to abide by any International banking policies. The sheer anonymity of transaction and the ethical perspective involved also determine how exchanges set the price of Bitcoins.
Lotsbestemming of your hard earned dollars are at stake when you trade for Bitcoins. While accomplish anonymity might be difficult while using popular (and credible) exchanges, it is significant that you carry out necessary checks before you commence trading. Selecting an apt Bitcoin exchange practically depends upon the following key criteria:
- Which Geography is the Exchange located te: Knowing the country where the certain Bitcoin Exchange is hosted helps you gauge the laws and regulations that might govern financial transactions inbetween your huis country and the exchange host country. The ‘Terms &, Conditions’ pagina usually contain a list of currencies that the exchange accept and don’t accept.
- The credibility of the Bitcoin Exchange: Similar to choosing a handelsbank, you usually choose an exchange that you can trust. Accomplish anonymity might be difficult unless you buy Bitcoin from a local person through ordinary off-record contant transaction. The exchange should have certain ‘Know Your Customer(KYC)’ and abide by the Anti-Money Laundering (AML) laws, so that your money and transactions are safe.
- Liquidity suggested by the Bitcoin Exchange: The amount of liquidity that the exchange offers is an significant parameter for the ease with which one can buy and sell Bitcoins. Liquidity is a measure of how lightly one can sell-off Bitcoin without the price being significantly druppel. So more the volume of buyers and sellers on an exchange, more is the liquidity. So look for the volume of traders operating on the exchange to measure its liquidity.
- Look at the Order Book Volume: An order book volume is a pseudo-declaration of the buy and sell orders that are being suggested on the exchange. Any exchange with moderate customer base would publish their order book. The higher the book volume, the more customers are using the exchange for trading and hence higher liquidity.
- Transparency of operations: While your hard-earned dollars are at stake, the exchange should have an informative treatment towards keeping their users aware of current rates and price trends.
- Speed of transaction: This is particularly significant. How long will it take before the Bitcoin is sent to you after purchase.
- The ‘Locked in’ price: Also look into the ‘locked in’ prices. The ‘locked in’ price is the price you buy at, even if the Bitcoins take a few days to reach you and the prices fluctuate te the meantime.
- A strong support helpline: The sheer anonymity of Bitcoin transaction has a downside. You could face serious financial losses if the Bitcoin transaction errors out due to technical glitches or other unforeseen events. The exchange should have a strong helpline which could provide suitable assistance to recover the transactional loses.
- Transactional Fees: Unlike the plane fees structure charged by discount brokerages used by Investors ter the US, Bitcoin exchanges usually charge a variable percentage fees which decreases with the USD volume being traded. So trading with Bitcoin could get decreasingly expensive when you trade often. Also, most major Bitcoin exchanges charge an extra toverfee for withdrawals.
- Ease of use: With the advent of the smartphone age and cheap gegevens plans, most traders world-wide use hand-held devices to access and transact on exchanges. Hence the Bitcoin exchange should be compatible and responsive on major Android and iOS mobile devices.
- Purchase from Bitcoin from leading Exchanges: While selecting the exchange of your choice, find out which payment mechanisms are supported by the exchange verhoging. Most leading exchanges support payments through:
- Wire transfers
- Credit Cards
While Bitcoin and cryptocurrencies are hailed spil the onset of a financial revolution, reserve care should be administered while choosing a legitimate and safe Bitcoin exchange. Such exchanges with security loopholes turn into a hackers’ honeymoon. Mt. Gox is a classic case which filed a bankruptcy protection after being ‘robbed’ of a staggering $468 million worth of Bitcoins.
The Famous MtGox Hack
Te another event, MtGox closed it trading verhoging after being hacked. While the company lost its Bitcoin holding of 2000 BTC, it owed its customers 750000 BTC which amounted to harshly 284m.
