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The Complete Guide to Trading Bitcoins

Bitcoin with chart

Bitcoin or BTC is a decentralized digital currency system, designed to give online users the ability to process transactions via a digital unit of exchange known as Bitcoins. In other words, it's a virtual currency.The Bitcoin system was created in the year 2009 by an anonymous group of individual who used the pseudonym Satoshi Nakamoto. Since then this digital currency has garnered huge attention, popularity as well as controversy as an alternative to Euros, Us Dollars, and commodity currencies such as gold and silver.

The Benefits of Trading the Currency

There are many reasons why you should consider investing in Bitcoins. Some of these reasons include:

Ease of entry: Unlike the stock market, there are almost no barriers to entry into the Bitcoin market. All you need to do sign up for a wallet and find a seller that you can buy from. Also if you’re interested in selling your Bitcoins, all you need to do is to identify a buyer, and you are ready to go.

Global: You can trade this digital currency from anywhere in the world. This means that a person in Japan can trade Bitcoin with a person in Africa or any other place in the globe. This makes the currency convenient as it’s not affected by the economy of a single country.

Volatile: Just like the other currencies traded in the foreign exchange market, Bitcoin is highly volatile. This means that its price changes quickly due to slight shifts in the economy. So if you take advantage of these changes, you can make big profits.

24/7 trading: Trading of Bitcoins is different from the stock market that usually operates during the business hours because it happens 24/7. The trading limitations of the currency are only on you-not on time.

How to Get Bitcoins

If you're interested in investing in digital currencies, then the first thing is to learn how to buy them. Some people think that it’s really difficult to buy Bitcoins, but the truth is that buying Bitcoins is very easy. It can be even easier than opening a bank account. The following steps will guide you through:

Get a Bitcoin Wallet

This is the first step of buying Bitcoins since you’ll require a place where you will store, receive, your Bitcoins. When choosing a Bitcoin wallet, the level of security should be your priority. Different wallets provide varying levels of security, and you can choose a wallet that offers the security that works best for your Bitcoin transactions. The main Bitcoin wallet options are:

  • A wallet software that can be run on your laptop, desktop computer, or mobile device. With this wallet, you can store your Bitcoins safely in things like thumb drives.
  • A web-based service also known as an online wallet. You'll need tocreate an account to store your Bitcoins. Once you can you have an account, some exchanges will allow you toconvert your local currency into Bitcoins.
  • The last one is a multisig wallet. This involves the use of many different keys to keep your Bitcoins safe and offline The next step after getting a Bitcoin wallet is to fund it and start placing orders.

Where to Buy Bitcoins

There are several ways of buying BTC. The easiest and certainly the most convenient way to get Bitcoins is to buy them at an online Bitcoin exchange site. Today, there are numerous Bitcoin exchanges, each of them with their own unique properties and advantages. Some of them include:

LocalBitcoins: - This is a Bitcoin exchange where you can arrange face-to-face transactions and even negotiate the prices. Its escrow service has made the exchange popular because it adds an added level of protection for the traders. With this site, you can pay for the Bitcoins via PayPal, bank transfers or cash.

Coinbase: - This is actually one of the most popular and safest Bitcoin wallets with one of the easiest ways of buying Bitcoin. Upon signing up, you get a $10 registration bonus. Coinbase has a trust score of A+ and you your Visa card or bank transfers to buy Bitcoins.

BitStamp: This Bitcoin site suits the requirements of a conventional exchange. BitStamp acts as an intermediary by allowing its users to trade with other users and not the company itself. The liquidity of BitStamp is high, and you have a good opportunity to find someone who is willing to trade with you.

Bitquick: - This site is beginner friendly, and it allows its users to buy and receive payments for Bitcoins via hard currency and bank transfers.

Other Ways to Buy Bitcoins

You can buy Bitcoins from a private broker. If you can find a reliable broker, you can hook up with them and buy Bitcoins. This has some benefits, but it also has its drawbacks. The benefit of using a broker is the process is completely anonymous. You don’t need to use your real name or give your personal details or any other details about yourself apart from your wallet number where they can transfer the funds to you.

But of course, this anonymity comes with its risk as well. If you choose an exchange, the risk of losing your money is lower. Of course, there are some exchanges that have disappeared in the past, taking every user’s Bitcoins with them, but the reputable more established exchanges proven themselves as more trustworthy.

When you trade with a broker anonymously, you don't have any security of the exchanges. They could easily rip you off. That said, buying from a private is not bad, but it's vital to have safety measures in place. Otherwise, you risk getting burned. Bitcoin has completely changed the fiancial world. Ever since it was introduced in 2009, Bitcointrading has increased greatly, and it's even on the rise today. The value of BTC has also increased with its popularity. In some places, you can even buy commodities with Bitcoins. Many online retailers have also started accepting BTC for the real-time purchases too. So if you're looking to earn some money and even invest for your future, you can start with buying Bitcoins.