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When used for the first time, the Bitcoin client also creates an electronic wallet. The wallet, which is used to store one’s own user credit. The wallet is initially now password-protected. If you decide to encrypt using a password (which is advisable), it is advisable to choose a strong, long password, write it down and keep it in a safe place.
If you want to use the Bitcoin client to trade BTC, you should know that the software copies the entire blockchain information to the local computer. This can take a lot of time during the first installation – it is a data volume.
It is pointed out here that the specially -called “local” wallet, i.e. the digital wallet on your own computer, is much more secure than the digital wallet at a provider – these are always the target of hacker attacks. If you opt for a virtual wallet, you should place great emphasis on strong passwords and 2-step verification to protect your Bitcoin capital.
Trade Bitcoin on a crypto exchange
Another way to trade Bitcoin is on one of the suitable online exchange. One can also use bitcoin circuit. The registration for such a stock exchange is usually multi-stage, comparable to the registration for online banking. In first step you have to enter your email id and mobile phone number. After validation with a code, you are there and have set up an account that can now be topped up by depositing currency. This means that all means are available to purchase and trade Bitcoin. However, the amount of daily purchases is tied to the verification level. Only users who have verified themselves to the highest level, including a VideoIdent procedure, can use all functions of the crypto exchanges for trading with large sums and also for using a credit card.
The advantage of digital exchanges is that registered users can enter their preferences for intended transactions, such as minimum or maximum prices. The stock exchange does the rest. If a suitable offer is available, the transaction is carried out without the user having to look every time.
In so-called marketplaces it is basically the same. Here, too, supply and demand are compared. Unlike a stock exchange, investors have to enter the desired parameters themselves. The marketplace then provides a list of the relevant bids or requests, which can also be viewed in detail. Here purchaser and vendor have the chance to get in touch with each other in a straight line and, if necessary, coordinate details of the transaction. However, you have to search for suitable partners yourself, unlike on the stock exchanges, matching does not take place automatically.
Marketplaces usually require a bank account to be used to cover the transactions carried out. The location of the house bank for buyers and sellers has a significant influence on how quickly a transaction can be completed – ideal here if both banks are located in the same country.
Trade Bitcoin predictions
These products are bets on the future course of the course, both rising and falling. If another trader gets involved in the bet, the deal is closed. The subsequent price development of Bitcoin determines the expected profit here. Good profits can be made with forecasts, but here, too, with risk of loss. The special thing about the forecasts – there must always be a trader who accepts the forecast, i.e. the bet. Forecasts with relatively low risks are not particularly attractive for the creator and therefore often find no buyers.
As now described, there are various ways to trade Bitcoin – partly through the direct possession of the digital currency and partly through speculating on the development of the course. The profits differ significantly. High-risk products in particular, such as contracts for differences, can generate high profits, but should be handled with caution. Above all, the so-called leverage, i.e. the multiplication of the original investment value for CFDs, can lead to investors multiplying their losses in the event of damage. Therefore, incoming information and with all due caution is advisable in any case when trading Bitcoin. Especially beginners should start trading Bitcoin with small amounts and diversified investments at best.
