It’s not every day you come across someone who wants to talk about trading bitcoins, but what is really involved? What is a bitcoin (also called BTC), and how would one go about trading it for personal gain? In the following article we will touch on that very subject, so pay attention carefully.
To begin with, a bitcoin is a in essence an electronic version of cash. I know, sounds super sci-fi, but when it comes down to it, it actually is a pretty simple process. Starting description in 2008 by producer Satoshi Nakamoto, a bitcoin is a peer to peer electronic cash system.
The system is not managed by any specific authority, but bitcoin production is based on an open sourced cryptographic protocol (try saying that 3 times fast). This means that the beauty behind bitcoin transfers, are that they can be transferred without necessarily needing an intermediate banking company. Whether by smartphone, computer, tablet device, virtually any console that will allow internet use.
Bitcoin miners are the servers used to process bitcoin transactions, and they have an internet based network over which they communicate freely. This allows them to confirm transactions and even add them to a localized ledger which is updated every now and again. So we have the basic idea of what a bitcoin is, and how it is ran, but just how does one go about trading bitcoins?
If you know one thing about money transactions, it is that there is always a payer, and a payee. The same basic principle is involved in trading bitcoins. In a bitcoin transaction, each owner can transfer bitcoins by signing them over to the next owner, digitally of course. The payee can then verify the previous chain of actions or trades to ensure ownership.
In the long run, it is supply and demand that creates such a widespread market for bitcoins. It is literally a globally reliable system in which one can buy and sell bitcoins from different markets. Thus come the term “Trading Bitcoins”. If the stock market had a baby brother, his name would be bitcoin.
Finding and buying bitcoins to sell is where the challenge come in. The simplest way to get into trading bitcoins is to invest proper money into a bitcoin exchange. There are quite a few of these, so you can check out a bitcoin chart and see which one makes you feel confident. After a good analyses and comparison, you might choose an exchange.
At this point, one can no simply use your credit card. Only cold hard cash is what can get you stated. You can phone your bank and have money wired or transferred. At this point you can buy some bitcoins. Now you have something to work with and sell and buy more in this giant game of trade.
All in all trading bitcoins is an interesting peer to peer system that is not run by any one financial institution. By buying and selling these bitcoins, it creates in itself a world of trading and a market altogether.