Technology is advancing by leaps and bounds. Daily introduces new conditions and systems for business and communications. The Internet has been a major contributor to this progress; especially when it comes to the field of business. Online trading or online currency trading has recently attracted many traders. One of the common forms of online trading is the Bitcoin exchange.
What is Bitcoin?
Bitcoin exchange is a new money system for the internet that works on the concept of digital currency. It initializes the peer to peer payment system for individuals who do not have a central authority. It uses a new concept of crypto currency that was originally introduced in 1998. Cryptography controls the creation and transactions of digital money. Bitcoin works through a software system and has no central controlling authority, so it is equally managed and controlled by its users worldwide.
Working on the Bitcoin Exchange
One can operate a Bitcoin exchange just as one operates any other type of currency exchange. Just like working with banks, it is easy to transact through Bitcoin Exchange. Analogous to physical trading, the user must pay to purchase bitcoins. The difference is that the person has to open an account with some Bitcoin Exchanger. The user’s paid asset will be available in the form of a digital currency that can be used to purchase any type of product. Bitcoins can also be exchanged with other Bitcoin holders. This system works similarly to exchanging money in banks.
In almost all payment systems, payments can be reversed after completing a transaction via PayPal or credit cards. But with Bitcoin, the situation changes because once a transaction is made, one cannot go back or reverse it. So be careful while exchanging your bitcoins with currencies because you may face chargeback issues. It is preferable to make exchanges with other Bitcoin holders near you.
Advantages of Bitcoin Exchange
Bitcoin currency exchange is brand new. It’s sort of a software based payment system where you transact digitally. Here’s how it can benefit you:
· Make transactions faster than other systems
· Always available for transactions
· Make transactions from anywhere in the world
· Make safer transactions
· Carry out transactions without the intervention of a third party
· Monitor all transactions from your home computer or smartphone
· Buy any type of asset with Bitcoin
Disadvantages of Bitcoin
Bitcoin exchange is an innovation in the economic systems of the world. When it is used in practice, some disadvantages also appear. Some of them are as follows:
Ø Market acceptance
The number of Bitcoin users is growing, but it is not yet a widely used currency or exchange system. Its level of acceptance in financial matters is still low.
Since Bitcoin is not commonly used, it is not a stable currency. However, there is hope that this volatility will decrease as the user list and the amount of bitcoins in the market become more easily used.
Ø Partial development
A big problem is that the Bitcoin software is still in its beta phase and has a number of imperfect features that still need to be fixed. New modules are under development to make Bitcoin exchange safer for everyone.