What is a Bitcoin Exchange?

What is a Bitcoin Exchange?
A Bitcoin Exchange or Digital Currency Exchange is a business that allows customers to trade digital currencies for other assets such as conventional fiat money or other digital currencies. Different bitcoin exchanges around the world are what sets the price of Bitcoin.

Types of Bitcoin Exchanges

Since bitcoin and cryptocurrencies are all completely digital there are a number of different types of bitcoin exchanges and many different ways to buy and sell bitcoin. Some exchanges are for buying bitcoin with cash while others are for buying with an ACH transfer directly from your bank account and others are exclusively for trading digital currencies similar to a forex market.

If you want some bitcoin to experiment with or to save for years down the road, you are likely going to use a bitcoin exchange that sells bitcoins directly to end users. Here are the most popular exchanges for getting bitcoins both for personal use or for speculation purposes. Some of these are for buying directly, while others are trading platforms for day trading bitcoin against other cryptocurrencies.

Coinbase

Based in San Francisco, California, Coinbase is the oldest and largest bitcoin exchange in the United States for business to consumer bitcoin sales. To purchase bitcoin from Coinbase, you will need to initiate an ACH transfer directly from your bank account. Coinbase charges a premium of 1% for both buy and sell orders.

ShapeShift

Based in Switzerland, ShapeShift is exclusively for trading bitcoin and other cryptocurrencies with other active users around the world. What I like (and probably most other users) the most about shapeshift is their focus on user privacy. No accounts or logins are required to trade on shapeshift. All you need is since these transactions are “on chain” you will need to pay a transaction fee for each transaction.

In my personal opinion, ShapeShift is probably the best cryptocurrency exchange in the world.

Bitcoin “ATMs” or BTMs

Bitcoin ATMs or “Bitcoin Teller Machines” are one of the easiest and quickest ways to purchase bitcoin with cash. I think that most of these terminals are one way terminals for buying bitcoin only but some of them are two-way machines so you can both buy and sell bitcoin. Bitcoin ATMs are incredibly convenient because of their speed but they often charge high fees. Premiums of 10-20% over spot price are very common. If you would like to buy some bitcoin using a BTM, you can use Coin ATM Radar to locate the nearest bitcoin ATM.

Local Bitcoins

Local Bitcoins is one of the oldest and most trusted place to buy and sell bitcoins. LBTC is a peer-to-peer marketplace for exchanging bitcoins with other bitcoin users. Payment mechanisms range from bank wire transfers to face to face meetings with cash payments. When large trading platforms go down or are shut down by governments, users usually resort to trading here on local bitcoins. Be careful on here since there are lots of scams and fraud.

Wall of Coins

Based in Sarasota, Florida, Wall of Coins is a great way to both buy and sell bitcoin with cash deposits into the bank accounts. The process usually takes about 30 minutes from when you start the trade to when you have your bitcoins but the premiums on here can get pretty steep. You can expect to pay about 20%+ over spot price for the convenience and privacy.

Paxful

Paxful is on of tne of the most prominent bitcoin exchanges in the world for selling at a premium and allowing the largest number of payment mechanisms, Paxful is a the premiums on here are the highest I have ever seen ranging from 20%+ to well over 100%. There are a lot of scammers and fraud on here so be careful when buying or selling from users without a lot of good ratings/reviews.

Bitcoin Trading Platforms

Not all bitcoin exchanges are for buying bitcoins to hold yourself. Some bitcoin exchanges are strictly for speculating on the price of bitcoin and other cryptocurrencies to make a profit. These sorts of trading platforms are almost always custodial (they control your bitcoins) and usually have much lower premiums than the consumer exchanges listed above. These fees are usually around .1% to .25% for each trade that you make. Let’s take a look at some of these exchanges around the world.

Poloniex

Based in Deleware, Poloniex has more currency pairs than any other custodial exchange in the world.

BitTrex

Based in Seattle Washington, BitTrex is one of the largest trading platforms in the US.

Kracken

Based in San Francisco, California, Kracken is a trading platform with roughly 30 different currency pairs. You can trade bitcoin against USD as well as a number of different cryptocurrency combinations.

BitFinex

BitFinex has the largest bitcoin volume of trades against the US Dollar so it is often the most trustworthy place to get the price of bitcoin from since it is the most stable on this exchange. Here on BitFinex, you can trade bitcoin against a few other cryptocurrencies and also USD.

Conclusion

That pretty much sums up all of the different types of bitcoin exchanges around the world. With all of these different ways to buy and sell bitcoin, there is no shortage of ways to turn a profit in the bitcoins space or just to hodl some of your own coins for years in the future. No matter what you plan on doing in the bitcoin space, there are a multitude of services there to help spread bitcoin across the globe.

