Buy and Sell Bitcoin at a Bitcoin Exchange
Whether you’re using coins to purchase or sell products and services, investing, increasing your portfolio, or more, cryptocurrencies is the cutting edge way to do it. If you want to grow a currency or invest in newer altcoins as early as you can, once again, crypto is the way to go. You will have to go through a cryptocurrency exchange first, no matter what your end goal is.
If you want to invest in Bitcoin, you need to register for and begin to use an online exchange that specializes in this cryptocurrency. Learning the types of exchanges and how to use them should be a priority for any investor-to-be.
What is a Bitcoin Exchange?
Coins like bitcoin exist only on a software platform known as a blockchain. Because of this, there are two ways to get bitcoins: first, you can be paid in bitcoin for a product or service you provided someone, or, second, you can buy from an exchange.
Online exchanges exist to provide for and allow the conversion of one currency to another. So, in this case, you can convert fiat currency (dollars, euros, etc.) to bitcoin. The online exchange carries this conversion. It can also work vice-versa.
Where are my bitcoins stored?
After registering with an exchange and enduring their verification process, you will notice that you receive an online wallet immediately. This wallet has a public address, similar to any other wallet on any other software. This device lets you send and receive bitcoins to and from other desktops, mobile, or other types of wallets.
Transaction fees in the exchange
As with all businesses, currency exchanges need to profit. Their profit comes from a transaction fee. There are multiple types of fees and structures of fees, but the common fees are:
Fixed. Exchanges may charge a fixed fee for each transaction. So, when you’re converting to crypto from fiat or vice versa, the exchange could charge $5.00 as a transaction fee, which means that you would receive $95 in bitcoin. This is not as common as the percentage fee, our next category.
Percentage. The percentage fee is charged by most exchanges. It is similar to the fixed fee in how it works, except this fee varies depending on your transaction size. For example, if the exchange charged 2.5% per transaction, you would pay $2.50 for $100 of bitcoin, which would leave $97.50.
Spread. This is more commonly utilized in trading platforms. Spread is the variance in cost between the purchase and sale of a currency. So, for example, an exchange may sell bitcoin at $4,100 but buy the cryptocurrency at $4,105. The $5/bitcoin is known as the spread, and this spread is how the exchange profits.
Percentage and fixed fees often are used together in tiers. So, an exchange may charge 3% per transaction with a minimum amount of $0.50. Or, the exchange could charge $6 for transactions up to $120, 2.5% for transactions up to $10,000, and 1.5% for transactions above that $10,000 threshold. It is very important to look over and read through the exchange’s transaction fee plan to ensure you aren’t losing money long-term.
How To Choose The Best Bitcoin Exchange?
What should you consider when choosing a Bitcoin exchange?
When working with Bitcoin, you should select a reputable, safe, and transparent exchange. However, many people don’t know what to look for when deciding which exchange to choose.
Geographical location, transparency, and price
Think about the location of the exchange, as this can be a critical factor when it comes to simplicity and convenience, as well as the currency in which you are trading bitcoin. Also, think about the price, as not every exchange gives its clients fair market prices for buying and selling bitcoin. Transparency and fairness are two incredibly important qualities.
Transaction process, anonymity, and customer service
Also, you should consider how much time it takes to process your transaction. Bitcoin sales and purchases need to be processed ASAP. The quickness of processing is an indicator of reliability. Also, anonymity, an exchange’s credibility and traceable founders, locations, and operations, customer service, and trade options available are all similarly important factors.
Here at TopBrokers.Trade, we take pride in providing the best possible cryptocurrency and Bitcoin exchange comparison, reviews and ratings. These reviews enable you to select the best trading platform for your needs. We don’t just help you to pick a great place to trade, but also do everything that we can, to show you how to get started. For more information on investing in cryptocurrency, please see our tutorial: The Basics of Cryptocurrency.