The breach resulted te unexpected freezing of Bitcoin withdrawals and distributed Denial of Services (DoS). Te another case which took the Internet by storm wasgoed $Two.7 million worth of Bitcoin that went missing from the Escrow accounts of Silk Road Two.0 exchange.
Many leading Bitcoin exchanges such spil BitFloor have faced hacks, Ponzi schemes and professional threats. Hackers accessed an unencrypted backup of the wallet keys and stole 24000 bitcoins from BitFloor.
Te latest years, the security features for most Bitcoin exchanges have bot enhanced. Two-factor authentication including SMS or email alerts, mail encryptions, wallet monitoring and other security features have bot implemented by most exchanges.
Most Bitcoin exchanges have a strong authentication mechanism te place. Security is obviously of paramount importance on exchanges since they overeenkomst with good amount of money.
Keep your Bitcoin Wallet Safe
Before wij wrap up, here’s a special word of advice. The exchanges listed above are considered to be the best te terms of features and security measures they implement. Yet the money you store te those e-Wallets is essentially your hard-earned contant and you need to be toegevoegd cautious, ter addition to whatever security layers the exchange has te place.
- Encrypt your wallet: Encrypting your wallet helps you set a password for your wallet that you access through a smartphone, etc. Using a strong password is obviously recommended.
- Offline wallets are good: This involves storing the wallet content at a safe place that isn’t available on a rekentuig network. An offline wallet that is periodically synced is usually safe from network vulnerabilities and malicious access threats. The term ‘cold storage’ is used to define the mechanism of storing the encrypted private keys away from the preying eyes on the Internet. The cold storages are kept on an offline physical medium.
- Multi-Signature Access: Bitcoin includes a very interesting multi-signature feature that requires 3-5 person to sign (validate) for a transaction to be successful. Many web wallets provide similar multi-signature features which helps users to keep their funds safe from malicious attempts.
Most of the top Bitcoin exchange platforms have bot very attentive towards their security features. With the skyrocketing popularity of Bitcoins, more and more top investors are showcasing profound rente te this emerging form of investment. The Bitcoin exchanges therefore have bot making every effort to provide safe and stable service.
1. Coinbase Bitcoin Exchange
One of the most popular Bitcoin exchange, Coinbase wasgoed established ter 2012 and is supported at almost 32 countries worldwide. It exchanges Bitcoin and other alternative Cryptocurrencies such spil Ethereum and Litecoin. Coinbase aims at creating an open financial system te the world to bring out enhanced economic freedom, innovation and efficiency. This would essentially act spil a superb equalizer for the world economy. Main highlights of coin exchange are spil follows-
- Coinbase mobile bitcoin wallet is well supported on google play store and App store. It helps you to access your coinbase wallets, vaults and all transaction details on the go. It facilitates buying and selling on the phone itself by connecting it to the handelsbank account.
- Coinbase has 10M+ trusted users with an incredible $50B+ trading credentials
- Coinbase stores 98% of customer funds offline. Sensitive gegevens which resides on the server is entirely disconnected from the internet. They leverage high security on transaction details and gegevens is split with redundancy, AES-256 encryption which is then copied to FIPS-140 USB drives and paper backups. The backups and drives are securely distributed across various deposit boxes and vaults around the world.
- All the digital currency held by Coinbase is well insured. Te case of online breaching of its account storage the insurance policy would voorkant it by paying out for the lost funds of the customers. The fiat currencies are held ter custodial handelsbank accounts which solely belongs to the customers.
- Coinbase promotes recurring buying and selling through its buy or sell pagina. This is ideal for people who want dollar cost averaging-which is slow buying to avoid risks or the ones who automatically want to sell the bitcoin they receive on account of their paycheck.
- Buy Widget-with this instrument you can directly buy bitcoin into your app.
- Wallet API- it creates and manages the Bitcoin, Ethereum and Litecoin wallets. Also promotes on the app buying and selling of currency and sending out payments.
A tabular representation below provides the key advantages and disadvantages.