What is a bitcoin term that you would like us to further define for you? Let us know with a comment below or tweet at @WhatIsBitcoin.

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Is Bitcoin The Reserve Currency of The Internet?

Bitcoin is the reserve currency of the internet

The internet is a global economy that transcends nation states and political borders. PayPal, Square and other FinTech companies have enabled entrepreneurs around the world to transact business electronically but these services along with all other payment networks are centrally operated and subject to countless laws across a multitude of jurisdictions. What the internet needs is its own payment network and currency that isn’t subject to the same set of rules as traditional payments. Could bitcoin rise to the challenge as the reserve currency of the internet?

Decentralization and the Internet

When the internet started gaining mainstream adoption, it challenged a number of legacy industries that had enjoyed monopolies for decades and even centuries. Among the first industries to be devastated by the internet were media based services like music, movies and publishing. Record labels were one of the first to take a hit when file sharing services like Napster stepped onto the scene. Newspaper readership plummeted as blogging and independent news sites began popping up. TV shows lost countless viewers as more and more people began watching shows made by independent creators on YouTube.

Now the internet is disrupting resources in the real world. The shared economy is turning industries like hotels, taxi cabs and parking lots upside down and it is only a matter of time before robots disrupt the employment of human labor on a large scale. But what about money and banking? How have these industries been affected by the internet?

The Reserve Currency of the Internet

In 2009, the world of money and banking changed forever when the internet finally got its own currency. A currency that is not controlled by the ruling elites or monopolies but rather a system that is controlled for and by the people. Just like media moguls lost control over the flow of information, banks have lost their monopoly over people’s means of exchange. The world has entered a new era where the production and control of money is shifting to the hands of the market and not just the ruling class. The internet has given the world bitcoin and bitcoin is the reserve currency of the internet.

Use Bitcoin

Using bitcoin transfers power from multinational financial institutions to individuals like you and me and the banks know this. The internet has supplanted the reign of media moguls and now it’s time for the banks to endure the same fate. Join the new global internet economy and replace your currency with bitcoin, the reserve currency of the internet.

Take Action

We are doing whatever we can to increase bitcoin awareness and educate new users and we need all the help we can get. If you feel that this post would benefit others, please share it. Furthermore, if you feel like educating people about bitcoin out in the real world, start the discussion with one of our bitcoin shirts.

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How do you see bitcoin disrupting reserve currencies around the world? Let us know with a comment below or a tweet at @BitcoinReasons

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What is Money?

Reason to Use Bitcoin 8: Money is one of society's most remarkable yet poorly understood inventions

What is money? Lots of people have confidently told me that “money is the root of all evil” yet when I ask them what money is, they can’t seem to come up with an answer. Why is it that so many people seem to think that money is innately evil? Why doesn’t anyone understand what money is or how it works? Money is one of society’s most remarkable yet poorly understood inventions and without it we could not enjoy the pleasures of living in a modern society. In order to better understand what money is, I would like to ask you a question. If money is the root of all evil, then what is the root of all money?

What is money? Is it these pieces of paper that we use to buy things? or is it something more than that?

Money is a Tool

Money is a piece of technology that we use to weigh and measure goods and services against each other. In short, money is a tool for exchange and organization. Without money, we simply could not organize and solve problems of large scale. Unfortunately, too many people view money as the end rather than the means which is one of the reasons money gets a bad reputation.

Ok, so we know that money is a tool but what does this tool do and what allows it to work?

Money is anything that does three things. Money is a store of value, a medium of exchange and a unit of account. Anything that performs these three functions is, by definition, money. This means that no matter what you use to do these three things, you are using money.

Money is a Store of Value

Money needs to be storable. One of the first forms of money was salt because everyone wanted it to season their food. Once it was so widely desired, people who had salt would use some for seasoning their food and they would store the rest so they could trade it with others. In this sense, salt was a store of value. One of bitcoin’s primary functions is as a safe haven asset to store value.

Money is a Medium of Exchange

Money needs to be exchangeable with other parties. After salt became sought after by everyone in a society, it was easy to trade with others for goods and services. Bitcoin is not yet accepted directly by most as a means of exchange but many payment processors are enabling it to be used as one. Some platforms exclusively use bitcoin as the payment mechanism because they understand its utility as a means of exchange.

Money is a Unit of Account

Money needs to be used as a unit of account. Since everyone was using salt to store value and exchanging it with other people in their society, salt could also be used as a unit of account. In ancient markets, simple scales were used to account for different amounts of salt. Trading things measured out in salt was what would allow for people to account for certain things. Trade can easily be accounted for using Bitcoin since each bitcoin can seamlessly be divided into 100 million units.

