What is a BTC Exchange?

What is a BTC Exchange?

Now that you’ve started learning about the Bitcoin world, you might have come across the term BTC Exchange. You might even be thinking of buying some in the future. This guide should give you enough information and make sure you’re safe in the bitcoin world.

It’s pretty straightforward; BTC stands for Bitcoin and a BTC exchange lets you exchange bitcoins online against most of the real-world currencies from the comfort of your bed.

Bitcoins are pretty lucrative for people who wanna make a quick buck today and so there’s literally tons of scam exchanges on the internet.

If you want to learn the basics of the exchange world, keep reading!

How does it work?

A BTC Exchange is pretty much an eBay for bitcoins. You can sign up, and look for good offers from legitimate sellers, then buy or sell bitcoins. Sellers put in a minimum price that they need to sell their bitcoins at, and the buyers put in a maximum price for the bitcoins they want to buy. The platform then connects both these people, given that their minimum and maximum prices agree, the exchange can be done with the help of the exchange. Since the price of bitcoins varies a lot, it’s pretty unlikely that you buy bitcoins at the exact price that you wanted to.

Usually, exchanges provide services such as escrow accounts and conflict resolution programs. Escrow accounts are basically company accounts which hold the money during the transaction and is given to the seller when the buyer has received his bitcoins. It helps prevent most bitcoin scams and gives security to both the buyer and the seller.

But you need to be careful and make sure that the people you buy them from are legitimate sellers.

Do I need a wallet with my BTC exchange?

In order to store money safely, you would deposit it in a bank. It’s pretty much the same for Bitcoin; in order to keep your bitcoins safe, you need a reliable bitcoin wallet. A bitcoin wallet is a software that can be stored on your computer or on a USB-drive. The software stores your private key and provides better security whilst carrying out transactions on the internet. A private key is like a password that you keep for yourself.

Each bitcoin is different from another, because they differ by their private key. You could write it down on plain paper, but a software wallet is useful because you can make online payments faster. The wallet is pretty much the only way for you to receive the bitcoin over the internet if you buy it from an exchange. (You could buy physical bitcoins, but we don’t recommend that at all)

The wallet’s most interesting feature, however, is how it secures your bitcoins. You can put a set of password on a wallet, there are even wallets that let you access them by analysing your heart rhythms.

That’s the principle behind wallets. Here’s some good ones.

Can I sell the bitcoins if I don’t need them after while?

Of course, selling bitcoins is pretty easy. All you need to do, is set up a seller account on an exchange that uses good escrow services, so that you can be a new seller and sell it quickly at a good price. Setting the account takes just a small procedure, connecting your bank credentials to the account. Some websites don’t have this process, they only put the seller and the buyer in touch. Be careful when trying to sell on those websites, you can’t ever be sure of your sale. Here’s some good exchanges that have generally good track records.

How can I know if a BTC exchange is safe?

If you buy your bitcoins from a trusted exchange, they will most likely ask you to install a 2 factor authentication. That’s basically a text message that gets sent to your mobile phone. You type the code into the transaction in order to verify that it’s you. The odds of being prone to credit card theft online are greatly reduced and help secure your bitcoins online.

When you’re on a BTC exchange, you need to be careful. Always check the ratings of the sellers that you buy from. Most exchanges have ratings for each seller and the number of transactions. That can help you to make sure you are buying from verified sellers who aren’t scammers. Take a look at the ratings and the comments that a seller receives. You can tell if the seller is also a selective scammer, which means he completes most transactions honestly but has a spotty record.

Here’s our reviews on different exchanges!

Do people really buy things with bitcoin?

Even though Bitcoin was tainted with the image of a dark internet currency, the practicality has pushed it into mainstream marketplaces. Microsoft was one of the big milestones in Bitcoins life. The company announced that people could purchase gaming equipment and in game functionalities with bitcoins. Not only that, but free tools are emerging for marketplaces that help them to accept bitcoin payments. Hopefully quite soon, the bitcoin might be a medium of exchange as well known and trusted as the USD. The great asset of bitcoin is that it isn’t owned one person, that it’s decentralized and nobody can influence it.

Bitcoin is owned, and controlled by the people.

Hopefully in a few years, you might see it become a great online currency for payments.

What’s the best site to buy bitcoins?

As you might have seen, we can’t stop saying how careful people have to be whilst trying to buy bitcoins online. There’s many reliable websites that you can find, but here’s some that the WikiCrypto team believes are best.

LocalBitcoins is one of the oldest exchanges on the market today, and undoubtedly one of the best in terms of the services that it provides. The website is essentially a marketplace for currency sellers and buyers to communicate. You can find them online and purchase your bitcoins. But this service isn’t just for purchases of bitcoin online, you can find sellers near you. One you’ve found a local seller, you meet them in a public area you can pay in cash for bitcoins. This helps people remain anonymous if anonymity and privacy is important to them.

Another great BTC exchange is the CEX.IO platform.

To be honest, I was surprised with the level of security that CEX.IO offers, it’s by far the best in terms of safety. The website is quite intuitive and has an easy to use interface. It offers high deposit limits for free accounts, which is great for beginner traders or bitcoin novices. The FOK orders tool that CEX.IO uses ensures that you can buy and sell your bitcoins at any time.

Here’s a comparison chart which can give you an idea of the different options available in the market today.

You’re good to go!

Hopefully this guide has been interesting and informative for the beginners who are now exploring the world of bitcoin. Since most of bitcoin trading happens over the internet, you always hear about scams. Equipped with this information, you can be confident in your ability to avoid scam websites or platforms!

If you’re interested in trading Bitcoin, check out our guide right here!

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About Article Author

Michael Serrano
Michael Serrano

Michael is an engineer and a bitcoin evangelist. He has been involved in cryptocurrencies since 2013. His biggest wish? 1 billion users of bitcoin, ether and litecoin by 2020. In the last 10 years he has worked for various early-stage start-up as a back-end developer.

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