An Overview of Bitcoin Exchange
What is Bitcoin?
Bitcoin is a type of cryptocurrency. It is one of the first digital currencies to use peer-to-peer (P2P) technology to facilitate instant payments. It is a user as well as a tech friendly digital currency and thus public can access it easily. It encompasses exciting uses with its different features that could not be covered by previously designed payment systems. Nobody owns or controls Bitcoin.
What is a Bitcoin Exchange?
An exchange is where buyers and sellers conduct their business. A Bitcoin exchange is where transfers between buyers and sellers of bitcoin takes place. A seller of bitcoin deposits BTC with the exchange’s address. He can then use his positive bitcoin balance in the exchange to sell his BTC for Dollars or other coins.
Working of a Bitcoin Exchange:
The first step is to install a Bitcoin Wallet App on your computer or mobile device. The Bitcoin Wallet is simply a free, open-source software program that will generate your first Bitcoin address.
The second step is to verify your account by submitting your PAN card details, Bank details, others if necessary. Once verified, you must deposit some amount in your Bitcoin wallet in order to purchase bitcoins. Thus, you can buy bitcoins either through your credit card, a bank account or with cash, depending upon the terms and conditions of the Bitcoin Wallet App. Your bitcoins will be transferred directly to your Bitcoin account.
Now your Bitcoin address has been created and you have acquired Bitcoins, so you can use these purchased bitcoins to send and receive payments directly to a buyer/seller or company/firm who accepts bitcoin, without the need of an intermediary such as a bank or credit card company etc.
The company/firm will share with you their Bitcoin address/QR Code to which you can send your Bitcoin payment. You direct the payment to that address thereby completing the transaction.
There is a complete record of all transactions on the bitcoin network and everyone can view it. All Bitcoin transactions are included in a shared public transaction log known as the “Blockchain”.
So now we know the whole process of bitcoin functioning and how Bitcoins can be used for making all sorts of real transactions.
Benefits of a bitcoin exchange:
Bitcoin Exchanges help in carrying out faster and safer transactions in comparison to any other types of exchanges dealing in bitcoins.
There is a full time availability of Bitcoin Exchanges which provides flexibility in making transactions to the customers.
Bitcoin is a digitalised currency which ensures that the transactions can be carried out anytime and anywhere in the world.
Bitcoin exchanges are not typical intermediaries such as banks, financial institutions etc. They are a platform through which buying and selling of bitcoin takes place.
Bitcoin exchanges help in performing transactions without the involvement of any third party or intermediary.
The most important feature of a bitcoin exchange is that all transactions can be monitored through a PC or a smartphone over the internet.
A user can use bitcoins to purchase any kind of assets, thus making it a flexible and advanced medium of exchange.
Bitcoin Exchanges are facilitating safer, faster and securer transactions over the internet. They are guaranteeing complete transparency to its users by enabling access to information on their PC and mobile phones. The above article gives you a summarized picture of a bitcoin exchange.