The answer for ‘what is bitcoin trading?’ is not as easy for everyone as it is for blockchain/crypto enthusiast or experts. It is therefore important that after coming to the knowledge of ‘what bitcoin is’ (here), the impending trading benefits are known as well.
A Very brief Trading Brief
A simple exchange of Bitcoin for something else, ranging from another digital currency to fiat money, is Bitcoin trading. It can be likened to the trading of any other physical goods in a physical market but the bitcoin trading is done in a financial market. Bitcoins are not physically seen as we know, just like other digital assets you may have heard of like ripple, ethereum, etc. According to David Rudo, A social media marketing entrepreneur on the subject of Bitcoin Trading,
“Bitcoin trading or trading in cryptocurrencies means nothing more than trading in a currency pair. These are usually bitcoin and euro or ethereum and euro or a cryptocurrency in combination with bitcoin or ethereum. Nearly all available cryptocurrencies can be traded and traded on the major cryptocurrency exchanges or trading centers.”
A Hypothetical Instance; if a person possesses 500 Ethereum (another type of cryptocurrency) and wants to trade for some Bitcoin. The person locates a buyer through the available means. The 500 Ethers are then valued and the person in possession of 500 Ethereum will get say, 150 Bitcoins (being that the value of Bitcoin is Higher than Ethereum’s ) in exchange for the 500 Ethers. Bitcoin trading has occurred in this instance.
In juxtaposition, the foreign exchange market (FX), remains the largest financial market in the world, with an estimated 5 trillion euros daily in trading volume as of 2018. The cryptocurrency market is relatively smaller with a market capitalization of 70Billion in 2018’s first quarter and a rise to over 120Billion by this year’s second quarter, but one can say that it is a consistently growing market so far.
Since Satoshi Nakamoto’s invention of the digital currency Bitcoin in 2008, this digital currency has been regulated as an open-source platform and become popular in the crypto exchange market above all other altcoins later created. Just as there are many other coins other than Bitcoin so also are there many crypto exchange platforms established by individuals, investors and crypto enthusiasts amongst other people. Bitcoin Trading is notably profitable for professionals and beginners as well and is easily done online through whatever platform one chooses.
Bitcoin’s Global status, for one thing, makes it easy for anyone anywhere to join in its trading. There is no barrier to which set of countries can transfer bitcoin to another set of countries or not. Bitcoin is globally recognized and can, therefore, be transferred between users of cryptoexchange across the globe.
An additional factor which may be confusing but interesting is the volatility of Bitcoin; I for one have noticed price movements by the minute and hour of bitcoin price from live data feeds (You can see an example from coinratecap.com ) and wondered what this constant movement would mean for traders. Looking on the bright side, this volatility is good for traders/investors. The rate of 1Bitcoin=$10000 dollars in the morning can skyrocket to 1Bitcoin= $15000 by nightfall. The exchange rate of the cryptocurrency is subject to supply and demand fluctuations and It is important to note that a combination of skills and luck as in any other investment is needed to study price patterns or major price fluctuations.
Even more, is the range of exchange platforms to choose from as mentioned earlier, everyone has their personal specifications in choosing the exchange that suits their needs. Some platforms may choose to allow users trade a maximum of 10 types of cryptocurrencies at a time, another may allow over 50, some platform rules, terms, and rates will differ from other, so it is up to the user to make a preferential choice.
Bitcoin trading is timeless. This timelessness is in the sense that one can trade at any time. Bitcoin trading runs for the twenty-four hours of the day, and seven days of the week. Traditional financial institutions may have working hours to initiate and complete transactions but that is not the case here.
The fact that bitcoin is beginning to be accepted as a means of paying for commodities in certain businesses around the world is something to bring up. Imagine being a user with a balance of 5000 Bitcoins in their cryptowallet, ( you can read on cryptowallet here ) who wants to buy house furniture from a dealer and the furniture the user has selected to buy is in the value of 150 bitcoins when measured against the fiat money of the dealer’s location. All the user needs to do is authorize the transfer of 150 bitcoins using the cryptowallet key to pay the furniture seller in exchange for the furniture up for purchase. Seamless and cashless procedures for financial transactions are highly appreciated. if this means of payment is largely spread across the world, bitcoins will probably never be extinct.
Compared to FX trading, bitcoin trading is fast, not needing more than 20 minutes to complete a trade. In FX verification of an account may take several days, but direct trading is done on crypto exchange platforms as it is secure enough to allow only verified accounts trade in the first place. Bitcoin winnings are also instantly available within 10-20 minutes in the designated crypto wallet when a payment is received.
So there’s speed, security from the blockchain platform, global standard, price volatility amongst other things that may be omitted here more to entice one into taking a dive into the waters of bitcoin trading. It is usually easier to drive a point home with the use of comparisons, consequently, there is no intent to downplay FX or solicit for Bitcoin Trading. This piece is merely to spark a little enlightenment for readers without complete prior knowledge of bitcoin trading benefits
Credits- Quora, Mark Anthony
JOIN OUR COMMUNITY