Bitcoin exchange is a digital marketplace that acts as an intermediary between the buyers and sellers of the cryptocurrency. The buyers and sellers involve themselves by first buying and selling of bitcoins using different fiat currencies or altcoins. This came into existence in the year 2009 and recently celebrated its happy 10 years of existence in the market across the globe. Know how to buy bitcoin instantly in this article.
How do Bitcoin Exchanges function?
Bitcoin Exchange acts pretty similar to how the Banking System functions. An individual needs to deposit the sum of amount in a currency that’s supported by the exchange, in his own account. In return, the deposited amount can be traded further with other users of the exchange and then one can withdraw the amount.
It can well be said that Bitcoin can easily be swapped at any cryptocurrency exchange for any traditional currencies such as Dollars, Euros or Renminbi.
Basically, there are two existing types –
- Regular bitcoin exchanges- These are online platforms which are generally owned by the intermediaries where you only get to deal with the platform itself. It then goes on to execute the transaction in the open market where the service fee is payable.
- Peer-to-peer cryptocurrency exchanges- These platforms affix with potential counterparts for trading. Processes are entirely digital with no intermediation.
Advantages of Regular bitcoin exchanges
- Goodwill– One can easily verify exchange’s credibility, which builds relationship of a trust and faith.
- Finality– Once trade is executed, it’s final. No any further conflicts between the buyer and the seller.
- Price Discovery– The trade is brought up into an action in an open-market values, which gives peace to a mind.
There is no any exchange of personal information. No any digitals assets are retained alongside no information; a lso there is no any risk of loss involved.