In order for money to be able to successfully do these three things, it needs to have 6 characteristics; durability, portability, divisibility, uniformity, scarcity and acceptability. The more of these qualities that something has, the better that something functions as money. Salt does not possess these qualities (durability & scarcity) and so it was gradually replaced by better forms of money like gold. Bitcoin possesses all of these characteristics to an even greater extent than gold.

Bitcoin is a Far Greater Tool Than Money

The first application that brought the internet into mainstream use was the invention of e.mail. For the first time in history, people could send mail to each other electronically and this was groundbreaking technology at the time. But as we all know, the value of the internet is so much more than email.

Bitcoin is no different. Its first application is being recognized as a form of money but it will not be long before people around the world realize that it is capable of doing so much more than just buying things. Bitcoin is a distributed network that can send, receive and store information and it does this better, faster and with a lower cost than any existing system. Since modern money has become information, this has immense implications for the future of trade, all forms of record keeping and information exchange.

Bitcoin Is Competitive Money

When you go to the store, you have all sorts of choices on what products you can buy. You can decide what type of car to drive, or what dry cleaner to use and what cell service provider will drop your calls but what about money? Do we have the freedom to chose what money we use? The short answer is no, we don’t.

So I would like to bring this back to my original question, What is the root of all money?

Up until the invention of bitcoin, the control of all money supplies has been in the hands of a small group of elites and central bankers but now that bitcoin and cryptocurrencies are here, that control is shifting from central banks to the people.

Take Action

We are doing whatever we can to increase bitcoin awareness and educate new users and we need all the help we can get. If you feel that this post would benefit others, please share it. Furthermore, if you feel like educating people about bitcoin out in the real world, start the discussion with one of our bitcoin shirts.

Reason to use Bitcoin 8 t-shirt

What do you think is at the root of all money? Let us know with a comment below or a tweet at @BitcoinReasons

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Cybercrime is Evolving Faster Than Your Bank’s Security

Reason to use Bitcoin 12: Cybercrime is evolving faster than your bank's security

In our hyper connected tech world we have probably all heard a number of buzzwords that are related to cybercrime. Identity theft, ransomware, hacks, leaks, fraud, viruses, phishing, forgery, malware and spam are all terms that we either hear on the news or the latest primetime tv drama and that is because cybercrime is evolving at an alarming rate.

What is Cybercrime?

Cybercrime refers to criminal activities carried out by means of computers or the internet and it is one of the fastest growing black markets in the world. Cybercriminals work in illicit parts of the internet with incredibly high risk and even higher profit margins. In order to stay one step (or several steps) ahead of law enforcement, hackers are always evolving and advancing to use the most cutting edge technology available.

Bank Security

One of the biggest security weaknesses with the banking system is that banks are legally required to collect all sorts of your personal information in order for you to store value or use their network. These privacy invasive regulations are commonly known as Know Your Customer laws or KYC for short. These laws create an abnormally large collection of personal data for hackers and cybercriminals to target by forcing your personal identity to be attached to all of your electronic spending. The end result is the erosion of financial privacy and the creation of large caches of your personal data ripe for exploitation by dark markets.

Cache for Cash

The larger these collections of personal data caches become, the greater incentive for a group of hackers to target them. These data caches can be at banks or on social media accounts. According to the Wall Street Journal a recent hack of Home Depot resulted in 53 million email accounts being compromised. With these e.mail hackers can launch phishing scams and spam attacks that can deliver malware.

Once this malware installs itself on your computer, it searches for personal info such as names, addresses, phone numbers, bank accounts, passwords, medical records, social security numbers and anything else that can be used to hijack your identity both on and offline. Once your data is mined, hackers can do all sorts of things with it like opening up bank accounts or lines of credit in your name such as personal loans, credit cards, claim your tax returns, obtain medical care like prescription drugs just to name a few.

This is not just a threat when you spend money on the internet but every time that you swipe your credit or debit card you are transmitting lots of your personal data. So imagine that every single time that you have ever used your credit card…ever. Now imagine that malicious actors gained access to that data. How could your life be damaged?

Use Bitcoin

It is much harder for identity theft to destroy your credit when your identity is not attached to your money. This is why the world needs a payment network that doesn’t require any of your personal information in order to send, receive or store value. Bitcoin is just the solution for such a problem. It provides the user with increased privacy while reducing your risk of falling victim to cybercrime and we are just beginning to learn of the benefits of using bitcoin.

Take Action

We are doing whatever we can to increase bitcoin awareness and educate new users and we need all the help we can get. If you feel that this post would benefit others, please share it. Furthermore, if you feel like educating people about bitcoin out in the real world, start the discussion with one of our bitcoin shirts.

Reason to Use Bitcoin 12 t shirt

How do you think bitcoin will help to prevent cybercrime? Let us know with a comment below or a tweet at @BitcoinReasons

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