Bitcoin exchanges works on the concept of digital currency. It is a sort of software based payment system. It doesn’t depend on any central authority so it is managed and controlled by its users all over the world. The price depends on the level of confidence of its users.
How Bitcoin Exchanges Work
It works like any other type of currency exchange. It is easy to make transactions through it. Analogous to physical trade, you have to pay to buy Bitcoins. The difference is that you need to open an account with a Bitcoin Exchanger.
The Pros of Bitcoin Exchanges
- · Low risk of inflation. The number of Bitcoins is fixed. There is no possibility of any anyone printing off more money.
- · It is less expensive to operate.
- · It can be transferred instantly throughout the world without incurring any transaction fees.
- · Like traditional currencies, its quantity is fixed and no one has the right to create new coins.
- · It is an independent currency; no government has any control over it.
The Cons of Bitcoin Exchanges
The number of Bitcoin users is growing steadily however it is not a widely used exchange system. Its level of acceptance is still low.
Bitcoin software is still in its beta phase and there are a number of features which still need to be fixed. New modules are under development to make Bitcoin exchange software safer for all.
How to Make Money with Bitcoin
The Genesis Bitcoin Exchanges
The first Bitcoins were in a block of 50 created by Nakomoto Satoshi in January 2009. It did not have any value at first. However, Satoshi is an apparently fictional name – no one know who she or he is.
The Concepts behind Bitcoin
1. Bitcoin wallet
Is an application that runs on your PC, mobile device or online. It grants you access to your Bitcoin addresses. You can use your wallet to create an account at no cost.
2. Bitcoin address
It is acts as your bank account. It is identified by a sequence of numbers and letter, similar to a bank account number. Each address has its own balance of Bitcoins.
3. Ledger balance
You may wonder who keeps track of the accounts if there is no central authority. Well, a copy of ledger is maintained on each wallet that forms Bitcoin network. Your Bitcoin wallet keeps all the transactions you ever made.
4. Bitcoin exchanges transactions
In order to send Y units of Bitcoins from your address to another address; what your Bitcoin wallet does is to broadcast the network that Y units should be subtracted from your address and added to the recipient address. Wallets (nodes) in the Bitcoin network, will pass the transaction to their copy of the ledger and then apply to other nodes to update the network.
Bitcoin exchange is a big deal right now, however not everyone understands. It seems complicated to people but it will not take long before individuals begin to accept this virtual currency system that is open, independent and more secured.
Please check out CoinDesk for most recent prices of the coin.