Lesson 9: Bitcoin Exchanges

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7 years ago
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#bitcoin

In this lesson you will learn:

  • The importance of Bitcoin (BTC) exchanges and finding the one that works best for you.
  • There is an initial ID verification which can take few days but after that you can usually buy or sell Bitcoins (BTC).
  • You can determine how secure an exchange is by checking for things like SSL encryption, and two factor authentication.

About Bitcoin Exchanges

Majority of Bitcoins are traded through online exchanges. You need to know how to buy Bitcoins as first step in getting started with digital currency. The most important initial step is to choose which exchange is for you. You need to trust the exchange with your money. This is an important journey. There are suggestions to help you decide what works for you. Every person circumstances are different based on the exchange and the market. Do your homework before selecting an exchange.

Choosing a Bitcoin Exchange

Know where your Bitcoin exchange is based is very important. This is because what is considered legal practice in your own country may not be the same in another country. Some exchanges accept multiple currencies. Check the fine prints carefully. Check the terms of service. You can usually transfer fiat money into an exchange with wire transfer, credit card, PayPal of other payment method. Consider your privacy regarding credit card usage as least private way to transfer money. Check the exchange fees to see if they are reasonable compared to rest of exchanges on the market. The fees change overtime and between exchanges. Some exchanges charge additional feed on top of the Bitcoin network transaction feed. Consider different payment methods fees. For example, credit card purchases may charge a fee of 3-10%. Credit cards are not private. Most bank transfers are free at exchanges, however some banks charge hefty fees to transfer money abroad. Check the fees of each exchange you considering. Compare a local bitcoin exchange price to a bitcoin price index to get the best rate. If an exchange constantly has substantially different pricing than other exchanges, this could be a sign of trouble and should probably be avoided. Do your due diligence. Also if you are comfortable keeping your own Wallet for long term, use your own Wallet instead of an exchange. If you don't plan on spending your coins for long periods of time move your coins into a paper wallet to have the complete control of your money.

Security and Anonymity

Initial ID verification can take a couple of days but after than usually purchases are instant if you have funds available in the exchange. Research the verification methods and delivery speeds. Check of the exchange offers "locked in" pricing options. This means the price you buy at is the price you will be charged even if the Bitcoins take few days to arrive. Many exchanges follow Know Your Customer (KYC) and Anti-Money Laundering (AML) las in their specific jurisdictions. Therefore, some identity information will have to be send to them to activate your accounts and unlock purchase limits. Exchanges are required by law that accept credit cards or bank transfers to collect users identities. Staying completely anonymous is difficult. If you want total anonymity, then buy bitcoins in cash locally from someone else through a person-to-person marketplace like LocalBitcoins. Make sure all your information with the exchange is encrypted. Check that the URL uses HTTPS address. This ensures that the information transmitted is encrypted from eavesdropping. Don't use public wifi places. Look for the padlock symbol next to the URL or bottom of the browser window. Also enable two-factor authentication (2FA) on exchanges that offers it. This means you will be required to enter a short code at log in delivered to email or SMS or a mobile app. Enabling 2FA provided a second layer of verification that requires access to your money. Do not keep your Bitcoins on public exchanges. Keep your coins stored in your personal own wallet(s). This is to protect from hackers or shutdowns. Your private keys are your keys to your funds. Bitcoin is about keeping the control in your own hands not third party middlemen. Before deciding to put your money in an exchange do an online search of the company or the service in question and read customer feedback and experience regarding service and support.

here is a place to start looking for exchanges https://www.bitcoin.com/buy-bitcoin?utm_source=Bitcoin.com+Subscribers&utm_campaign=1338448329-AUTOMATION__BTC101_Day_9&utm_medium=email&utm_term=0_ea978414cb-1338448329-216387693&goal=0_ea978414cb-1338448329-216387693&mc_cid=1338448329&mc_eid=1d260a356d

I hope you found this information helpful

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