Technology is progressing by leaps and bounds. It is introducing new terms and systems for business and communications on a daily basis. Internet has made a large contribution in this advancement; especially when it comes to the field of business. Online trading or online currency trade has recently attracted many traders. One of the common forms on online trading is Bitcoin Exchange.
What is Bitcoin?
Bitcoin exchange is a new system of money for the internet that works on the concept of digital currency. It initializes the peer to peer payment system for individuals having no central authority. A new concept of crypto currency is used that was initially introduced in 1998. Cryptography controls the creation and transactions of digital money. Bitcoin works through a software system and does not have any central controlling authority so it is typically managed and controlled by its users around the globe.
Working of Bitcoin Exchange
One can work with Bitcoin exchange just like it works with any other kind of currency exchange. Just like working with banks, it is easy to make transactions through Bitcoin Exchange. Analogous to physical trade, the user has to pay to purchase Bitcoins. The difference is that the person has to open an account with some Bitcoin Exchanger. The paid asset of the user will be available in the form of digital currency that can be used to purchase any kind of product. Bitcoins can be exchanged with other bitcoin holders too. This system works similar to the money exchanges in the banks.
Almost in all payment systems, the payments can be reversed after making a transaction through PayPal or credit cards. But with Bitcoin, the situation is changed, as after making a transaction, one can not get it back or reverse it. So be careful while changing your bitcoins with currency mediums because you may face chargeback issues. It is preferred to make exchanges with other bitcoin holders near to you.
Benefits of Bitcoin Exchange
Bitcoin currency exchange is quite new. It's a sort of software base payment system where you make transactions digitally. Here is how it can benefit you:
· Make transactions quicker than other systems
· Always available for transactions
· Make transactions from anywhere in the world
· Make safer transactions
· Perform transactions without interference of any third party
· Monitor all transactions from home PC or from Smartphone
· Purchase any kind of asset using bitcoin
Drawbacks of Bitcoin
Bitcoin exchange is an innovation in economic systems of the world. When practically used, some drawbacks come forward too. Some of them are as follows:
Ø Acceptance in market
The number of bitcoin users is growing but still it is not a widely used currency or exchange system. Its level of acceptance in financial matters is still low.
As Bitcoin is not commonly used, it is not a stable currency. However, there is a hope that this instability will reduce as the user list and amount of bitcoins in the market become more used.
Ø Partial development
A big problem is that the Bitcoin software is still in its beta phase and there are a number of imperfect features, which still need to be fixed. New modules are under process of development to make bitcoin exchange safer for all.