Bitcoin exchanges work in a similar way to banks. A first amount deposits the amount of money into exchange-backed currencies, uses the balances in its stock exchange account to trade with other stock exchange users, and then withdraws the money. Unlike over-the-counter transactions, there is no risk of losing money because of people who do not fulfill part of their transaction, as long as the transaction itself does not involve fraud or lack of money.
The exchange is done by placing buy or sell orders, which the exchange system software matches. Buy orders or offers to buy bitcoins in exchange for other currencies at the maximum price per bitcoin set by the bidder. Sales orders are suggestions for selling bitcoins at the lowest price per bitcoin. If the bid price is higher than the selling order price, an exchange can be made or the bid order, sales order, or both can be removed from the order book. So, at any given time, there is a higher price than there is no longer a purchase order, and there is a slightly higher price that there is no more than that number of sales orders.
Communication with Bitcoin exchanges is usually done using a standard web browser, via secure SSL connection.
Soft currencies and repayments
Bitcoin exchanges for other forms of currency raise some issues related to repayment fraud. In particular, payment methods such as credit cards and PayPal can be refunded up to 90 days after the transaction. Instead, Bitcoin is a hard currency, and when you spend it on Bitcoin, you can’t pull it back. So, when you trade Bitcoin with a soft currency such as paypal or credit card, you risk putting yourself back on the bill after sending Bitcoin. The buyer may start the refund by claiming that he has not received the goods, or if the stolen account has been used, the real account owner will start the process when he notices the charge he did not make.
Exchange rates and market forces
Early in Bitcoin’s life, the currency showed fundamental fluctuations in the value of the currency, from $ 50 to $ 266. Bitcoin’s exchange rate has shown relatively stable growth since the beginning of 2013.
Bitcoin has been criticized by economists because of the bubble around it, similar to the housing market in the United States before the crash, and it is true that bitcoin has shown a tendency to rise rapidly and fall in price. However, given the volatility of the global economy, Bitcoin has proven to be a reliable investment compared to many other popular currencies. In particular, the European debt crisis has turned a large amount of currency into bitcoin to avoid the devaluation of the euro. These investments, in turn, have increased the value of bitcoin thanks to its unique production method.
Despite the growing popularity of Bitcoin transactions and overall price increases, several events have shown the inability to withstand major blows to its credibility. The FBI’s seizure of about 26,000 bitcoins from the Silk Road drug distribution website is more than half the value of individual bitcoins. Technical errors have also proven to be difficult for brokers based on the value of BTC exchange. In April 2013, trading volume trading volume was blocked. The Gox website dropped from $ 266 to $ 77.
While over the past two years buying and selling bitcoins with the influx of exchanges
Bitcoin has become easier around the world, but access to currency has been one of the biggest sources of change in its exchange rate. Due to the repeal of government regulations, including the most prominent in the United States, it has been a challenge to convert your local currency to Bitcoin, which has led to very variable geographic prices, which are designed for a currency that is designed without borders. Has been proven. Given that many Bitcoin users treat their bitcoins as an asset. This means that they plan to keep BTC on their BTC until they decide to convert it back to their local currency, instead of spending it online for anonymous transactions.