More people nowadays are investing in bitcoins. But why? If you have heard of all the talk about the value of the digital currency and how it could replace traditional currencies, then you may have considered investing in it yourself. But just what are the benefits of trading in bitcoins? And, where can you buy or sell bitcoins?
The first benefit of bitcoins is its cashless nature. When you consider the whole paradigm that the traditional currency is based on, it’s no surprise that people are attracted to the idea of a cashless system. With the advent of the internet, the whole world can participate in the buying and selling of goods online, with the use of credit cards and electronic check systems. What better way to transact money than this, when you can simply send it over the internet? This is essentially the same transaction done with a virtual currency. You need not deal with any physical currency exchanges, which is why some people are reluctant to get into the market.
The second benefit of the use of the bitcoin network is the absence of centralised administrators. Transactions on the network are determined by the users themselves. Miners also play an important role here. They control the capacity of the network and determine how much new transactions are made. While transactions are usually small (they only account for about 0.1 % of the overall hashrate), they can grow very large when there is heavy mining activity. To prevent abuse of the power of the miners, the bitcoin protocol has a sort of balance system where blocks are generated according to a mathematical algorithm, rather than being generated by personal hands.
The third benefit is the absence of governmental or centralised taxation. As long as the protocol exists, no government will try to force people to exchange one kind of currency for another. Transactions will be free and there will be no special tax levied on them. The digital currency miner only charges transaction fees when you sell or buy a certain amount of bitcoins. This is why some people call it money, but in fact it is just a way to make transactions easy and affordable for everyone.
One more advantage that makes people start to get bitcoins is the fact that it is hard to break into the market. Transactions are protected by various layers of encryption which make hacking impossible. There is also a finite number of bitcoins, and no one can truly ‘prints’ out the whole of the existing supply. In other words, the supply will keep increasing without limit, unlike national currencies which have a history of inflation.
So how does this benefit traders? When you trade in different currencies, you often lose money in the process because the value of one currency is depreciated by the others. With the bitcoins, you don’t need to worry about this because the supply is fixed and the market price stays the same. This means that if the market price goes up, you will make a profit and if it goes down, you will lose money. This is the main reason why people who are starting to trade in the currency market started with the bitcoin, since they are able to follow the trend and profit from it.
Another advantage that you will get from the mining bitcoin approach is that you have instant access to the current market price. Unlike other trading approaches, you will not have to wait for days or weeks to get the real market price, since it is constantly updated in the bitcoin database. Transactions are very fast, as well. Once you learn how to mine bitcoins, you can complete your transactions within a matter of minutes. You will be able to set your own hours to mine, so you can always be sure that you are earning extra income even when you are not at home.
The last advantage that you will get from using the peer-to Peer methodology is called the Dark Pool. It is the most dangerous aspect of the bitcoin system, because anyone can influence the market prices by using illegal trading techniques. The Dark Pool is an illicit section of the network, where hackers and fraudsters use their access to the public ledger to influence the price of digital currency. The only way to have access to this section is by working with one of the many companies that work with companies that provide services that allow them to participate in the Dark Pool. This allows them to buy and sell digital currency at higher prices than the rest of the market, while you earn a profit from the profit of these hackers.